Report of the Board for 2005

Transcription

1 Report of the Board for 2005 Financial results For the fisheries and aquaculture trades, 2005 was a good year with profitability in most sectors. Trade political difficulties in existing markets have been balanced with newer markets in the world; a reminder that the fisheries and aquaculture trades are continually changing. With these changes, SINTEF Fisheries and Aquaculture has also achieved good results. Collaboration with the fish processing industry has led to an increased relevant competence in utilising the raw materials in their entirety, developing new trawl systems, new farming concepts and the further development of cod as a farmed species. SINTEF has also been invited to participate in a number of EU research projects. The major event in 2005, the seventh year of activity, was collecting all of the institute s activities in SINTEF s SeaLab at Brattøra by the fjord. The turnover in 2005 was 83.2 MNOK. There has been a considerable growth in fish farm technology and a small reduction in fisheries technology. The new division for international projects and consulting has had a positive first year. The divisions for processing and marine resources technology have had an activity corresponding to that of Of the total revenues, 7.5 MNOK (9 %) was channelled to activities in other parts of the SINTEF Group. The operating profit was MNOK while the total annual profit was 2.37 MNOK. The Board recommends that this be transferred to the equity. The company s free equity was 0.6 MNOK at the end of the year. The Board concludes that the financial results and supporting documentation give a correct description of the company s operation and financial situation on 31 December There is no subsequent information of importance that challenges this evaluation of the situation based on the annual financial report and associated documentation. Based on the liquidity, the Board recommends making preparations for continued operations with the submission of the financial report. The equity at the end of the year was 12.1 MNOK and comprises 29.6 % of the total capital, which the Board considers to be sufficient for the planned activities in At the beginning of 2006, the order reserves comprise about 60 % of the budgeted net income for the year. This includes support from the Norwegian Research Council in terms of a base sum of 3.8 MNOK and 10.7 MNOK for strategic institute programs. Evaluation of financial risks Projects with income in foreign currencies and expenses paid in NOK are prone to fluctuations of foreign currencies, mostly EUR. Term contracts in the relevant currency are used to relieve this risk. There is also a risk that some clients can not pay their bills. To reduce this risk, credit evaluations are employed and, in some cases, advanced payments are required. 1

2 The liquidity of SINTEF Fisheries and Aquaculture is exposed to fluctuations that, among other things, are connected to the financing connected to EU projects and the Norwegian Research Council. Systematic efforts are being made to reduce capital tie-up in outstanding claims and projects in progress. Normal operations are satisfactorily maintained with liquidity access through a concern account arrangement with SINTEF. The SINTEF Group has established a common arrangement for depositing its extensive reserves. The portfolio is invested in accordance with Rules for financial administration of May Market and competence As mentioned, 2005 was a good year for the fisheries and aquaculture trades and industries, especially for the salmon industry. At the same time, there have been significant challenges. This includes market access for Norwegian salmon, the reputation of fish farming due to escaped fish and the use of forbidden chemicals. Competition from low-cost countries that process frozen white fish has continued, but there has been an improvement in the fresh fish sector. There has been a stabilization of the consumption of pelagic fish. There appears to be an increasing optimism for investing in the farming of cod, while the rearing of shellfish is modest. In spite of the problems for the trade, SINTEF Fisheries and Aquaculture has a reasonable supply of projects within its main fields of competence. The long-term research activity comprises several strategic institute programs that are important for the fisheries and aquaculture trades and industries. One program focusing on profitability and effective processing was completed in This resulted in improved processes and products. Methods to capitalize on large savings potentials revealed in the present process industry were developed, based on both known technology and newer technological solutions. This work will continue for four more years through a new program. The company has continued the work on projects connected to the development of a futuristic and sustainable fishing fleet. This includes the development of new methods to ensure selectivity, quality and environmental protection during the catch of wild fish. The energy consumption has been in particular focus in view of fuel price increases and the possible use of natural gas. The fishing vessel as a working place has also been in focus through health, environment and safety projects. At the flume tank in Hirtshals, there has been a continuous testing of new concepts where these aspects are taken into account. The problem of farmed salmon fleeing fish cages shows that there are still several technological challenges in the trade. This may be even greater for cod farming. Through a strategic institute program, work to expand fish farming to more exposed waters was intensified in This work has aroused interest in other parts of the world where there is a desire to farm fish in open waters. To be sure that the research activity for the aquaculture trade agrees with their needs, SINTEF Fisheries and Aquaculture has emphasized a collaboration with the trade s organisations for both farmers and suppliers. The TEKMAR conference held for the third time in the fall of 2005 had 120 delegates from producers and suppliers. A successful seminar on cod was also held at Aqua Nor

3 Within the food industry, the large super market chains and consumers demand more from the suppliers, especially with traceability and authentication, not only for marine products but also for agriculture products. There has been an increased project portfolio in 2005 that also includes clients from the green sector. Research in this arena is closely tied to several EU projects. SINTEF Fisheries and Aquaculture continue to pursue a coordination of the available competence within the relevant institutions in Norway to provide an extended international activity. A strategic alliance with Akvaforsk AS was signed to combine its competence in breeding and genetics with SINTEF s competence in technology. Assistance to other nations can pave the way for a sustainable development, and open doors for Norwegian industrial developments in collaboration with local industries. In connection with a long-term engagement in Vietnam, through NORAD, the company has an agreement with the Research Institute and Aquaculture No. 1 in Hanoi. Organization and collaboration The establishment of SINTEF Fisheries and Aquaculture in 1999 collected the research activities on the use of renewable marine resources within the SINTEF Group under one strategic unit. Combining special technological competence with a good knowledge of the needs of the industry, the entire competence of the Group is coordinated to these needs. The company has offices in Trondheim, Ålesund and Hirtshals. During 2005, the activities in Trondheim were moved to the SINTEF SeaLab at Brattørakaia 17B near the fjord. Here, modern offices and laboratories have improved the working environment. SeaLab was officially inaugurated on 9 August by the Norwegian minister of Fisheries and Coastal Affairs, Svein Ludvigsen. The activities today are divided into five divisions at the SINTEF SeaLab: Marine Resources Technology Fisheries Technology (Also in Ålesund and laboratory in Hirtshals in Denmark) Aquaculture Technology Processing Technology International Projects and Consulting (Also project office in Vietnam) SINTEF Fisheries and Aquaculture has a close collaboration with the Norwegian University of Science and Technology in Trondheim (NTNU), engaging three scientific advisors and 8 to 10 graduate students in its activities. This is a prerequisite for strengthening the technological profile on a long-term basis. Throughout 2005, this profile was strengthened through the establishment of the Gemini Centre for Fisheries and Aquaculture Technology. SINTEF Fisheries and Aquaculture projects financed post doc studies at NTNU to the amount of approximately 6 MNOK 3

4 From the beginning in 1999, SINTEF Fisheries and Aquaculture has worked closely with other Norwegian research institutes. The employees, management and owners have therefore continued to be strongly involved in evaluation work initiated by the ministries of Fisheries and Coastal Affairs and Agriculture and Food to coordinate the national research (the socalled blue-green food alliance ). Management and control systems The management structure is based on Norwegian business law. SINTEF Fisheries and Aquaculture belong to the SINTEF Group and follow the corporation s instructions for management and control. The Stockholders Meeting is the highest authority and consists of the owners. There is only one class of stocks. For more details of the stockholders, refer to note 17 on capital and stockholder information. The Board has the responsibility for business plans and budgets, and deals with items of strategic and economical importance. Members of the Board are appointed and chosen by the owners and the employees. SINTEF Fisheries and Aquaculture has no agreement where a member of the Board has significant interests. The work of the Board is based on special instructions. The management system is equivalent to the ISO 9001 Standard. Internal audits are made to ensure that the activities and management meet these standards. Personnel Like other units in the SINTEF Group, SINTEF Fisheries and Aquaculture exercise a personnel policy based on the principles of gender equality. This is to ensure that employee interrelationships display care, respect and appreciation of the variety and differences between employees. It is the Board s impression that a good representation of both genders at all levels in the organisation is for the best. Of the 89 employees at the end of the year, 30 were women. Two of them are in management. Six of the seven members of the Board are men. In 2005, 8 scientists and engineers were employed in three of the divisions. Due to the termination of the Division for Coastal and Ocean Engineering and transfers to other parts of SINTEF, 8 persons have left the company. Working conditions Every other year there is conducted an assessment of the environmental, health and safety conditions of all working places. Important recommendations from the assessment in 2004 were implemented in

5 Gathering the activities in SINTEF s SeaLab during the summer of 2005 contributed to a strengthened working environment, particularly for those involved in experimental work. Sick leave in 2005 was only 1.9 % of the total work time, but there was one minor accident that led to sick leave and material damage to the water treatment system. Chemicals and other potentially dangerous wastes are stored and disposed of following accepted procedures, and there are no discharges polluting the environment. Future prospects The global demand for fish and fish products is increasing. Since the bounty of wild fish is highly taxed, the increased demand must be supplied by farmed species. FAO expects this production to double within the next 25 to 30 years and that the increase will come from marine species since most fresh and brackish water areas are already being used. In addition, there is a need to develop a balanced catch of wild fish and a total use of the biomass that is caught. Other important global objectives are to produce enough feed for the increased demand for farmed products and to maintain the quality of the fish all the way to the consumer. The strategic investments for long-term developments at SINTEF Fisheries and Aquaculture are based on the above considerations. Focus on technological developments and solutions that are needed to supply food from the sea must be intensified, which should provide useful work for several years to come. Results from project work and scientific publications have given the company international publicity, resulting in queries by several potential foreign clients who want to increase their productivity through technology development projects. Public documents in 2005, including Stortingsmelding No.19 ( ), Marine trade development, The Blue field and Stortingsmelding No. 20 ( ), Desire for research, confirm a continued priority for the marine sector in Norway. There has also been an increased funding of research connected to this sector. A new innovation program Marine added value with a total framework of 40 MNOK started this year. With the expectations that funding of marine research will increase in the years to come, the challenge is to ensure that the details of these programs acquire a more technological profile than in previous years. The Stoltenberg administration s ambitions for an integrated industrial development in the northern regions are also expected to result in new research programs that consider the exploitation of renewable marine resources. To be a coveted supplier of key technological competence in the long run, the company must have a stable financial base for funding scientific research. The company has succeeded in preserving its basic research support of 14.5 MNOK from 2005 to In view of the ongoing discussion on financing research institutes, there is reason to believe that this will increase in the years to come. In addition to the Norwegian Research Council, the EU Seventh Framework Programme and the establishment of the European Aquaculture Technology Platform should make the company more resilient to fluctuations in the national research market. At the onset of 2006 it is clear that this year will also be challenging for the industry. It is expected that SINTEF Fisheries and Aquaculture will continue its growth rate in its central areas of competence as in This can be achieved only through good contacts in the 5

6 industry and through offering them useful projects according to their needs. SINTEF SeaLab is a very important asset in this process. The company must master growth in some areas and at the same time manage to reduce its capacity in areas where the market shows a long-term decline. Throughout the last three years the company s profit margin was 3 %, on average. This surplus is not sufficient to embark upon the long-term offensive national and international role envisioned by the Board and the employees. The Board recommends therefore that the profit margin be increased in Acknowledgements The Board thanks our customers and employees, and NTNU employees that are engaged in SINTEF Fisheries and Aquaculture s activities, for a good collaboration in Trondheim, 21 February 2006 The Board of SINTEF Fisheries and Aquaculture Oddvar Aam (leader) Jan Solberg Knut W. Hansen Torbjørn Digernes Solveig Strand Arne Fredheim Dag Standal Karl A. Almås (President) 6