Mowi enters partnership with Skretting
The strategic and industrial partnership means the salmon farming giant will produce feed based on Skretting's formulation, but retains its feed mills.
In March, Mowi initiated a strategic review of the company's integrated feed division to look at the best possible organisation of the unit. This process is now complete, and Mowi has chosen to enter into a strategic and industrial partnership with aquafeed manufacturer Skretting, owned by Dutch feed company Nutreco. Mowi's integrated feed division continues as is and will continue to produce feed at the company's two factories in Bjugn, Norway, and Kyleakin, Skye, Scotland, based on Skretting's feed formulation, procurement, and logistics. Skretting has a 125-year history and is one of the world's leading feed manufacturers in aquaculture.
"Mowi and Skretting are a great fit, and this partnership is our preferred solution. I am confident that this partnership with Skretting and Nutreco will make Mowi an even better farmer," said Mowi chief executive Ivan Vindheim.
€55m in annual savings
Feed is one of the most important input factors in Atlantic salmon farming and accounts for approximately 40% of production costs. Mowi expects the partnership with Skretting/Nutreco to lead to more than €55 million (£48m) in net annual cost savings through improved feed formulation, purchasing and logistics. At the same time, Mowi's integrated feed division will continue as before and is estimated to contribute €70m to the group's gross operating profit in 2026. Together, this amounts to €125m in total contribution, which corresponds to earnings of €0.14 per share. In EBIT/kg, this amounts to €0.18 for the group and €0.22 for Mowi Norway.
"With this agreement, Mowi secures the best feed and the lowest feed costs in the industry," said Vindheim.
Skretting has been one of Mowi's feed suppliers for decades. As feed production has become increasingly complex, nutritional expertise and research and development have become even more important in recent years, and Mowi will pay a small annual fee for this. Vindheim said that joining forces with a partner who is at the forefront of expertise and innovation has been strategically important for Mowi in its assessments.
“We know the Skretting team very well and have had an excellent collaboration with them for decades. Now we are taking the collaboration to a new level and formalising how we can secure further innovation and cost improvements. This partnership model represents a secure solution for Mowi, while also ensuring cost savings from day one through improved feed formulation and optimized purchasing,” said Vindheim.
Mowi has produced its own feed since 2014 and Vindheim believes the company's integrated model in partnership with Skretting and Nutreco will give Mowi a competitive advantage going forward.
"A big advantage for Mowi with this collaboration is that we can keep our own feed division, with highly competent and skilled people and two state-of-the-art factories in Norway and Scotland. This also means that we retain the very profitable feed value chain. There is also reason to believe that the feed market will continue to tighten in the coming years, which will make this part of the value chain even more profitable," said Vindheim.
