Aker BioMarine has found a new solution for cost-effective production of a new nutritional health ingredient for human consumption. The breakthrough is presented today at the company’s capital markets day.Aker BioMarine is streamlining the organisation and focusing on its core competence; sustainable krill harvesting, producing high-value ingredients and sales and marketing.
”We are shifting gear and focusing our efforts to make Aker BioMarine even better in those areas where the potential for profitable growth are the biggest. In Aker we are putting a lot of effort in to make Aker BioMarine succeed,” says Leif-Arne Langøy, chairman of Aker BioMarine. Mr Langøy is also chairman and chief executive officer of Aker ASA.
Future focus
At Aker BioMarine’s capital markets day, the company is announcing three changes related to its future growth and direction.
A breakthrough in the production of krill powder and tablets on board the company’s vessel, the Saga Sea. The powder is concentrated Omega 3 phospholipids. This is a cost-effective way of producing a new health product in the form of a tablet for human consumption. The product is an additional product to Superba™ krill oil, and it is intended to sell it directly to consumers in the US market from the first quarter of 2009.
The vessel Saga Sea has sufficient capacity to cover Aker BioMarine’s requirements for sustainable harvesting and on board production of krill meal, krill oil and the new krill powder. The new production solution means the company’s needs are covered with one vessel. The Atlantic Navigator will therefore be sold to Aker ASA for $100 million, subject to approval from Aker ASA’s board of directors.
The decision to focus purely on the krill business means Aker BioMarine’s fisheries business in Argentina and on the Faroe Islands will be spun off in a separate company. It is proposed that the new fisheries business is sold to the existing shareholders in Aker BioMarine. Aker wants to maintain a holding of at least 82.9 per cent in the company that includes the operations in Argentina and on the Faeroe Islands, and the other shareholders in Aker BioMarine will be offered the opportunity to maintain their relative holdings in the fishing company. More information about the offer will be presented during the fourth quarter of 2008, with the aim of closing the transaction before the end of the year.
”Aker BioMarine is still a start-up company. We are introducing necessary measures to reduce the debt, cut costs, strengthen the focus and increase the chances of future profitability,” says Kjell Inge Røkke, chief executive of Aker BioMarine.
“We have documentation showing that our products have positive effects on health and we have initiated new studies that will hopefully give more positive answers and arguments in favour of daily doses of Omega 3 phospholipids, whether they are taken as Superba™ krill oil or as tablets from krill powder,” adds Mr Røkke.
Four-point action plan
At the capital markets day, Aker BioMarine is presenting a four-point action plan to strengthen the focus on the company’s core activities and improve the results.
First, the company is streamlining operations, and the krill business is the core activity. The sale of the fisheries businesses in Argentina and on the Faeroe Islands and the sale of the Atlantic Navigator are important steps in this direction.
Fixed costs are further reduced by streamlining the organisation. The 50 per cent stake in O3C Nutraceuticals AS, which is involved in developing and producing high value concentrated Omega 3 oils, will be sold. This is a joint venture company, owned together with GC Rieber. The centre for lipid technology in Hovdebygda on the north western coast of Norway will, as previously announced, be closed down or divested.
Costs will be further reduced by cutting production costs and increasing the meal production.
The final point is a targeted sales effort towards a few, large partners. In the Nordic market, Aker BioMarine has a sales and marketing agreement with Life Europe for Superba™ krill oil. This agreement covers more than 600 shops and outlets. In January 2009, the company will start selling the new krill powder-based tablet directly to consumers in the US market.
These measures will reduce significantly Aker BioMarine’s debt and fixed costs.
“This means that Aker BioMarine does not require any injection of additional capital. More information about these measures will be presented when the company reports third quarter results on October 29, and when more information about the sale of the Atlantic Navigator and the fisheries businesses in Argentina and on the Faeroe Islands is available,” says Mr Røkke
