Proximar Seafood, a Norwegian company constructing the first commercial Atlantic salmon farm in Japan, is seeking an additional NOK 165 million (€13.9 million/$14.8 million) to cover increased capital, operational, and financing expenses. The project has experienced a 17% hike in total capital since its inception over two and a half years ago, with current expenditures reaching NOK 1.24 billion (€104.2 million/$111.3 million). This escalation has been driven by higher construction costs, financing charges, and capital expenditures (CAPEX).
The company aims to produce 5,300 tonnes of Atlantic salmon annually in the first phase of its operation at the Oyama facility, which is being constructed by Daiwa House. To address the financial shortfall, Proximar and its principal shareholders are exploring various financing alternatives in Norway and Japan.
The additional funding requirements breakdown as follows:
- NOK 90 million for CAPEX increases
- NOK 45 million due to inflated operating expenses, primarily from rising feed prices
- NOK 30 million for financing costs
Despite the financial challenges, Proximar reported promising biological growth that exceeded expectations in their Q3 2023 progress update. The company is preparing to transfer the first batch of fish to its grow-out facility this quarter and anticipates its first harvest in Q3 2024. This progress follows drawing the final tranche of an ¥8.8 billion loan from Japanese banks while equipment installations by AquaMaof are ongoing.
The issue of rising costs is not unique to Proximar; other aquaculture ventures such as US-based AquaBounty and Gigante Salmon are also grappling with similar challenges, leading them to seek additional capital through private placements and bank loans. AquaBounty's farm costs are estimated between £395 million and £403 million.
Proximar's pursuit of additional funding reflects a broader trend in the industry where companies must adapt their financial strategies to manage escalating costs while maintaining project momentum.
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