SEAFOODNEWS.COM [Bloomberg News] by Jonas Cho Walsgard – March 27, 2017
China is the next market to conquer for Norwegian salmon and this seafood investor.
“China is too big to ignore,” Hogne I. Tyssoy, portfolio manager of the Holberg Triton fund, said in an interview in Oslo on Tuesday. “Now when it’s opening again, Norwegian seafood has an exciting future in China.”
Trade relations between China and Norway were normalized in December, ending a six-year freeze that began after the Norwegian Nobel Committee awarded the Peace Prize to a Chinese dissident. Norway, the world’s largest Atlantic salmon producer, is seeking to increase seafood exports as the global demand for healthy proteins rises, especially in emerging markets such as China.
Tyssoy will join Prime Minister Erna Solberg’s delegation to China in April, along with other business executives and investors as Norway seeks to re-establish contact with the world’s most populous country. While the fund may consider investing in Chinese companies in future, Tyssoy is interested in seeing first hand what growth opportunities are in store for Norwegian fish farmers in China, he said.
One such example is Marine Harvest ASA’s cooperation with Alibaba Group Holding Ltd., China’s biggest e-commerce company, to sell salmon on the Internet, a collaboration that could “develop quickly,” according to the 55-year-old.
“It’s a bit of a revolution when the logistical chain works,” he said. “And Norwegian seafood with high quality and popularity can benefit.”
The industry is looking for new markets and new ways to boost margins. After advancing more than 400 percent over the past five years, the Oslo Seafood Index has slid 16 percent so far this year.
The Bergen-based equity fund Holberg Triton, which manages about 670 million kroner ($80 million) and invests only in the seafood sector, returned 30 percent since its start two years ago. The fund’s largest holdings as of February included Leroy Seafood Group ASA, Sanford Ltd., Austevoll Seafood ASA and Bakkafrost P/F.
“Bakkafrost is in a league of their own with a 30 to 40 percent return on equity,” he said. “It’s perhaps the best managed salmon producer in the world.”
The salmon industry is struggling with health and sustainability issues due to holding large numbers of fish in a open-water cages but long-term trends of growing prosperity and food awareness will continue to support demand growth, according to Tyssoy.
“Seafood is the only area where Norway has succeeded in creating a global retail product on a big scale,” he said. “Norwegian salmon is status.”