Monday, 16 May 2016

And Along Came the Little Blip - Marine Harvest That Nobody Really Wanted - Kjersti Sandvik, Under the Surface

And, then, along came the little blip that was Marine Harvest, this little shelf company that did nothing, but be swept along as a small molecule in a much larger shark-take-all meal.

Sandvik says: "The large, Dutch fĂ´rkonsernet Nutreco showed interest, and in spring 2000, the papers signed. Hydro Seafood was sold for 3.5 billion and added to the small farming company, Marine Harvest, Nutreco already had secured. The Norwegian-owned farmed locomotive was history, and Nutreco could reap the fruits of Hydro Seafood acquisitions raid of concessions along the Norwegian coast."

So the government corp got into the business and sold it for a vast profit. And many in the govt were unhappy that a Norwegian owned firm was sold abroad. So while the govt did little to block the sale, even though the free licenses were now worth millions of dollars each, it then got right back into the business setting up a new company:

Sandvik goes on: "But in other countries, there was still opportunities. With governmental Norwegian kroner were rights to farm Atlantic salmon in Chile, Canada and Shetland secured. This time it happened through the state Company Statkorn Holding."

So, in Canada, in BC where a license is a measly $5,000, the Norwegian government got a whole lot of essentially free licenses that like those at home were really worth millions of dollars, but the 
BC and Canadian governments apparently didn't know this, and the Norwegian government and fish farm firms didn't tell them. Much further down the road they got the feds to weaken the laws because they said they were not competitive with other countries - in essence a threat to move out and lay people off. This happens all over the world. So the scenario is: free licenses, weak laws, and workers the first to be let go.

This is the push pull part of fish farm spin. And also, their euphemism for requiring looser laws, for examples, to chemical, is that it is 'modernizing' the law. They don't acknowledge that it is simply making the laws weaker. For example, in Canada, cypermethrin, a banned chemical and one that Cooke Aquaculture paid, I believe, a half million dollar fine, for so using. And one that kills lobster. 

I'll post the chemical content of fish farm fish shortly.

Go look at my News Bites post that shows how frequently workers get laid off all around the world:

And then back to the tiny Marine Harvest... well, no, more Sandvik: "The government's involvement in the industry was little consistent. First they shared the salmon licenses free. Then they were even one of the most eager acquirers of concessions and contributed to the pure acquisition raided along the Norwegian coast. When farmed locomotive began to get on track, they sold it out of the country. So it went for six months and politicians were finally aware of the bonanza aquaculture our. Once they decided to allocate money to throw himself on the purchase carousel. Pan Fish - an adventure that cracked One of the keenest early acquirers of operating licenses in Norway was Arne Nore. The company he collected licenses, named Pan Fish. This was in the late 1990s years, when financial capital seriously got eyes to the enormous profits to the aquaculture industry."

So we have business and government working in lock step, and billions to be made. This is the boom part of the Boom Bust Industry cycle. Of Pan Fish, the boom was, from formation in 1992, it grew to over ten billion in eight years to 2000. This is typical.

The Pan Fish story began with Arne Nore and two other employees at CBK bank, building up fish farm holdings for their employers, under the Christiania Marine name,  who, when the bank crash came, were able to buy Pan Fish for a measly 2.6 million Kroner.

Sandvik: "But it would prove that Arne Nores faith in steadily rising salmon prices, growth, growth
and more growth, was wishful thinking.

This is the Boom Bust Cycle of fish farm companies.

Here is the Bust. Sandvik: "Arne Nore would make Pan Fish a fully integrated company and bought herring oil factories, which he partly funded Pan Fish shares. But at some point began analysts to lose faith in the company. Pan Fish shares plunged. The results disappointed investors. The value continued to fall."

And: "Arne Nore was out of the industry. He gaped over too much. But his idea to build a large, fully integrated farming business, with control over everything from feed to finished product, liver
on the John Fredriksen-controlled Marine Harvest, company Pan Fish was eventually merged."

So Boom Bust, and beginning of a new Boom - Marine Harvest.

But first a bit of the mud on Pan Fish, Sandvik:

"In the book Up like a bear. The story of Pan Fish from 2004 call farmed journalist Aslak Berge Pan Fish for "Norway's largest equity bubble" 21 "In sum, they earned three founders totaling at least 280 million kroner on shares they acquired from Bank 2.6 million. This stands in stark contrast to deficits when Pan Fish lost 4.5 billion crowns, "said Berge for Today Business in conjunction with the launch of boken. 22

Berge said Pan Fish was driven so recklessly and irresponsibly that it was bordering on the criminal."

Small purchased farms were paid largely in shares of Pan Fish, so when it went under a lot of small operators were also bankrupt.

 Go back and read the story of Fredriksen and Panfish et al:

Then, read this, and note that the fish farm is calling the bank down, which is a tactic of fish farms to lash out at others for the problems in fish farms, as in, the banks didn't know what they were doing and so we lost money.

Sandvik: Banks' losses on farming bankruptcies in 1991 came up in one billion. SpareBank 1 Nord-Norway also lost money on aquaculture, all NOK 933 million in 1989. The following year the loss was 446 million kroner. 23

"Banks' assessments of the market in the mid 1980s was nonexistent, and the situation in recent came up, testify extremely poor banking expertise " commented January Vilhelm Seiring, chairman of Settefisk Manufacturers Association Fiskaren in 1991.24"

And that blip of Marine Harvest, keeps being a blip, but not for long. 

But first, how much money did John Fredriksen make from Pan Fish you ask? Well, a whole lot, and all for shareholders (the underlying theme here being that fish farms are not about giving the little guy in rural areas where there are no jobs, a job):

Sandvik: "Nine years after John Fredriksen went into aquaculture came confirmation on how smart
it had been buy Pan Fish. According to the then Director Tor Olav Trøim shareholders have been able to share a profit of 15 billion compared Fredriksen went into the industry in 2005 until 2014.28"

To repeat, that is: 15 billion to shareholders.   Note that the value of the Kroner exchange rate is typically 15 to 17 cents Canadian or roughly six kroner per dollar.

For example, the exchange rate is .16 dollar per kroner on May 16, 2016. The following site does exchange rates through time. See:,+Norwegian+Kroner&ie=utf-8&oe=utf-8&gws_rd=cr&ei=coc6V5_9NYTwjwO-tKaACw#q=exchange+rate+norwegian+krone+to+canadian+dollar.

At 6 kroner per dollar that means Pan Fish paid $2.5 Billion to shareholders. As in Boom.

Now move forward to the May 21, 2016 post on Marine Harvest and the responsibility of a fish farm company solely to shareholders; 

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