Feed solutions make the difference

EWOS has developed solutions for the aquaculture industry for almost eight decades, creating value for our customers and continuously improving business efficiency and sustainability. Our dedicated research and development organisation, EWOS Innovation, plays a pivotal role in our innovation value chain and therefore contributes greatly to our successful operations and our ability to offer valuable solutions to our customers. 

Some descriptionLast year was a demanding year for us from an organisational perspective, but we continued to provide feed solutions that make a difference for our customers and I would like to share some examples with you.

Formulation solutions

Towards the end of 2013, EWOS Innovation documented the performance of a concept feed formulated with an extremely low level of marine ingredients in a large commercial-scale salmon feed trial.  The results revealed a performance comparable to that which we have come to expect from commercially available EWOS grower feeds, both in terms of growth, fish health and fillet quality. Our ability to create low marine feeds is therefore a good example of how EWOS solutions make a difference for the aquaculture industry.

Health feed solutions

We have more examples. During 2013, EWOS introduced a new health feed concept to describe an innovative portfolio of feed products that contribute to the health and welfare of farmed salmon in challenging sanitary conditions. Since introducing the first health feed, EWOS boost, more than 15 years ago, our health feed portfolio has matured to include a rich mix of medicated feeds, products to support the salmon immune system and a new and exciting segment of clinical diets.

Raw material solutions

Our own solutions are impressive, however our collaboration with suppliers in the development of sustainable raw materials adds further value for our customers. This ongoing work has enabled us to reduce our marine dependency on fish meal and fish oil from a global marine index level at 59 percent in 2002 to just 28 percent in 2013.  This has enabled a significant growth in salmon aquaculture volumes the past decade without increasing demand for marine ingredients, but we will not stop there. Together with Hordafôr in Norway, we are increasing the use of marine trimmings and by-products in our feed. Marine trimmings and by-products are a nutritious resource for salmon feed that otherwise goes to waste. In 2013 our use increased to 31 percent from 24 percent in 2012. EWOS is also engaged in research for new raw materials, such as modified plant oils and microalgae.

Transparent reporting

As a large global purchaser of raw materials EWOS is conscious about our ecological footprint. Sustainable aquaculture feed depends upon responsible sourcing. To practice this, we monitor and audit our suppliers. In 2013 we performed 52 supplier audits, reaching 95% of our target. This is a stable level compared to 53 audits in 2012. A Code of Conduct for Suppliers clarifies what we expect of our suppliers in terms of ethical standards.

Through our sustainability reporting we strive to be transparent in our use of raw materials and report a number of sustainability indicators. Among these is the amount of registered community complaints in relations to our business, mainly our feed plants. In 2013 7 complaints were registered and followed up world-wide through our quality control systems, an unchanged level compared to 2012.

An independent EWOS

2013 was an eventful year for EWOS. I assumed the position of CEO in March 2013 and only a few months later EWOS was purchased by an entity indirectly and wholly owned by funds advised by Altor Equity Partners and Bain Capital Europe LLP. Therewith began the transformation of EWOS from a longstanding business unit under Cermaq ASA to a stand-alone company, and a fully independent feed supplier.

Strong volumes in Chile and UK, lower in Norway

At an EWOS group level revenues increased in 2013 compared to the full year result for 2012, mainly due to the passing on of higher raw material prices to customers. EWOS Norway ended the year with a loss of market share in a declining feed market. An unforeseen reduction of customer volumes in the Norwegian market in the first half of 2013, created a situation where we were unable to adjust our cost base quickly enough to react to the volume loss. EWOS Norway constitutes approximately 50% of the group volume and this loss in customer purchasing is the main reason for the fall in EWOS Group operating results, compared to the record results of 2012. EWOS Chile had a record production of 372 thousand tonnes and maintained its market share in a declining market. Growth in the UK market and an expanding market share helped boost EWOS UK’s production growth by 23% to 108 thousand tonnes, a new production record. Contraction in the British Columbia salmonid feed market contributed to fall in sales volumes of 15% for EWOS Canada, while feed volumes for other species increased in Vietnam increased by 23%.

EWOS Group sales volumes were 1 137 thousand tonnes for 2013, compared to 1 208 thousand tonnes for 2012. Operating revenues increased 5% to NOK 10 840 million, due to the pass-on of higher raw material prices, although higher costs per tonne decreased EBIT pre fair value by 32% NOK 484 million, compared to NOK 735 million in 2012.

I would like to thank all our dedicated employees at EWOS for their hard work and valuable contributions in 2013. We enter 2014 as an independent company set for growth and the industry’s best solution provider.

Einar Wathne
CEO