Driving the Development in the Aquaculture Sector Innovation & Future Growth

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1 Driving the Development in the Aquaculture Sector Innovation & Future Growth IntraFish SeaFood Investor Forum, New York 23. of May

2 On the Menu Short overview BioMar Future of Aquaculture and feed role Feed evolution and future The raw material challenge Value Chain collaborations The opportunity Conclusions 2

3 BioMar at-a-glance Turnover EUR ~1.3bn EBIT EUR ~75m Sales volume ~1.2m tons Employees ~1,400 Owned since 2006 by Danish industrial conglomerate Schouw & Co. Schouw & Co. is listed on Nasdaq Copenhagen (ticker SCHO.CO) Only high performance aqua feed Feeds 1 out of 5 farmed fish in Europe/Chile Feed for +45 different species + shrimp Sale to more than 80 countries Only way to obtain exposure to fish feed is through investment in Schouw & Co. 3

4 16 production facilities mtons fish feed Truly Global Norway Production sites Scotland 2x Denmark France Costa Rica Ecuador Spain Greece Turkey China (+ 1 under construction) Australia (under construction) 4 Chile 3x 4 16 sites ~1.7 mtons capacity

5 The Future of Aquaculture

6 AQUACULTURE INDUSTRY The global fish feed industry is expected to grow ~4.5% driven by larger populations, sustainability concern and health aspiration Global fish feed industry (mtons) CAGR ~4.5% DRIVERS Population growth Sustainability concern Health aspiration

7 Slower growth of over the last 10 years Why? Environmental restrictions Access to water - more than 70 % is in fresh water Access to quality of water Limits on discharge (eutrophication) Sites in Central Europe, China (Political will) Conflicts with other interests. Disease limitations Lice in Norway, Ricketsia in Chile, White spot in Asia EMS in Shrimp Immense number of virus and bacterial diseases in Asia 7

8 Our Core Constant innovation R&D an important tool for success in product and concept development to tackle challenges for growth Improved product performance Optimal health condition for the fish Capability to include new raw materials in recipes Improved production technologies and processes Recipe optimization Development of feed for new species in aquaculture 8

9 Future Growth in Aquaculture Technology Recirculation Real off-shore 9

10 How can feed manufacturers contribute? Environmental footprint raw materials Selection of sustainable managed raw materials IFFO RS; MSC RTRS, algae based w 3, Single cell protein, etc Total environmental footprint of raw material and production Nutritional optimal balanced diets not only for fish but also for environment and systems. Digestibility; Amino acid selection => optimal growth => minimal impact on environment Optimal Phosphorous Physical optimal diets for off shore systems RAS diets fecal texture 10

11 11 The Future of Feed

12 It all starts with the feed! But, what is fish feed? What could we expect for the future??

13 Ingredient inclusion level FCR and FIFO Salmon Feed Development 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 st Revolution: Plant proteins AA optimization FIFO 2 nd Revolution: Plant oils Ω3 balance FIFO FCR 1980s ~ 1.9 FCR 1990 ~ 1.4 FCR 2017 ~ 1.15 FCR 2022 ~ rd Revolution: Single cell Ess. nutrients FIFO = Overall Feed Suppliers BioMar BioMar future? Single cell raw materials Micro ingredients Plant oil Plant dry matter PAPs Fish oil By-product RMs Krill meal FIFO (FFDR)

14 Restoring marine omega-3s responsibly Ordinary pathway Microalgae Schizochytrium sp. Aquaculture Zooplankton Fish Fishing vessel Fish oil Alternative pathway Sugarcane fermentation Natural algal oil & meal 14

15 Triple S Sustainable Solution Steering 15

16 Value Chain Collaboration

17 VALUE CHAIN COLLABORATIONS Feed a key position in the value chain Aquaculture value chain Raw material Feed production Transportation Farming & harvesting Processing Retailers BIOMAR S PLACE BIOMAR S RESPONSIBILITY Transforming sustainable raw materials of marineor land-based origin into high quality fresh or processed fish products for consumers worldwide BioSustain 17

18 Evolution in product development within Salmon General MARKETING / DIFFERENTIATION / BRANDING Specialized BULK Whole salmon Headless Etc. SEMI-FINISHED Whole side Half side Chop SPECIAL. PROD. Salmon fillet Portion size Skin- & boneless SPECIAL. PROD. Processing Organic (certified feedstuff) SPECIAL. PROD. Biology Nutrition (specialized feed) Product Development BioSustain Spot market / Retail REQUIREMENTS / OWNERSHIP OF END-PRODUCT In-house INCREASE IN TRACEABILITY AND TRANSPARENCY REQUIREMENTS

19 Connecting Value Chain Insights FEED PRODUCTION FISH PRODUCTION PRODUCT CLAIMS HOT TOPICS Raw materials Compounding Converting Brands Retail CONSUMER VALUE & SATISFACTION A Fish meal Fish oil Microalgae Krill SPC Palm oil PAPs Pigments Insects Technology push Market pull Certified RMs Fish welfare High omega-3 Overfishing concerns Trimmings & biproduct RMs Farming & Lower on Deforestation issues Flesh quality FIFO < 1 Food safety/quality issues Cleaning fish oil processing contaminants Climate change concerns Palatability excellence High quality & Artificial vs. natural Performance & Location nutritional value Lack of fresh water Retention Technology Non-GMO GMO concerns Certifications Chemotherapeutics concerns Traceability and transparency Documentation: Analytics & Reporting tools > Traceability & Transparency B Rewards & Recognition

20 Some examples around the Salmon World In the Blue is a custom-made innovative feed concept using microalgae Restoring Marine omega-3s responsibly & reduces environmental contaminants in the Aquaculture Industry FIFO ratio below 1 to 1 Rated Good Alternative by Monterey Bay Aquarium Seafood watch program. Lochmuir specification developed in 2004, first supply in 2006 Differentiated offering is supporting M&S point of difference Sold in excess of T Salmon since launch Feed regime designed for processor and consumer eating experience Independently verified Sustainable Feed Raw Materials constantly evolving Silverside produced by Ventisqueros with sales and distribution by BluGlacier USA Stable, year round supply extending the wild Coho season Great colour FFDR 0.5 FIFO

21 Conclusions Fish Feed going forward Feed an important factor to achieve growth potential in aquaculture Implement best practice globally, especially in non salmon world Be ready for RAS and Off-shore and requirements on feed Sustainable raw material base and transparency a must Part of the story 21

22 THANKS FOR ATTENTION!!! Let s Innovate Aquaculture 22