Updated: Aker finally achieving necessary scale in krill business, CEO says

By Hank Schultz

- Last updated on GMT

Aker BioMarine photo
Aker BioMarine photo

Related tags Krill

If you want to play in the krill game, you have to go big, says Aker BioMarine CEO Matts Johansen. And after years of development and investment, Aker BioMarine is finally achieving the scale necessary to be reliably profitable.

Its all about scale. You have the same fixed costs no matter how big you are,​ Johansen told NutraIngredients-USA.

Inauguration of a new krill harvesting vessel​ now brings Aker’s fleet to three fishing vessels and a supply ship, all of which operate out of Uruguay. Aker  holds two of the krill fishing licenses granted to Norway by international authorities.

Norwegian competitor struggling

Another license belongs to Aker’s Norwegian competitor Olympic Seafood AS. The fate of that license and the vessel that uses it is now up in the air with the bankruptcy negotiations of Emerald Fisheries AS, the Olympic subsidiary that operated the vessel. The krill raw material harvested by the ship was extracted and marketed under the Rimfrost brand of krill oil ingredients.

According to a report in the Norwegian press​, the parent company has been recapitalized. It is unclear if Rimfrost can continue in business without a secure supply of krill raw material. Olympic founder Stig Remoy was quoted as saying a solution to enable Rimfrost to survive is still being sought.

"Emerald Fisheries As and its owners have been working hard to ensure the long-term financing and ensure a successful solution with the company’s creditors to ensure further operation of the harvesting vessel F/T Juvel. The company’s proposal has not been accepted by the company’s largest creditor and the negotiations have ended, but we are still working to find a solution for F/T Juvel. Rimfort AS will continue pursuing its business in the krill market.  F/T Juvel is not crucial for this continuation of Rimfrost AS in the krill business,"​ said the company in a statement." 

Big investments require big economies of scale

Johansen said the realities of the krill business make it a game not for the faint of heart. Huge investments are necessary and, much like the oil and gas industry that forms the overwhelming majority of the business of Aker BioMarine’s parent company, huge investments require equally massive economies of scale.

Take the new vessel. Johansen said that it incorporates all of the lessons learned in Aker’s first two vessels.  The new ship, which represents a $120 million investment,  is 427 feet long and 89 feet wide and the superstructure towers 10 stories over the water.

The ship is designed to be highly efficient. Better heat exchange technology in the on-board krill processing facility saves fuel. Heat for the initial extraction process is the biggest fuel cost in the operation of the ship, with propulsion consuming a smaller share of the overall fuel bill, Johansen said.  But even there, the ship has state of the art engine and propulsion technology, he said.

It is all related to our sustainability approach. We have a corporate message of improving human health and planetary health. The new vessel as all the latest technology in terms of being environmentally friendly. Its carbon footprint is significantly lower,” ​Johansen said.

The new ship will also use Aker’s proprietary harvesting technique, in which krill are gently pumped from the water directly into the internal processing line. The net in which the krill are captured stays submerged throughout the operation. Having to haul a net up tends to damage the delicate krill as the animals in the bottom of the net are crushed and ruptured by the weight of those above.  The chemistry of krill makes them spoil very quickly, meaning in the traditional fishing scenario of dumping tons of shrimp onto the deck, some of those are already degrading before processing can begin.

Market considerations

Krill supplements © robynmac
Image © iStock/robynmac

Aker BioMarine has also invested in a new processing facility in Houston, TX.  That plant, which after a protracted gestation period is now running at full commercial scale​, represented the first foray Aker made into it doing its own extraction. It has enabled the company to develop new forms of krill oil that are both desalted to remove most of the fishy odor and can be offered in higher concentrations.

Taken together—the fleet, the extraction facility and ingredient R&D—Johansen said he estimates Aker has spent between $400 million and $500 million in building out the krill business. That wouldn’t make sense if only dietary supplements were involved, Johansen said.

We could already supply all of the demand for nutraceutical ingredients with our two existing vessels,” ​he said. We have a big chunk of our business in aquaculture feeds and in pet foods.

The market for omega-3 ingredients has been stagnant in recent years, Johansen said.  After years of double digit growth, several years ago the market stalled and then actually contracted, at least in North America. But Johansen said there are signs that the omega-3s market will show low single digit growth this year.

We have some exposure to the nutraceutical market. But while that market has been struggling, the other markets, aquaculture and pet food, have been soaring,​ he said.

Commitment to sustainability

In addition to securing its own business, Aker BioMarine has put up funds to help secure the natural resource it harvests. In the past the company has donated a week of ship time on its vessels for marine biologists to study the krill, in part to verify the size of the population to make sure the harvest, which is now set at about 1% of the theoretical biomass, doesn’t cut into that. With the new vessel, accommodation was made for researchers to be on the ship working full time.

And the company has helped fund the Antarctic Wildlife Research Fund, which was established in January 2015 by representatives for ASOC – The Antarctic and Southern Ocean Coalition, WWF-Norway and Aker BioMarine.  According to Aker, AWR was established to ensure a resilient Antarctica, in which decisions about conservation and fisheries management are based on precaution and up-to-date knowledge. 

The mission of the fund is to fill critical gaps in research and monitoring to improve the management of the Antarctic krill fishery. Current research projects include investigations into the foraging behavior of humpback whales, the development of a method for determining the age of krill, and krill movement and distribution.


An earlier edition of the story contained an inaccurate translation of the Norwegian press report.  This version of the story has an updated characterization of that report and contains a statement from the company.

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