Morning, everyone, both in the room and online. My name is Ivan Vindheim. I'm the CEO of Mowi, for those of you who do not know me. It's my pleasure to wish you all welcome to day two of Mowi's Capital Markets Days of 2024. After what I think is fair to say was a rather busy yesterday, where we visited our 400,000 tons feed factory in Bjugn, our 62,200 tons smolt and post-smolt facility at Nordheim, which is the world's largest, according to my numbers, not to mention our brand-new state-of-the-art 100,000 tons primary processing plant at Jøsnøya, our feeding station in Central Norway, a site visit, just to mention a few.
After seeing, it's believing, so what could be more appropriate than to spend a few hours together this morning, where we present our strategic and operational plans for the coming years? With me to do so, I have our entire group management team present here today. A very complimentary team, if I may say so, composed of highly skilled and very experienced executives. If you take the introduction in chronological order, Kristian Ellingsen, our CFO, Øyvind Omland, CEO of Farming Norway, and Chairman of our Atlantic operation, Ben Hadfield, CEO of Farming Scotland, Ireland, the Faroes, and Canada East, Fernando Villarroel, CEO of Farming Chile and Canada West, Ola Brattvoll, CEO, Sales and Marketing, Atle Kvist, CEO, Feed, Catarina Martins, CTO and CSO, and Kjersti Eikeseth, our CHRO.
And just so the cat is out of the bag from the very beginning, we have another busy day ahead of us with a rich agenda. The first session is mine, and runs from 8:00 A.M. to 8:25 A.M., where I will give you our business and strategy update. Then Kristian will cover the financial section before Ola takes over the baton and walks us through our downstream business. Then we'll have a fifteen-minute break at 9:05 A.M. before Øyvind, Ben, and Fernando will take us through our seven farming countries and eleven farming regions, and Atle, our feed operation. Then we'll have another fifteen-minute break at 10:20 A.M. before Catarina will walk us through R&D and sustainability, including fish welfare, and I will conclude with some closing remarks before our IRO, Kim Døsvik, will host a Q&A session at 10:55 A.M.
For those who are following the presentation online, can submit your questions or comments in advance, or as we go along by email. Please refer to our website at mowi.com for the necessary details. Disclaimer, I think we leave for self-study. With the pleasantries, practicalities, and the disclaimer out of the way, I think we are ready for the business and strategy update.
In all humility, we like to say that Mowi is one of the world's absolute leading seafood companies, if not the leading, and I think we can say the numbers lend us support to say that, as we are number one, measured by both market capitalization and sustainability, in addition to being the world's largest producer of Atlantic salmon by far, with our 500,000 tons this year, which are equivalent to as many as 2.9 billion meals per year or 8 million meals per day of delicious, healthy, and nutritious salmon, which means that one out of three people on Earth eats Mowi salmon during the year if you use one salmon meal per person. So there is some scale to this. Furthermore, we have a fully integrated value chain, we'll get back to shortly.
We are listed on the Oslo Stock Exchange, which I guess most of you already knew, and we are headquartered in Bergen, in Norway, the city we like to regard as the capital of the salmon aquaculture industry. No offense to the other clusters, and finally, last year, we recorded 5.5 billion EUR in operating revenues, which translate into an operational profit north of 1 billion EUR. As this slide reads, Mowi's vision is to lead the Blue Revolution with all that entails, and I guess you could say that follows naturally from our size. As this chart shows, we have a clear number one position in Atlantic salmon. Approximately one in every five kilos of Atlantic salmon consumed in the world comes mainly from Mowi, and not to anticipate events, which is our position, we intend to further strengthen in the years to come.
As already touched upon, Mowi is fully integrated from feed to plate. We produce our own environmentally certified feed, especially designed for the Mowi strain, because contrary to our peers, 100% of the Mowi salmon comes from our own breed, with opportunities that brings. A breed or strain cultivated since the sixties when we stripped the first broodstock in Tveitevågen at Askøy outside Bergen. A broodstock originated from the Vosso River, both famous for their large-sized salmon with late maturity. The seawater phase takes place at approximately 250 seawater farms in seven farming countries, with smolt from 30-odd freshwater facilities, and we harvest and fillet the fish at 12 primary processing plants and produce elaborate products at additional 20 value-added factories.
And further to that, we have an extensive sales network physically present in as many as 26 countries, selling our products all across the world. The value chain, we have organized into three divisions, which are Feed, Farming, and Sales and Marketing. And as already said, we are number one in farming in volume terms. We're also number one in sales and marketing, which is our downstream instrument, and we're number four in feed. Speaking of which, our two feed mills in Bjugn, Norway, and Kyleakin in Scotland make us self-sufficient for feed in Europe through our 2023 production of 528,000 tons. Capacity is 640,000 tons, so we have also satisfactory room for accommodating further growth in Europe. And with a small investment, we can increase it even further. Atle will talk more about this later this morning.
While in Americas, we have chosen so far to buy our feed externally due to lack of scale. Mowi is the only truly global salmon farmer in the salmon universe, with over 500,000 tons this year produced in seven farming countries, which are Norway, Scotland, Ireland, the Faroes, Iceland, Chile, and Canada. Of which Norway is by far our largest farming region, it is 305,000 tons, accounting for approximately 60% of our total farming volumes. Europe combined accounts for approximately 80%, or 400,000 tons, while Americas accounts for approximately 20%, or 100,000 tons. Mowi is also the only truly global player in sales and marketing, with our 20 value-added factories and 26 sales offices in 26 countries.
Last year, we produced and sold 232,000 tons product weight in this part of the value chain, or approximately 340,000 tons of raw material. As in farming, our main footprint in sales and marketing is in Europe, which is the largest market for the salmon, with approximately 75% of our volumes. The remainder of our volumes are approximately equally distributed between Americas and Asia. Otherwise, we never miss out on any opportunity to promote our product, and we will not this time around either. If you have heard this before, please bear with me, and if you haven't, now it's time to prick up your ears, because this is the success formula behind the salmon adventure. This is what carries it all, namely the salmon itself.
Because since the olden days, the Atlantic salmon has been known as the king of fish, and the world's insatiable love for this species has made it the world's most popular fish. And not unnaturally, I would say, as the Atlantic salmon is a fantastic product with great product features. It's scientifically proven natural superfood and great for one's health, as it's rich in omega-3 fatty acids, high-quality proteins, vitamins, potassium, and antioxidants. It has also top appetizing taste, look, texture, and color, which is, of course, of paramount importance in this. We are, after all, talking about food and food experience. And it's versatile for both traditional and evolving food occasions, whether raw, grilled, cooked, or smoked, and it's appealing to people of all ages. Last but not least, farmed Atlantic salmon is the most sustainably produced animal protein.
To top it all, the Atlantic salmon is also the fortunate beneficiary of strong megatrends, such as population growth, a growing middle class with increased purchase power, a rising health consciousness among consumers and society at large, an aging population, exploited resources, including wild fishes at the maximum sustainable yield, and not least, climate change. We have farmed Atlantic salmon's superior sustainability credentials versus other animal protein sources. I guess one could say that salmon ticks all the boxes, and with these powerful drivers, we believe in continued strong development in the long-term demand for the salmon. We have the blue line here on the chart. We also believe in limited supply growth going forward, as we have seen in recent years. We have the red line here on the chart.
Because for a number of reasons, conventional salmon farming faces growth limitations in most countries that are relevant in this context, and so far, so-called new technologies are long overdue, to put it mildly. And personally, I think it will still take many years before they will come into their own and start making a meaningful difference to the global supply. In other words, we believe in a tight market balance in the coming years, and against this backdrop, it should be no surprise to anyone that further farming volume growth is one of our three main strategic pillars. The two others are cost competitiveness and sustainability, including fish welfare, and they are equally important because cost competitiveness ensures profitability and shareholders' return, while sustainability, including fish welfare, is strongly connected to our social license to operate and our ethical conscience.
Everything starts with the farming volumes, which are, at the end of the day, the mainstay of our business model and the lifeblood of this industry. And as you can see from the chart here, we have been through some very productive years in Mowi, because as recently as in 2018, we harvested only 375,000 tons. While we this year are on course for 500,000 tons, which means we have grown our farming volumes by as much as 125,000 tons over the past six years, or a CAGR of 4.9%, and by that surpassing that of the wider industry by a large margin. And this growth has, in practice, been organic growth because we have lost more capacity than what we have bought in the period.
If we can allow ourselves a fun fact on a day like this, this growth alone would have been the world's sixth largest salmon farming company, with old Mowi from 2018 still on top of the list by a wide margin. But as we can see from the chart here, our clear ambition and goal is to continue on this growth trajectory to 540,000 tons in 2026, and further to 600,000 tons in 2029, by means of a CapEx of EUR 600 million. This farming volume growth, we believe, will translate into a top-line growth of 7%-8% per year when we include the rest of the value chain, to EUR 8.5 billion in operating revenues in 2029.
This is not a randomly picked number, because in previous five-year period, from 2018 to 2023, we grew our top line by 7.6% per year. Then we also grew our farming volumes by coincidentally 100,000 tons, which is the plan for the coming five-year period. The numbers, they do add up, and they are realistic in our view. How do we plan to deliver on this organic growth? The short answer is through increased smolt stocking and post-smolt. Because we have still unutilized license capacity in Mowi, in several other countries where we operate, and by means of post-smolt, we can increase the productivity on licenses already in operation.
I would like to remind the audience that we next year will have a quarter of our smolt in Mowi as post-smolt, and in Norway, as much as half of the smolt, if you take Region North out of the equation for natural reasons. Where we plan to do what, so combine the two, we will get back to later this morning when Øyvind, Ben, and Fernando take us through our seven farming countries and eleven farming regions. In terms of CapEx and projects, we have already invested or have projects ongoing to take us to 540,000 tons in 2026. From 540,000 tons in 2026 to 600,000 tons in 2029, we need additional CapEx and projects in the order of EUR 600 million.
For all sake, a potential new license or environmental license scheme in Norway is a wild card in this, and so is accretive M&A. I think it's fair to say we have come a long way in Mowi since we launched our productivity program a few years back. Because truth be told, not much happened on the volume side in Mowi for many years after the big merger in two thousand and six, due to a confluence of factors, some within our control and some beyond. But which are now in the rear view mirror, because we have gone from lagging behind our peers or the industry on farming volume growth to be ahead of the game. This translated into the best earnings per share development amongst peers in previous five-year period from twenty eighteen to twenty twenty-three.
Our clear ambition is to continue or replicate this in the coming five-year period, not only by farming volume growth, but also through cost competitiveness, which is our second strategic pillar. I think we can say we have taken some important steps in this field as well in recent years, which have given us a number one or number two position on cost in the regions where we operate. We can always do better, always. Good is the enemy of great, they say, and that's not only a cliché, there's a lot of wisdom embedded in it. Our clear goal is to further strengthen our cost position in the years to come through a set of new initiatives, both biologically and by more cost generic in nature. Kristian will get back to further details in just a few minutes and put a number on this.
Our third strategic pillar is sustainability, including fish welfare, and as we have said numerous of times, sustainability is deeply ingrained in the Mowi culture and at the heart of everything we do. Because Mowi is a company that lives and operates in close cooperation with nature, and our success depends on having a salmon that thrives and a production that is sustainable and environmentally responsible. So we care for salmon, and we care about nature. But we're not flawless, and sometimes nature turns against us. That's the name of the game in our biological production. Biology is the law, and everything else is just a recommendation. But I can assure you that we work hard every day to develop and do what we do in an even more sustainable way.
I think this slide shows to the full that our work in this field has borne fruit as we have received recognition and awards from near and far. Maybe most notably, we have been ranked by the prestigious Coller FAIRR Initiative as the world's most sustainable animal producer in fierce competition with all the largest animal producers in the world. Just recently, Time Magazine ranked Mowi as one of the world's 500 most sustainable companies, and this time around, across all industries. It doesn't stop there. We can and we will do more because that's our social responsibility, but first and foremost, because we care. Personally, I have to say I have particularly high expectations for our post-smolt venture and what it can do to our biological metrics, including survival rate.
Because there is reason to believe that one can halve mortality at site with post-smolt under the right circumstances. So this is exciting stuff, which we will hear more about later today. From one thing to another, Mowi Feed, as we said earlier this morning, our two feed mills in Bjugn, Norway, and Kyleakin in Scotland, make us self-sufficient for feed in Europe, and we have also underutilized capacity to accommodate further growth, and with a smaller investment, we can increase it even further. While we in Americas have chosen so far to buy our feed externally due to lack of scale, because we are primarily a feed producer for ourselves. So we'll continue to grow our feed operation with Mowi Farming, with laser focus on feed performance and cost.
Because feed is, after all, the single most important input factor in salmon farming, accounting for more than 40% of cost in box and the lion's share of the salmon's environmental footprint. Life is normally forgiving, but here we cannot afford to put a foot wrong, at least not if you work in Mowi. Then sales and marketing. In sales and marketing, our strategy is to further develop our number one position in the market through product innovation, branding, and customer centricity, which means we put the customer at the core of everything we do. So we will continue to develop new innovative, high-quality products, easily accessible to our customers in a dedicated packaging. We will also continue on our long-term strive for decommoditizing the salmon category through our Mowi branding strategy.
We have now launched the Mowi brand in 16 countries, and now we will further develop these markets rather than going into new ones, so we do not end up spreading ourselves too thin, but at the same time, I think it's important to understand that most of the salmon is sold as a commodity, and the fierce competition, particularly in Europe, resulting in a slim margin, so therefore, it's key to be a cost leader here as well, so operational excellence is high on our agenda in sales and marketing, and I have to say, it's very encouraging to see that we stand out on profitability in this part of the value chain, because it hasn't always been like that, that I can assure you. This is the result of many very good decisions and hard work by our organization, from which we are now reaping the fruits.
But I know that Ola and his team have more up their sleeve, which Ola will talk more about later this morning. Among others, a EUR 60 million cost-saving program. Then the cherry on the cake, or perhaps I should say cherry in the cage, Mowi 4.0, our digitalization strategy, which we launched at our previous Capital Markets Day in 2021 to facilitate a digital transformation of our value chain, to make it more efficient and even more sustainable. And perhaps needless to say, Mowi 4.0 is a so-called allusion or a reference to the fourth industrial revolution and all the technological opportunities it brings. And for our part, perhaps most pronounced and evident in the sea phase and through our Smart Farming concept, where we give the analog world in the sea a digital voice through advanced imaging technology and intelligent sensors.
I think we can say we have progressed since 2021 because we now do real-time monitoring of biomass, digital lice counting, and assisted feeding at selected sites, to mention a few. We also use ROVs and drones for maintenance and surveillance, and digital monitoring of the health status of the fish and environmental conditions in the sea is coming. We have rolled out remote operations centers in 10 out of 11 farming regions. The big breakthrough will, of course, be the day we crack the code for autonomous feeding and can track the constantly changing sea and the salmon's appetite from minute to minute. That would be a game changer and a technological innovation on par with the greatest inventions of all times in this industry, I dare say.
Because as we said just a few minutes ago, it is, after all, the single most important input factor in salmon farming, accounting for more than 40% of cost in box and the lion's share of the salmon's environmental footprint. This is exciting stuff, and I can tell you, we are running trials as we speak. So personally, I'm convinced we will get there. It's just a matter of time. Good things come to those who wait, they say. So the digitalization of farming runs its course, as it does on land in our more than 30 factories through our Smart Factory concept. So let's have a look. Seeing is believing.
Mowi has always led the way in perfecting salmon production, integrating every stage of the value chain. Now, we're taking it to new heights. Welcome to Mowi 4.0, where cutting-edge technology meets sustainable innovation. Our Smart Farming begins at Mowi Genetics, where advanced algorithms ensure each generation of our Mowi strain is the best yet. In custom-built recirculating aquaculture systems and state-of-the-art semi-closed productions, real-time monitoring of water quality nurtures strong, healthy post-smolt for the next phase of growth. Our digitalized seawater farms utilize cutting-edge machine perception and learning to monitor fish welfare and performance in real time. We adapt to climate change by deploying drones and applying AI, safeguarding our salmon from environmental challenges like algae and jellyfish. Innovative solutions like subsea farming and laser technology protect our salmon from sea lice, enhancing fish welfare.
Maintenance by robotic cleaning and remote-operated vehicles ensure a stress-free, healthy environment for our salmon. From our remote operations centers, we use precision data to implement tailored feeding with optimized feed from our own factories. State-of-the-art vessels transport our fish to AI-powered smart factories, which guarantee top-quality products, efficiently matched to demand and delivered through our digitalized logistics chain. Our precision marketing and e-commerce tools connect us directly with consumers. In our Mowi Insight platform, we harness countless real-time data from across the whole value chain to drive growth, reduce costs, enhance customer value, and champion sustainability and fish welfare. This is Mowi 4.0, giving our analog salmon a digital voice.
Yes, exciting stuff, I have to say, although...
It is, Kristian, the floor is all yours, so you can take us through the financial section and perhaps put a number on all these initiatives. Thank you so far.
... Thank you very much, Ivan. Good morning, everyone. My name is Kristian Ellingsen, and I will cover the finance section of today's presentation, with emphasis on cost and on financing. Cost is, of course, an important subject in all companies, but especially in salmon farming, and financing is always a relevant subject in a capital-intensive industry such as ours. We want to supply the world with fantastic salmon products, such as the ones depicted here, and we want to do it in a way which maximizes shareholder value, and that is key to be a strong cost performer. Cost is one of Mowi's strategic pillars. We put great emphasis on cost containment. We have a strategic target of performing better than our peers in this area.
The best on cost in sales and marketing, best in feed, and most crucially, the best cost performer in the various farming regions we operate. And this is important. We know that the conditions they vary between the different farming countries both with regard to environmental conditions, legal framework, supplier industry, culture, and other factors. So, we are, of course, working on reducing the cost gap between the regions, but still, some regions have lower costs than others, and therefore, the measurement must be fair and must be performed region by region. And this graph you see here, it shows the benchmarking of the EBIT per kilo versus our listed peers. And over time, this benchmarking captures the differences in cost and operational performance because price differences then they tend to even out over time.
The conclusion is that Mowi is consistently number one or number two in the different regions we operate, and this is a strong achievement. Note that Mowi is the only truly global player in our industry. Our peers are generally regional players. Mowi has a strong cost focus and has had so for several years because cost-cutting initiatives are important to combat the underlying inflation. Other forces which put pressure on cost include biological measures and more complex regulations. Biology and operational performance, they are important cost drivers. If you have poor biological performance, if you struggle operationally, this will for sure increase your cost. We believe that biology will only widen the gap between good and bad performers in the years to come.
We have achieved operational improvements in the last years in Mowi through, for example, increased license utilization, positive scale effects, improved farming KPIs. We continue to seek operational improvements through operational performance. We have many exciting ongoing initiatives, which we expect will contribute positively, such as post-smolt, Mowi 4.0, and other exciting initiatives that we will talk more about today. In addition to improved operations, we also have direct cost-related measures, such as the cost savings program and the productivity and improvement program on FTEs. Today, the business areas in Mowi will look forward present their plans, how to grow volumes, how to improve costs, how to improve their operations.
So today will be mostly forward-looking, but, now at the start of my session here, we will take a look into EBIT, the benchmarking results from the last years, because our good results here, they provide credibility and trust when it comes also to our targets in the years to come. We start with our largest farming entity, Mowi Norway, which is divided into four regions. If you start with the Region South, this region has performed very, very well for several years. And, in addition to a favorable development in volumes and the license utilization, Region South has also worked a lot with their cost base. This is a well-performing business unit, operating in a somewhat challenging environment. If you go to the other side of the country, Region North, then they have performed strongly over time.
We have a solid number one position in what is a good farming region in Norway and in the world. This is the single largest business unit in Mowi Farming. If you move on to Region West, we have also had several years with strong performance in this region, following the split of the old combined mid and west region back in 2021, and in Region West, we are also number one. In Region Mid, we initiated a turnaround process last year, as we believe we have potential to lift our performance in this region through various measures that we will perform, even though we do not have the best site structure. Here we are working on closing the gap between Mowi and the top performers.
In the other six countries, we do very well compared with the peers. We are number one in Scotland, number one in Chile, Canada, Ireland, Iceland, and number two in the Faroes. And this means that we have improved our relative position since the last capital markets day. Throughout this capital markets day, we will focus a little bit extra on Norway, since this region represents 60% of our volumes and an even higher share of our earnings. And this graph shows realized full cost for Mowi Norway versus all salmon farmers in Norway. And we see that although cost has increased for the entire industry, Mowi Norway has improved its cost performance markedly on a relative basis. This is due to better volumes, better operational performance, and a strong cost focus.
We believe that this gap that you see here in the Mowi Norway's favor, this gap is set to just increase in the coming years with all the effects that are coming from post-smolt, Mowi 4.0, scale effects from higher volumes, and our cost savings and productivity programs. This graph shows the development and realized full cost for the entire Mowi farming segment in all seven countries, and we see that the post-COVID inflationary pressure since 2021, which has lifted the cost curve for the entire industry, is starting to improve.
It is the feed inflation, of course, which is the background for the increase here, and we now see a recent easing of this inflationary pressure, with feed prices down approximately 5% year-to-date Q2, and expectations of continued feed price decreases driven by marine ingredients. This positive development has continued in Q3. But cost fighting is an everlasting effort, and to structure our cost efforts, we initiated the cost savings programs back in 2018, and this work has evolved and expanded over the last years. And we have gone from low-hanging fruits to over 1,700 various initiatives throughout the company.
The programs have covered several important areas, such as renegotiations of contracts related to boats, treatments, nets, vaccines, services, fees, other items such as 50% cut in travel costs, 4% cut in energy usage. These cost measures have resulted in a more cost-aware organization. In total, we have identified annualized savings of 307 million EUR since 2018, of which 207 million EUR in farming. This is in part why we also can show a better cost trajectory than the rest of the industry. In the coming years, it's our objective to take this cost savings program to the next level, where we go from just cost savings through various initiatives to a higher degree of cost control.
We would like to become even more proactive and avoid cost, not just cut it once it's there. We are working to get a higher degree of standardization in equipment and purchases across the units. This will reduce complexity. This will enable volume-based savings. Another area of standardization is, of course, the way we track and categorize document spending and costs, so that we can perform better analysis to check comparability between units and really chase all kind of savings across the units. And the cost difference of around EUR 2 per kilo between the good-performing units and lower-performing units is too high, and it's a clear objective for us to reduce this difference. In addition to standardization, we want to capitalize on Mowi Best Practices, Mowi Insight. Mowi Norway and Faroe are our cost leaders.
Chile is also doing well, while we have clear targets to improve the cost level in Scotland and in Canada. For some years now, we have focused on category management, on spending, which we also expect will lead us to realize significant effects. And we also believe that we have a potential when it comes to focusing on life cycle costs, where we don't want to sacrifice long-term savings at the expense of short-term savings. We would like to combine a constant cost focus in our daily work with more refined spend and procurement strategies. The productivity program, FTE development, that has been a success story for Mowi. Salary cost is the second-largest cost item for us, and we can influence this cost item through the way we work, through targeted efforts.
Since 2019, we have realized a productivity increase on FTEs of as much as 18%, from 9% less nominal FTEs and 9% higher volumes. We are on schedule to realize further improvements this year and next year, and we will maintain our strict FTE and productivity focus in the coming years. These improvements, we expect, will be realized mainly through natural turnover, retirement, reduced overtime, reduced contracted labor, and automation. Mowi will maintain its strong focus on cost containment and cost leadership in the coming years, and here we sum up some key contributors to what we estimate is a cost improvement potential in Mowi with the overall effects of 300-400 million EUR.
Some of the key components are post-smolt from less treatment costs, reduced mortality costs, better feed conversion ratio, positive scale effects. We have a Mowi 4.0 in farming through improved growth, lower health costs, as well as other cost improvements through working in a more efficient manner. The cost savings program from cost control, standardization, reduced the cost variation between the entities, life cycle focus, and category management. The productivity program, where we continue our strict FD focus and expect to realize further improvements, in line with our strong track record, in this area, and of course, in addition to farming cost improvements, we roll out Mowi 4.0 in sales and marketing, related to improved efficiency, yield, automation, and smart processing technology. We then move on from P&L and cost to the balance sheet.
We have a very strong financial position in Mowi, with a 51% covenant equity ratio. We are comfortably within our equity covenant requirement of 35%. We have a committed financing exceeding 2.6 billion EUR, where the bank syndicate's sustainability-linked loan as the backbone. In addition to this, we have three bonds and one Schuldschein outstanding. Arctic Fish has a separate financing. A strong balance sheet is, of course, important to support our capital-intensive business and to ensure that we can realize our growth plans. We are committed to maintaining our investment-grade credit rating, obtained earlier this year from Nordic Credit Rating. Our dividend policy of 50% of underlying EPS remains unchanged, and so is our long-term EBIT target of 1.7 billion EUR, based on a harvest volume level of 500,000 tons.
The same goes for a target of 12% annual return on capital employed pre-tax, so following this session, where we have focused on cost in the P&L, then we go to the revenue side in the P&L. In other words, it's time to move on to sales and marketing, and it's my pleasure to introduce Ola Brattvoll, COO, Sales and Marketing, and we will show a video while he gets up here on the stage. Thank you.
Mowi Salmon Origins. Chilean. Mowi Salmon's seven origins span the coldest, most pristine waters on Earth. Canadian. Every variety has its own unique quality. Irish. It's own delicious taste. Faroese. So you can experience the delicate flavors- Icelandic ... the beautiful, vibrant colors. Scottish. The spirits of these seven special places. Norwegian. Mowi Salmon's seven origins. Take a bite and explore! Taste the flavors of Mowi's Atlantic salmon, carefully farm-raised in seven unique spots in the world.
Good morning, everyone, and thank you very much, Kristian, for the introduction. As Kristian said, my name is Ola Brattvoll. I'm in charge of the sales and marketing division in Mowi, responsible for the downstream part of Mowi. Today I want to take you through my division and what our key ambitions are for the future. Just a short introduction. Ivan touched already upon what the key features of sales and marketing is. As Kristian said from the very beginning, our core focus is the customer. So what we do in sales and marketing is to try to create value from the raw materials farmed by the farming divisions. As Ivan said already, salmon is a fantastic product.
It has incredible features in terms of quality and attractiveness to consumers. So our role is really to maintain that value as best as we can and add value by making the product more accessible and delicious for our end customers. So, the key areas we work with, as already explained, is on product innovation, product development, branding, and operational excellence. And of course, we are part of Mowi, and we want to deliver results. And as you can see from the figure at the bottom of this graph, we have improved our results in the sales and marketing area, especially in the consumer products area, which is the value-adding part of the value chain, where our EBIT result has increased significantly since 2018.
In 2023, we had a return on sales of 4.3 on revenues, which is a good result also compared to our peers. As already explained, we are in all the main areas where salmon is consumed. We have processing and sales network, and the most volume and capacity is in Europe, followed by Asia and Americas with about equal capacity. To start with, what is at the core of what we do? We are claiming that salmon is the food icon of the 21st century. Salmon has some fantastic quality, which makes it suitable to consumers all around the world. We are of the opinion that salmon is addressing megatrends much better than most other popular food offers.
If you look to the protein consumption and the growth in protein consumption globally, salmon is one of the products which has grown the fastest compared to all other proteins. This is because salmon is addressing megatrends in a very good way. First of all, as already explained, salmon has credentials in terms of health, which is really strong. Not only the omega-3, which is a proven effect on cardiovascular health and other areas of your health, including brain health, but also when it comes to the quality of proteins, vitamins, and minerals, you get a cocktail which is quite unique and which is becoming more and more important to people when they choose what to eat.
Health is at the core of what people think of when they choose what products to have for dinner at home so salmon has a recognized and very strong position when it comes to health but it's not only health, as salmon has a versatility which is extremely good. Salmon fits eating habits in all corners of the earth. If you go to Asia, salmon is crucial for the sushi consumption, raw consumption. If you go to European cuisines, it fits very well with the French cuisine, with Italian cuisine, and with Spanish cuisine. It is well accepted in Latin America, used for ceviche or other dishes.
You can have it for breakfast, you can have it for lunch, you can have it for dinner, you can eat it raw, you can eat it cooked, you can eat it on the barbecue. So it has a versatility which goes beyond most other products. It fits very well with other ingredients. You can add taste, you can. It has a delicate flavor, but still a quite neutral taste, which makes it fit very well with other ingredients, sauces, spices, marinades, and so on. So this versatility of the product, I think, is one of the key features that has made salmon so popular along in the world, in different countries. I think sushi is one great example. You see a nice picture here of a piece of sushi from salmon.
But sushi and salmon is a good mix and traveling well together as sushi spreads around the world. So even though the product is fantastic and the product has grown significantly, we are still a relatively small protein in the big scheme of things. And this figure is also interesting, I think, because it shows the total consumption of salmon in the key markets, and it shows the per capita consumption in different markets. And as you can see from this figure, the U.S. market is the largest single market for Atlantic salmon, but still has a consumption less than two kilos per capita per year, which is small if you compare it to all other proteins.
It is a growing protein in the U.S., although the last few months have been a bit more challenging. We have seen a very strong growth rate in the U.S. market over many years. The U.S. is now catching up with some of the important markets in Europe, which typically is from 2 kilos and up, and France with 3.3 kilos, Germany with 2.2 kilos, U.K. with 2.4, Italy with 2.4. All these countries have a higher consumption than the U.S., and in my opinion, there is no reason why the U.S. consumer should eat less salmon than what the average consumers of Europe is doing. I think a lot of that has to do with the availability of products.
Products not being available in the shape and form which modern consumers would like to buy is one of the key barriers for increased consumption in the U.S. And this we have addressed by opening up two facilities in the U.S., supplying pre-packed fresh products to retailers all across Europe, now all across the U.S., which has contributed significantly to the increase in consumption in the U.S. over the last few years. So in the U.S., we see a fantastic potential for further growth. We see an increasing interest in pre-packed products, and we believe that this trend is going to continue. In Europe, we still see a growth of salmon consumption. We see that retailers are still making salmon the core of their seafood assortment and that they want to have salmon as a product to lead the seafood category.
And, we believe still there is a good growth opportunity in Europe, as there is in Asia and in other emerging markets. So with this backdrop on, the demand side, we see a future for salmon, which is not limited by the growth and demand, for the future. And in sales and marketing, we believe that we have a unique position to take advantage of this growing demand. As already explained, we have a global footprint when it comes to processing and sales. In Asia, we have six different value-added factories. We have two factories in Japan. We have one factory in Korea, one in Taiwan, one in China, Shanghai, and one in Vietnam. And then we have seven sales offices in the same countries, in addition to Singapore.
And this is to cover a growing market in Asia, where we see that the emerging middle class is asking for more proteins and is becoming more and more health-conscious, and that salmon is a product which they appreciate highly. And we see a strong potential for further growth in value-added products in the Asian markets. Looking to Europe, we have 11 value-added factories and 14 sales offices, and Europe is the most important market to us. And our biggest facility is in Poland, which takes pretty much half of our volume when it comes to value adding globally and is distributing to all the main markets in Europe. There we have a big advantage in scale, making us very cost efficient and enables us to serve all the big retailers with efficient, high-quality private label products.
In Americas, we have grown significantly over the last few years. We have three value-added factories, two in the south, one in the north, one in Miami, one in Dallas, and one in Maine. The two in Miami and Dallas is producing pre-packed fresh products to the retailers in the U.S., and then we have a smokehouse up in Maine, which is supplying smoked salmon to retailers all across the U.S. We have invested significantly in all our factories, and we have invested into more automation, more modern equipment, to make sure that our footprint is adopted and cost-effective in the markets where we see the strongest growth, so our cost performance have improved. We have been cutting costs quite effective.
I will return to that in a minute. And we are utilizing the fact that we have an integrated value chain, where we can link the raw materials all the way back to farming and make sure that we make the best allocation of raw materials to improve our cost performance and also to add value to the end products. Our facilities are well invested. We have invested in modern equipment, and I think if you compare our facilities to the average in this part of the value chain, we have an edge in terms of quality of assets. Looking to our customer network, we are present in all regions. We have connections with all the major retailers.
We are the largest producers, the only global producer in this segment, and we have a link and a contact with all the major retailers across the world. We are known for having a high degree of product knowledge and a high degree of innovation capacity. We have invested significantly into competence and equipment and procedures to be better able to innovate, to deliver more, a better product to customers all around the world. We work intensively with category management, so making sure that the salmon category stands out. Ivan already mentioned branding, as with our vision to de-commoditize the salmon category.
So we use the brand as a spearhead in innovating the salmon category, benefiting both private label and, of course, our own brand, growing the total salmon category in the retailers where we launched the brand. So, we believe that we have, with our setup, with our customer network, and with our branding and innovation capacity, a quite unique position in the salmon market to be leading on the growth of salmon in all the markets where we are present. As already mentioned, the mission of the Mowi brand is to de-commoditize the salmon category, and in many ways, salmon is a kind of silent product, and the brand is giving the salmon a voice. We want to start a dialogue with consumers. We want to explain to consumers the benefit of salmon and the benefits of Mowi salmon.
So by investing into innovation, giving them more choice, more innovation, and a higher quality, we give more value for the consumers. And by giving more value to the consumers, by starting a dialogue with them, by starting to speak with the consumers, we also grow value for our key customers. Because what we see is that when we introduce the brand in a retailer, we attract new shoppers to that retailer, and those shoppers are typically shoppers with a higher level of income, which has a more interesting shopping basket for the retailers. So it's not only beneficial for the actual sales of the brand, but it also add business to the retailers by attracting more interesting customers to the retailer, making them buy more other products, including their own private label.
We have a very low degree of cannibalization, where when we launch the brand, we don't see that the brand sales are cannibalizing from the sales of private label. We actually get a higher shopping frequency in the retailers where we launch the brand, and we get a higher basket value for the shoppers when the brand is launched. So by that, we also create more value for our customers.
Of course, at the end of the day, it's about creating more value for Mowi, and the brand has on average more than 30% price premium to private labels in the category where we have launched it, enabling ourselves to finance the marketing activities for the brand and giving more shelf space for the category, and also giving us access to new private label business within the category of salmon. So the brand has a dual role. It, of course, has a role to generate profits on its own, but it also has a role to grow the salmon category and to help us gain more market shares also in the private label space. I want to show you a couple of examples of how we communicate with consumers.
These two examples I will start with is from France, where we have launched the brand four years ago, and where we engaged heavily with using social media to communicate with consumers. This is two examples from something we did this summer, where we had a salmon wagon rolling across France with our products, meeting consumers, introducing the consumers to our products in retail, in other areas in France, and then showing them how to cook, how to enjoy salmon, and then posting it on Instagram and other social media to gain more awareness for the product.
All right, so that's a couple of small examples of what we do in social media and in-store activities. So in just five years, Mowi has actually become the largest global salmon brand. We launched the brand in two thousand and nineteen, and we are now present in 16 markets. So as I said, the business model is that we get the premium on retail of about 30%, which allows us to have a margin which can finance all the advertising, marketing activities that we do. So in twenty twenty-four, the brand will be standing on its own feet, being operational EBIT break-even, and from now on, we are going to make money from the branding activities.
And this is, I think, quite an achievement in only five years, where we have invested quite significantly into marketing and advertising activities in the markets where we are operating. So by... It proves that the business model is working. Of course, we know that branding is a long-term thing. It will not happen in one year or two year or even five years, so we are in this for the long run. But the business model is working, and we see a significant higher growth in the sales revenues of the brand compared to what we see in other salmon categories. Just a quick video before I move on.
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All right, so as I said, the mainstay of our business is still private label, and in this part of the game, cost is of essence. So cost-cutting, yield, and efficiency improvements are pivotal to our business, and we have a Global Processing Excellence team, which is active in thirty-two factories across eighteen countries. And as the raw material is about 80% of our total cost in this part of the value chain, to have an efficient raw material utilization is a key thing, and yield improvements is at the core of this processing excellence team is doing.
So they work across the different factories in different countries to improve the yield on our raw materials, to make sure that we have the lowest possible raw material cost in the final products, and this is an area where we have achieved significant savings over the last few years. The second biggest cost component in value-added downstream business is salaries, and efficiency improvements and productivity programs is important to us in order to make sure that we are as efficient as possible. We are still a quite labor intensive industry, and we see a great potential for further automation, further cost improvements by using new technology. And then in other areas, purchasing, overhead, SG&A costs, we have also made significant improvements.
So a total focus on cost in the whole value chain, with a key focus on raw materials, salary, cost, and then other cost areas, is at the core of what we do. If you look to what we have achieved since 2018, it's quite significant. In yield only, we have achieved a savings of 38 million EUR since 2019, or in, since 2018, sorry, and you can see from the graph below that these savings have come significantly over the last three years.
And then, the second most important area when it comes to cost in our part of the value chain, as I said, is salary cost, and in this, we have already saved about 20 million EUR, and we have reduced the number of FTEs quite significantly, more than 2,000 people over the period since 2018. And this is by introducing new technology, by having a constant focus on how to do things more efficiently, lean manufacturing, and so on. And then we have worked on other areas, including SG&A, energy, packaging, and so on, purchasing programs, and saved another 17 million EUR.
So since 2018, we have saved more than 75 million EUR in sales and marketing with these areas, and the Processing Excellence team is the key driver for achieving these savings, but we don't think that it ends here. We see a significant potential from introducing more technology in our value chain, so the Mowi 4.0, the smart factories strategy that we are implementing, we foresee to yield even more significant savings in the future, and over the next 5 years, we are estimating another 60 million EUR in cost cuts in our part of the value chain from continuous focus on yield improvement, efficiency gains, productivity improvements, and other areas of cost control, where yield is still at the core of what we do.
We see that using modern technology, where we can link the raw material to the final product to make sure that we make the right allocation to optimize yield, has a significant saving. That is a very advanced process that is required to make that happen because you have to make those choices on the spot. When you know the raw material coming out of the sea, you need to have a system which can automatically direct that raw material to the right factory, to the right product, to have the optimal yield. This is where we believe that the digital technology can help us significantly, and these products are already on its way being implemented, where we think we can achieve significant savings beyond what we have already done on the yield area.
And then on efficiency, we see that automation, new systems for running our factories, has the potential to achieve significant savings in that area as well. So the EUR 60 million cost cut target in sales and marketing is something we are quite confident about and that we think we can achieve over the next five years. So to wrap it up, in sales and marketing, we will continue to add value to Mowi by having a relentless focus on cost, using our Global Processing Excellence team and digital technology automation to further drive efficiency through our value chain. We will continue the work on branding, grow our volumes, grow our EBIT by focusing on the markets where we are already in to get critical mass.
We will stimulate further category growth for salmon by using the brand as the spearhead, and we see a long-term potential, which is significant in terms of volume and earnings for the Mowi brand. We will still continue to grow in selected private label segments. Overall, consumer products growth will be more or less in line with what the farming is growing. And then we will focus especially on continuous growth in the U.S., focusing on the pre-packed market there, which we believe has a significant potential. We also see the same in Asia, and modern consumers asking for more convenient products and pre-packed products in Asia as well, a significant growth potential. And then we also see a significant potential for further growth in the ready-to-eat segment in Europe, where we already have invested significantly.
You can see some of our products outside, sushi and wraps, but we believe that in this segment, we will continue to see further growth for salmon in Europe. So with that, I end my presentation, and I hope that you have a chance to taste some more delicious salmon later today, and also to take a look at our products outside in the cooler, which is a nice representation of what we do on the branding side across Europe. Thank you for your attention. And now I believe it's a break until 9:20 A.M.
Good morning, everyone. My name is Øyvind Omland, and I have the pleasure of walking you through the status and the strategy going forward for our Norwegian operation, as well, for our operations in Iceland. Farming Norway represents more than 60% of the total harvest volume of Mowi Group and operate every fifth farm along the coast in Norway. We are organized in four regions, from Agder and South to north of Troms, and we control the full value chain, including broodstock and genetics, freshwater, seawater, and primary processing. We have 21 small facilities, close to 150 sea farms, 11 broodstock facilities, including two spawning and egg production facilities on land, and we operate four processing plants, one in each of our regions.
We have grown our volume significantly over the past five years, and we will exceed the three hundred thousand ton mark this year and estimate we will harvest three hundred and five thousand ton HOG in twenty twenty-four. During the next five-year period, we will further grow our business and primarily through realization of the value of our new post-smolt facilities, we will reach three hundred and fifty-five thousand tons by twenty twenty-nine. Alongside the volume growth, we are continuing to fight costs, which is key to compensate for the significant inflation we have seen over the last couple of years, and also to continue to maximize our earnings. Our cost improvement program in Norway constitutes of our post-smolt strategy, which will improve cost by increasing our productivity and volume growth, as well as improving biological performance, including improved survival rates.
As some of you saw example of yesterday, we are rolling out our digitalization program and Smart Farming in all our regions, following our global cost-saving program, and we are continuing our turnaround in Region Mid. The growth projections indicated are not including potential M&As, nor environmental licenses, which will have additional potential depending on the framework when they are expected to be launched later this year. License utilization is a key driver of volumes in our industry. The good work and productivity strategy carried out in the various regions in farming Norway over the last years has closed the gap on the rest of the industry and brought us in the lead, where the current volume productions.
Yeah, closed the gap to the rest of the industry and brought us in the lead, where the current volume productions will take us close to 1,250 tons per license in 2024. The license utilizations will be further strengthened through realization of our post-smolt strategy, on which we have just started. Before I move into some more details on the drivers behind the strategy for the next five years, I will give a short presentation of status in each of the four regions and the way forward for each of them. Norway South represents 23% of the volume of Mowi Norway, with close to 70,000 tons HOG projected for 2024. The farms in Norway South are in Production Area one to three , from Flekkefjord to Sotra, and the processing facility, Ryfisk, is in Hjelmeland, in Ryfylke, just outside Stavanger.
In Region South, we have realized a significant organic growth, with more than 30,000 tons and 85% volume increase since 2018. This is through restructuring our stocking plants and improving our site utilization. We will grow our volumes further through significantly increasing the post-smolt numbers. The Fjæra post-smolt facility was our first to be completed and opened in the last quarter of 2023, and we will see full volume effects from 2025, 2026. In Region South, we also operate two farms with closed containment systems, also providing post-smolt for the region. With regards to Smart Farming, the remote operation center is established at our processing facility in Hjelmeland. Norway West represents 28% of the volume of Mowi Norway with 85,000 tons HOG projected for 2024.
The farms in Norway West are in Production Area four and five, with a processing facility Eggesbøneset, south of Ålesund. Region West has delivered strong results after the turnaround and demerge of Region West and Mid in 2021, despite operating in a challenging biological environment. We will continue to grow our volumes in the region through our post-smolt strategy. The Haukå post-smolt facility, located close to Florø and Sognefjorden, will be completed at the end of this year, and also our remote operation centers at Teknopol in Måløy was our first regional center to be established, and has delivered strong results, and has been representing a model center for the ROCs established in also the other regions. Mowi Mid is our smallest region, representing 19% of the volume of Mowi Norway, and projects for 57,000 tons for 2024.
The farms in Mowi Mid are located in Production Area six, with the processing facility at Jøsnøya, south of, on Hitra. As mentioned for Region West, Mid and West were demerged back in 2021 to strengthen local measures to improve biological performance and cost. The turnaround plan in Mid is in progress, where our post-smolt facility at Nordheim is an important part of it. Nordheim, which we visited yesterday, is our largest post-smolt facility and was completed in the fourth quarter of 2023. We have further expansion plans for Nordheim in our post-smolt strategy going forward, which I will refer to later in my presentation.
Jøsnøya, our 100,000-ton slaughter weight processing plant, was completed on time and on budget January this year, and secures harvest capacity both to Region Mid and North, as our volumes from Region North in production area seven will be harvested at Jøsnøya. As for Ryfisk in Region South, Jøsnøya harvest transport is taking place with so-called stun and bleed boats, which means that the fish is harvested when being pumped on board a harvest vessel and transported in closed tanks, stunned and bled, and being chilled on the way to the processing facility, instead of live transport. This is a method more biosecure than traditional well boat with waiting cages, improves fish welfare, and creates more flexibility on transporting across regions with potential disease restrictions, and is the most cost-efficient setup also for Jøsnøya.
Jøsnøya is also housing our regional remote operation center for Mid, and was opened last year. Region North, our fourth and biggest region, represents 31% of the volume of Mowi Norway, with an estimated harvest volume of 94,000 tons HOG for 2024. Region North covers the operations in Production Area seven to 12, with the processing facility at Herøy outside Sandnessjøen. Region North is Mowi's best-performing farming region, with good cost control, good site availability, and good biological conditions, including survival rates. Due to its good growth and favorable conditions, North is a prioritized area for further growth. North is also operating its remote operation center, and that's based outside or based in Bodø.
I will now give a little more details of key strategic areas for Farming Norway, which the ones of you joining us on the tour yesterday also have seen some examples of in practice. The post-smolt strategy is a central part of our strategy to realize further volume growth in Norway. After closing the performance gap on license utilization, taking us to 305,000 tons this year, the capacity for post-smolt at the end of this year will enable further organic growth and improved biological performance.
The commissioning projects at Fjæra in South and Nordheim in Mid, the project at Haukå in West to be commissioned later this year, and also the post-smolt from closed containment systems in South, gives us a post-smolt capacity of close to 30 million 700-gram smolt and a 50% post-smolt ratio in our three most southern regions by the end of this year. Given the framework conditions are right, we will continue our post-smolt strategy. We are in the planning and preparation phase for another four projects. The Nordheim facility in Mid has secured production capacity for another expansion project. In West, we are in the planning and preparation process for a greenfield at Rovde in Production Area Five.
In South, we are preparing for a possible expansion project at Vågafossen in Production Area Two, where licenses are in place, as well as preparing for a full renovation, including post-smolt at our facility, Agder Smolt, in Production Area One. Realization of these projects will increase our post-smolt numbers by another 20 million 700-gram smolt and provide additional volumes after 2029. We also see the potential for increasing license utilization and volume production through post-smolt in Region North, and potential projects will also be evaluated and addressed going forward for this region. Farming salmon is about biological control, where attention to detail is fundamental. Optimizing biological conditions, improving welfare, and increasing survival rates are multifactorial. It involves interrelated challenges, the right knowledge, and parallel approaches to succeed.
Some of the more specific areas in which we are working and in which we need to improve on, also as an industry, is improving industry-wide biosecurity practices, where the whole industry is now gathering around a set of measures for better control of infectious diseases. In Mowi, we also see a significant effect of genetic selection of broodstock and offspring with lower susceptibility for the heart disease CMS, and we're working on the best methods for reduced lice pressure and more gentle lice treatment approaches. Our post-smolt strategy goes in parallel with these targeted measures as it improves survival, welfare, and productivity through effects which are more generic. Through stocking bigger smolt and post-smolt at 700 gram and more, we will reduce the time in sea, which reduces risk in sea, and again, will reduce the lice treatment needs.
It also enables us to carry out more strategic stocking, being able to adapt to site-specific biological risks. And it will also increase site capacity through increased turnover, through shorter production cycles at the farms. Where we do post-smolt, we believe we will manage to halve the cycle mortality. Mowi 4.0 and Smart Farming is another strategic area to enable us delivering on productivity, volume, and also cost going forward. Through the Smart Farming concept, we will give our fish, our environment, a digital voice, which we use for making the right decisions and improving our performance. We are currently using the Tidal AI-based camera system in more than 200 of our pens.
The Tidal system has been developed by Alphabet's X, supported by Mowi's R&D department and Farming Norway, and delivers an all-in-one solution for real-time monitoring of biomass, weight distribution, lice, periodic growth performance, and feed conversion. An autonomous feeding application is in progress. We have also established remote operation centers in all regions, which has improved feed conversion ratio by approximately 10%. We are using remote operation vehicles and drones for maintenance and surveillance. Digital monitoring of fish health status, welfare indicators, and environmental condition is coming. Through the Smart Farming, we will enhance knowledge generation and improve biological understanding. We see this as an important tool for further improving biological metrics, performance, and fish welfare, and also increasing productivity going forward. In Mowi, we are continuously evaluating the potential for improvements, also with regards to the technology platform which we use in our operations.
With regards to closed containment systems, we have vast experience in Mowi, being one of the pioneers testing and supporting development of closed containment when it started as R&D back in 2013. Today, we are operating two farms based on closed containment system, and we see this as a viable concept for post-smolt production in sea. We do, however, not regard this as proven technology for full cycle at scale. On subsea farming, which may have potential for improved lice control, we are reviewing further implementation while we are trialing out the concept at one of our farms in Region Mid. Foundation for reduced lice pressure through shielding technology and also subsea farming has been tested and documented in collaboration with the Institute of Marine Research at our R&D facilities, Centre for Aquaculture Competence in Mowi South, which we have been running for several years.
We're also using lasers for lice control on selected farms, with close to eighty units in the water towards end of this year. Through our Smart Farming strategy, we have established our Mowi Insight, a platform which compiles data throughout our value chain, and through data capture, data analytics, and real-time KPI monitoring, we enable enhanced decision-making and knowledge generation going forward. We continuously evaluate technology, and we implement technology which improves welfare, is cost-effective, and which is scalable and generate value in line with the strategy of Mowi Group. Then I will use my remaining minutes on our operations in Iceland, Arctic Fish. Arctic Fish, where Mowi acquired the majority of the shares at the end of 2022, is our latest addition to the group, with 2% of the volume share, an estimated harvest volume of 10,000 tons, HOG for 2024.
Arctic Fish is based in the West Fjords in the northwestern Iceland, and is the largest license holder for farmed salmon in the region, with 47% of the licenses. Arctic Fish has 13 seawater sites, with operation in all six fjords in the West Fjords, one RAS smolt facility, and a new processing facility recently opened in Bolungarvik in Isafjordur. Even though Arctic Fish is currently one of Mowi's smallest units, we strongly believe Iceland has great future potential. Iceland has unique nature-given conditions for net pen farming, and if the framework conditions and politicians would allow for it, we believe there's potential to grow the industry to become a significant player in the salmon industry, like what has been realized in the Faroe Islands.
During the next five-year period, the focus for Arctic Fish is to grow the volume by utilizing our license portfolio through establishing new seawater farms, increasing the smolt stocking numbers, and also stocking larger smolts. We are targeting just below 30,000 tons HOG by 2029. Sorry. We have introduced a cost optimization program following the model we have elsewhere in Mowi, also for Arctic Fish. The cost level is currently too high in Iceland, and we have set a target to establish a cost level in line with what we achieve in the Faroe Islands. We believe this is the most comparable unit and also a cost level which we believe is within reach. Feed supply and sales are provided by Mowi, creating synergies and value for both companies. Arctic Fish has an attractive and sustainable value chain for realizing the growth potential going forward.
We have a modern and high-capacity smolt facility with RAS technology, with good geothermal conditions. We have plans for expansions on additional on-growing capacity to grow the smolt bigger. We have our seawater sites strategically located in all the fjords in the West Fjords, and a setup that enables alternating production to minimize biological risks. On the processing side, we have a state-of-the-art processing facility from 2024, designed to fulfill the short and long-term needs with the current capacity of 50,000 tons HOG. This summarizes the highlights from farming Norway and Iceland, and how we are working strategically and targeted to realize both volume growth and a competitive cost level also going forward. Thanks a lot. I will hand over the microphone to Ben Hadfield.
Good morning, everyone, and thank you, Øyvind, for the introduction. As Øyvind said, I'm Ben Hadfield. It's my pleasure to present to you today Scotland, Ireland, Faroes, and Atlantic Canada, Canada East, as we refer to it in Mowi. Okay. Starting with Scotland, we project an increase from where we guide today at 64,000 tons to over 80,000 tons HOG weight. We'll achieve this first and foremost by stocking more smolts. So over the next couple of years, from 2025 to 2027, we'll rise from 20 million to 26 million smolts. We also intend to move into post-smolt in a slightly different way than what Øyvind explained, but with much of the similar benefits being realized in the sea. We have made an acquisition of two small companies recently. Wester Ross is in the north of the country.
It gave us approximately 1,500 tons of additional capacity, but it also gave us a big geography to expand within and modernize the farms, and it gave us a fairly niche and high-price achievement brand in U.S., which we continued with. In terms of post-smolt, this is going to take place in the mid part of the country, in a region called Argyll, and I'll come onto that later. Cost control within Scotland is a significant part of what we do. We've right-sized the organization after the mergers, dropping FTE by 15%, and we've made processing automation to secure processing capacity above 80,000 tons in our Blairmore facility in Fort William. Salmon is the U.K.'s largest food export. It's actually second after whiskey in terms of value. Okay. Thank you.
All right, I can speak up, so yeah, the largest food export in the U.K., and yeah, in terms of value, second after whiskey, but that says something about Scotland, and we will not go there. It's subject to stable science-based regulation. The regulation is quite bureaucratic. It takes time. You should think about three years for a license to come through, but we are able to develop new sites in Scotland for relatively low investment cost. We employ quite a large and comprehensive team to do this, and so part of the expansion will be the continued securing of new licenses.
We secured one at the end of last year, in the south of the country, in a place called Kilbrannan, for 2,500 tons MAB, and we fully expect to secure a new site by the end of this year and several going into 2025. In terms of, post-smolt, Loch Etive is quite unique within Scotland. It's a brackish semi-saline system. It's quite a deep loch, 150 meters deep in the middle. It has an MAB production in four sites for around 4,000 tons. It has, unfortunately, a fairly narrow entrance, but we've managed to work our way through this. And 10 days ago, we started to move the post-smolt, around 900 grams from Loch Etive to the large MAB consents in Muck and Rum, where we have approximately 7,500 tons of MAB.
So I checked last night, and we have, at this point, moved one point five million fish at nine hundred grams. So we've got around another eight hundred thousand to go. And how we intend to use the system is to produce two batches of approximately four million post-smolts at seven to nine hundred grams twice a year, with two fallowing events. Full sea lice control, principally because of the fallowing and the cleaner fish program, but also because it's brackish, we don't get any amoebic gill disease or gill damage. So it is quite rewarding to see that when these fish are being moved to the sea, the gills are perfect, and that's a good sign for what we tried to achieve. When we bought Dawnfresh, they also had significant freshwater lake rearing facilities.
To put this in context, we have five other lochs where we grow smolt for the sea. Added up, it's 960 tonnes MAB. What we acquired with Dawnfresh in Loch Awe was 2000 tonnes MAB. So this is a big part of increasing our smolt production, but also increasing the smolt size. So from Loch Awe, we hope to secure the final permissions by the end of the year and produce around 5 million fish, smolts at 250-300 grams, and they will go to the Western Isles and in effect, move us toward post-smolt with a much larger smolt being stocked in these sites. We have actually fully costed, designed, and sought the regulatory permissions for a land-based post-smolt system adjacent to the feed mill in Kyleakin, and we keep this on the back burner.
We'll keep it shovel-ready, but first, we'll execute the project in Loch Etive and Loch Awe and then be ready to move forward with that. The second major part of a successful biological turnaround in Scotland is the breeding of Mowi genetics, fully 100% within Scotland. It's difficult to admit, but it's been a challenge for the entire Scottish industry that we see in the sea phase, mortality of 15%, roughly, with Mowi strain. Unfortunately, with third-party strains, due to lower egg quality and poorer performing genetics, we've seen mortality above 40% in the sea phase, and that's a real handicap for Mowi Scotland and also the Scottish industry.
So our solution to this is to breed 100% of our egg requirement, and actually more than that for contingency and third-party sales, in a new bespoke hatchery, which is constructed in Ardessie. This will produce around 40 million Mowi eggs and is scheduled to be complete in Q3 2025. I think we made a good decision, looking back, to bring the Mowi nucleus eggs into production, so we have the families represented within production, and we're able to expedite this move to a 100% Mowi eggs relatively quickly with this investment. Cost control and cost reduction. Scotland has a differentiated feed strategy. It produces organic Label Rouge, different brands, particularly for key customers. That increases feed costs, but it increases production costs at the same time.
We're focused on reducing costs significantly in Scotland through scale effects and the rise in volume, through consolidation of the farming base, moving from smaller, more numerous pens at a hundred and twenty meters into pens like as you've seen in Norway, a hundred and sixty meters, and also some two hundred-meter pens in what we would class open sea areas. After acquiring these two small companies, I think we feel that it's gone relatively successful, but they came with quite a high number of FTE and a level of productivity that was much lower than what we have in Mowi. So we have taken the FTE number down over the last couple of years from approximately nine hundred to seven hundred and sixty. And this is done now. This is actually at about that level now, and we'll hold it there.
We have the opportunity to follow what's been done in Norway, leading with higher capacity dead haul boats and well boats. So we will reduce the fleet significantly in Scotland and taking the unit cost of harvesting fish and treating fish down significantly. Okay, so on to Faroes, Ireland, and Canada East. I like farming in the Faroes. It's a kind environment. Faroes is a relatively small business unit for Mowi, just three sites, very efficient, and as I said, a great environment for farming salmon. We'll maintain high-quality production, high pigment, and high harvest weight yield. We will seek a lot of synergies with Scotland in terms of things like passive grading and also the management of health. And we will seek to incrementally increase Faroes to around 12,000 tons.
It's worth noting that actually Faroes was the first place that Mowi did post-smolt, and it's worked really well for us. So today, we put out smolts above 500 grams. We'll make changes to the hatchery, improve the growth, and target and move from 500 to around 800 grams over the next few years in Faroes. In Ireland, we've managed to recover from some poor biology and lower harvest tonnage, so we're forecasting to be above 10,000 tons this year and then stay there. Ireland has exceptionally high-quality salmon and a real price premium within the market. It's almost 100% organic production. We will hold the capacity at 10,000 or more tons, but we'll seek every synergy that we can from Scotland.
So the equipment that comes into Scotland, new, with actually quite preferential terms from investment in the UK, and we take that equipment and utilize it fully in Ireland, which ticks our sustainability goals, but it also makes use of every bit of asset that we have. In terms of Canada East, we're in our third year now of actually very stable biology, much lower sea lice levels, dramatically lower levels of mortality, and high harvest weight. So volume is now building, but we're quite humble about how challenging this region can be. In the winter, you can have one degree in the sea, and in the summer, you can have over 20. So it's still a challenging unit to farm, but we're becoming more comfortable with growing the biomass here in a controlled, cost-effective way.
We think that we've right-sized the business in terms of the number of people and the efficiency, and we're targeting over fifteen thousand tons with a steady increase in smolts from five million to above seven million. We have revisited the licensing for the recirculation unit, so we'll do a full environmental statement and secure the move from four and a half million smolts to six and a half million smolts, and we've managed to take the broodstock into a much more secure, biologically contained environment, and it's very pleasing to see ISA challenge drop in this region. Yeah, actually, some of the largest fish that we've seen last year and then this year come from Canada East, which is a nice change in fortune. Okay, thank you very much.
It's my pleasure to invite Fernando up to present Chile and British Columbia.
Hello, everyone. As Ben said, my name is Fernando Villarroel. I am the CEO for Chile and Canada West. I have the pleasure today to be presenting these two business units that represent almost 20% of the total volume for Mowi Group, with 95,000 tons estimated for 2024. The main emphasis of the presentation today will be Chile, with a focus on trying to explain you what are we doing there to have an efficient production at low cost, while we try to grow our business on a sustainable way. Also, I will cover some particular aspect of our Canadian operation, and I will start for Chile. Our operations in Chile harvested 69,000 tons in 2023, and with an estimated volume of 72,000 tons in 2024.
All these head and gutted. We have two production region, Region 10 and Region 11. Those two region are fully integrated with from egg to processing operation and with a more or less uneven distribution in terms of production. We have no operation in Region 12, and at this point in time, we have no intention to enter into new production regions in Chile. We're operating at around 36 seawater sites, with around 27, 28 operating at one given time. We own in Chile more than 150 licenses, and then it means that we have some still some unused licensing capacity, but also means that the licenses that we're using are the only one located on the best production region and on the better production area with the best capacity.
The strategy continue focusing on organic growth, trying to maximizing the stocking within the existing regulatory restriction that we have in the country. Which should give us, in Chile, around 5% annual growth. It achieves our growth. We're concentrated on developing our own existing asset through organic growth. I will come back in the next slide, how we're doing this, on the presentation. Our objective and efforts are having an efficient production at a low cost. Chile, when compared with other production region, it has a very competitive biology and fish welfare, but also very competitive cost. In addition, the industry in Chile, but Mowi in particular, has experienced a very rapid technological advancement, adding more automation and technology, which I will touch more in one of the slide I have further in the presentation.
For the last five years, our strategy have focused on organic growth, and since 2018, we have delivered already 20,000 tons on additional harvest volume, and we plan to deliver another 20,000 ton in additional growth within the next five years, targeting 95,000 ton for our business operations in Chile. We have unused licensing capacity, then we have been growing gradually our production volume in line with the demand. Such a strategy has been done at considerably lower cost than if we were to acquire existing capacity in the country.
The existing regulatory regime in Chile use the future smallest stocking to control the sanitary situation in the country, but also consider some incentive for growth for those farmers that have a good sanitary condition or performance, which is a sort of traffic light system, which is based on mortality, antibiotic usage, and sea lice management. This is the reason why coho has become a very popular species, because it's low use of antibiotic and low mortality, which is one of the key indicators that has a positive impact for future growth.
Then, if we wanna grow in the country above the traffic light system, it has to be done, what we call it, under density rule, which mean using a density on the cage of four kg per cubic meter instead of 17, which is the normal conditions in Chile. So we have a framework agreement with a coho producer, where they transfer the stocking right to us, and in exchange, they get access to some of our unused licensing capacity for their own production via renting or even selling licenses if in case we don't need it or we don't use it. As you saw in Kristian's presentation, in Chile, we are the low-cost producer when compared with our peers down there. This is due to our strong focus on having an efficient production and cost control.
In seawater, we're aiming on using larger and fewer sites for economies of scale, trying to use the best licenses in terms of capacity, environmental impacts, and biological performance. Mowi Chile has also the lowest feed in the group due to the flexibility of raw material basket that can be used for feed ingredient, but also due to the proximity of the main market for marine and vegetable raw materials. We have made, as you can see, significant progress investing in technology, automation, and process improvements that have resulted in an increase of our productivity by almost 60%. Also, we're moving fairly quickly toward the concept of Mowi 4.0 and Smart Farming, and I'm coming back. I have a special slide for this one.
As you can see, as you probably saw on Ivan and Kristian's presentation, in Mowi, there's a great attention on cost as one of our strategic pillars. In an industry like ours, focus on cost is one of the key aspects and is on the core of our operation. We have cost savings of over EUR 20 million since this initiative started in 2018. We put a lot of attention on operational expenses through optimization of the operation and through procurement. In terms of biology and welfare, Chile, for the last number of years, has a fairly stable sanitary situation with very competitive welfare indicators. In terms of survival, we have among the best in the industry.
We use data science to extract, analyze information, to understand the issues and try to make the right decision for fish biology, including the use of new available nutritional concepts to improve fish robustness. We have a very advanced genetic program that focus on growth, disease resistance, and fish quality, which are the main or most relevant traits impacting profitability. Chile, as all companies, within the Mowi Group, focus a lot of on animal welfare. And to improve, we must measure those indicators. And the indicators and methodology being used are the same, used in all business units across the group. Advancing toward the concept of Mowi 4.0, Smart Farming is something that we're progressing very rapidly in Chile.
In terms of feeding, we have already several sites being fed from our remote operation centers, and within the next year or so, we plan to have all sites being fed centralized from two centers, one in each region. We're using multiple multipurpose cameras for feeding and biomass estimation, artificial intelligence/machine learning to support those feeding activities. Photoperiod LED lights, that's what you see there, to boost growth, within other technologies to improve our FCR and improve the growth. In terms of environmental matters, climate change is impacting all production areas around the world, increasing the environmental challenge for sea farming. As a farmer, we must adapt. We're using drones during the summer months for algae bloom monitoring and starting to use artificial intelligence-based image technology for phytoplankton identification and counts.
In the event that we get an algae bloom, we have all sites with air bubble curtains, as you can see in the farm there, and diffuser to mitigate such events. The use of ROVs is extensively used in the industry, and for several years, Mowi Chile now does not use divers anymore for mortality removal. That technology, the remote operation vehicles, is advancing very rapidly, and now we're using ROVs to help with anchor installation, to do maintenance of the anchoring, also to repair nets, and for installation for some of the submerged equipment. In summary, in the case of Chile, we're advancing very rapidly toward the concept of Mowi 4.0, which is helping us of our world of having an efficient production at a low cost while we continue growing our business over there. I will move to Canada West.
Our business activities in Canada are located at the door of one of the largest markets, as is the U.S. However, during June this year, the government of Canada announced a five-year license until June thirty, two thousand and twenty-nine. At the same time, it was announced a new policy that after June thirty, two thousand and twenty-nine, the industry in BC must move away from traditional open net pen in sea and move to closed containment, either on sea or into land. Yeah. Over the just past weekend, we received a draft transition plan from the Canadian government. Unfortunately, that draft plan didn't provide much clarity to us as a farmer. It was more like a guide to continue consultation process with First Nation suppliers and industry in general.
A strategic review for this operation is undergoing, and all options are being considered here. But we need more clarity on the transition plan to have a better picture in terms of what to expect from this business unit. It's very important to clarify that this decision, or this policy made in Canada, does not affect at all our Mowi Canada East operation. And that will be my part. I will leave Atle to do the feed.
Good morning, everyone. My name is Atle Kvist. I'm the COO of Feed in Mowi. We have two feed mills in Europe, one in Norway and one in Scotland, and our daily focus is on making high-performing feed at low cost. Modern facilities, combined with efficient logistics and supply chains, gives us a good basis for low-cost operation. We are turning every stone in our long and complicated value chain to identify and attack cost drivers. We are highly focused on sourcing sustainable raw materials, widening our raw material basket, and last but not least, to develop new feed sustainable feed ingredients. Going forward, we'll continue to grow in line with farming volumes in Europe. Our current capacity, the two feed mills combined, is 640,000 tons.
Today, we have reached full capacity utilization in Norway, and we will, as Ivan mentioned earlier, increase our production capacity in Norway with 60,000 tons in 2027. It will be a small, cost-efficient investment. We will use as much of the existing process equipment and infrastructure. Last year, we produced 528,000 tons. This year, our forecast is in the range of 560,000 tons. The development since 2019 has been quite fantastic and impressive, with more than 20% productivity improvement and excellent feed performance. Picture on the left shows Valsnes, that we visited yesterday, our first feed mill that we opened in 2014. It has two high-capacity production lines, premium coastal location in mid-Norway. Here we can handle three vessels efficiently at the same time.
In the picture, you can see two of our state-of-the-art feed vessels being loaded and one raw material vessel ready for unloading. In 2023, the cost-efficient feed mill set a new production record at 405,000 tons, which is, as mentioned earlier, full capacity utilization. From Valsnes, we deliver feed to Norway and the Faroes. Picture on the right shows our second feed mill in Kyleakin, Isle of Skye, that we opened in 2019. It's a highly flexible feed mill with two production lines: one high-capacity line and one medium-capacity line, set up to produce even the smallest feed sizes. Also here, we have a deep water pier, allowing for efficient bulk transportation of raw material to the feed mill and feed out to the farms by larger vessels.
From Kyleakin, we deliver feed to freshwater feed, seawater feed, and organic feed to Ireland, Scotland, Iceland, and Norway. Our feed mills are highly automated. Within feed, we see 4.0 as a fantastic tool in making high-performing feed, specially designed for the Mowi salmon strain. Our productivity has increased through smart operations, and 4.0 gives always new methods, established methods, and new edge, drives cost reduction, and enhances sustainability. Small example for how we use 4.0 technology today can be seen on the picture. Previously, during production, we quality checked if the feed floated or not. We didn't have solutions for monitoring sinking speed of the feed. Using 4.0 technology, we have developed systems that continuously measure sinking speed during production. This gives us valuable input to further develop our process improvement models.
In short, better prediction and control of product quality. Going forward, we also convinced that 4.0. That 4.0 smart operation will make our interaction with farming even better. Our guiding principle is that every single pallet must deliver 100% of what the fish needs every day. The pie chart gives an overview of the main ingredients in our feed today, and we see it as our job to widen the raw material basket further. With continued investment in feed, R&D, we continue to pursue alternative feed ingredients that provide necessary nutrients for state-of-the-art feed. More than four feed formulas and feeding skills makes us a net producer of fish, with a fish in, fish out ratio of 0.56. Our feed is good for the fish and good for the environment.
In Mowi, we set clear targets and environmental impact targets, and within feed, we are building systems that continuously predict systems' direction towards the targets, incorporating decisions that we have to take on a daily basis. With regards to new sustainable feeder raw material, our target is 10-15% inclusion by 2030, and in 2023, we achieved 4%. In order to have a structured approach to widening our raw material basket, we have established a new raw material selection program. New raw materials will have... That will be a part of our basket, will have to have a low carbon footprint, have the required nutritional value, be available in sufficient volumes, and last but not least, be cost competitive. During the last couple of years, we have also developed a global supplier engagement tool.
This is now fully rolled out with running ESG due diligence of the entire feed supply chain. In the right-hand pictures, picture, categories can be seen for an approved supplier in our system.
... We are sourcing raw materials globally and with a clear target on sourcing as local as possible. We have and we follow strict policy on sourcing sustainable feed raw materials. All ingredients we use shall have a traceability system in place. Marine raw materials we source from supplier would adhere to responsible fisheries and that are certified as sustainable. Also, we use in our feed is 100% deforestation-free. We have a zero-tolerance approach to modern slavery, and the Mowi Code of Conduct shall be for suppliers shall be followed. Thank you. And next is a fifteen-minute break before Catarina presents R&D and ESG....
... Good morning, and welcome. My name is Catarina Martins. I'm the Chief Sustainability and Technology Officer for Mowi. So let's start with R&D first. Mowi's R&D organization is the largest in the aquaculture private sector. With four R&D excellence centers, we are providing impactful solutions to our breeding, feed, farming, and sales and marketing. We exist for more than twenty years now, and over the last three years, we have invested more than 100 million EUR in R&D. We have R&D networks present in all the farming countries where we operate, and that's really important because it allow us to make sure that knowledge is shared and that we accelerate the implementation of that knowledge in key topics such as fish health and welfare, sea lice, post-smolt, and Smart Farming. Our Smart Farming and Smart Factory concept sit at the heart of the R&D work we do.
Let's start with Smart Farming first. At all stages of salmon growth, from smolt and post-smolt production in our recirculating aquaculture systems, through our closed containment systems and full-grown salmon at sea, we are implementing cutting-edge technology that enhances fish health and welfare. In our RAS systems, we are measuring water quality in real time, and this is really important because it facilitates operating the systems in optimal conditions. It also allow us to conserve water and to prevent any system failures, and as well, optimizing the conditions for the fish to avoid stress and disease. Our closed containment systems have been producing post-smolt now for more than 10 production cycles, and there we are also implementing a lot of knowledge that is being generated over the last 10 years.
Today, our production protocols already apply knowledge on the way we use light, the way hydrodynamics happens on those tanks, and also on how to best capture and reuse sludge. Our R&D efforts are truly transforming the way we farm at sea, transitioning it from traditional farming systems to Smart Farming. We are using robots to clean our nets, and we are using the next generation underwater cameras that allow us an unprecedented visibility and control underwater. Our Smart Factory concept complements our Smart Farming concept in our journey to effectively manage a fully vertically integrated value chain, which is really special for Mowi. So all the way from our primary processing plants, through our secondary processing plants, to our global Mowi brand, we are implementing really exciting tools.
So for example, we are implementing data-driven decision making with our Mowi Insight platform, and we are also using control factory systems centers, just like we are using for Smart Farming, so that we enable global benchmarking, so that we are able to help our operations in terms of improving yield and also overall equipment effectiveness. Also, at the end of our downstream, we are using market insights so that we can improve our consumer processes, which is so important for our Mowi brand. So let's take a look at a few examples of our Smart Farming journey so far. Our Smart Farming employs biometric measures to monitor salmon growth. With over 200 units deployed in Norway, we enable an all-in-one solution for biomass, lice, and welfare monitoring, and autonomous feeding.
The next generation underwater cameras enable automatic stress-free lice counting, allowing for more timely treatment decisions. Autonomous feeding, driven by pellet detection and fish behavior, enables our remote operations centers to maximize feeding and growth. The combination of ROCs and autonomous feeding allow us to expedite pen-level decisions. We use robots to clean our nets, providing a stress-free environment and enabling automatic net monitoring capabilities. We have more than seventy robots cleaning our nets as we speak. Here are two examples of systems we are currently using. Mowi is adapting to climate change by deploying drones, AI-based plankton detection, and bubble curtains to shield our fish from algae and jellyfish. Digital alerts help us to take decisions when to activate the bubble curtains. With submerged pens, Mowi is exploring subsea farming, maintaining our fish away from lice, and opening opportunities for lice control in more exposed locations.
Our Smart Farming concepts, combined with closed containment systems for large post-smolt production, offer a unique model to reduce biological risks at sea and optimize fish health and welfare. Let's hear from our fish health manager in Region South in Norway, their experience with closed containment systems in sea at a site called Slåtternes.
[Foreign language]
Great! So considering all these technological innovations, we believe the future is bright, and Mowi's vision on leading the Blue Revolution is really at the core of what we do every day. What does that mean for us? It means really unlocking the opportunities that the ocean offer to produce more food. And as we have heard already throughout this morning, production of food, as we do it, in the sea, it's quite unique. It's very difficult to find any other type of food production that combines environmental benefits, nutritional benefits, the versatility, and also the consumer preferences as effectively as salmon farm does.
We see here from this slide the several different types of environmental benefits from a carbon footprint perspective, from a land use perspective, from a freshwater perspective, and of course, the opportunity that gives to provide jobs to local coastal communities is also quite unique, that is possible with our sector. We are farming our salmon sustainably, and this has been recognized by a number of global benchmarks and ratings. FAIRR has already been mentioned today. It stands for Farmed Animal Investments Risks and Returns, and it has been benchmarking the 60 largest animal protein producers in the world.
Aquaculture companies, together with chicken, with pig, with poultry, with cows, so on a number of key environmental and sustainability and social metrics, from animal welfare, from greenhouse gas emissions, from food safety, from sustainability governance, but also from human rights, from health and safety elements of our own workforce. It's really with great proudness that Mowi has been ranked the number one for five years in a row. In addition, in twenty twenty-four, this year, Time Magazine has recognized Mowi on the top 500 most sustainable companies in the world, and this is food companies and non-food companies altogether.
This is really the outcome and the result of our hard work on our sustainability strategy, which is called Leading the Blue Revolution Plan, but also because fish, they have biological differences, which make them very sustainable, which makes them very efficient in the way they utilizes their resources. This is a snapshot of Mowi's sustainability metrics, revealing the commitment, but also the performance we are having on a number of environmental topics, which are very important. For example, in our greenhouse gas emissions reduction plan, we have managed to reduce 36% our Scope 1 and 2 emissions since our reference year of two thousand and nineteen.
We are also having 95% of all our sites globally with a minimum seabed impact, and also 100% compliant with our sustainable feed sourcing, which Atle referred to, covering 100% deforestation-free soy, but also a sustainable sourcing of our marine raw materials, either being MSC, MarinTr ust certified, or being part of a fisheries improvement project. It has been really a fantastic sustainability journey for us. I also want to mention that our climate targets have been updated in 2024 to be aligned with 1.5, and we have also set a flagship targets which are specific for our vegetable feed raw materials.
We have been in a fantastic journey on reducing our dependency on fossil fuels, and one of the most important actions we are taking there is to deploy hybrid energy systems, so basically using batteries on our feed barges. As you can see there, the numbers allowing us to reduce by 50%-60% the use of fuel in our marine sites. So we have talked about differences between fish and land animal proteins. One of those differences that refer to FCR and greenhouse gas emissions, it's really connected with the basics of biology, right? So as you all know, fish swim in the water, and they also don't need to spend energy on keeping their body temperature constant, as we do as mammals, and so a pig, for example, or a cow would.
And the consequence of that is that the FCR for fish is lower, and consequently, the greenhouse gas emissions is also lower because they are more efficient in the way they use their resources. But that's not only the differences between fish and land animal proteins. There are also other differences related with their reproductive biology. So let's go back to basics, because this is quite important. So let's take a look at the female salmon. Typically, a female salmon would lay between ten to fifteen thousand eggs. So fish are typically considered as r-strategists. What does that mean? Is that they have an external fertilization with a higher number of offspring, of reproductive cells, lower survival rates, and they are much more influenced by environmental conditions.
Unlike, for example, a pig or a cow, you can see the number of offspring. It's much, much, much reduced, and that is part of them being a K-strategist. So they have internal fertilization with a significantly lower number of reproductive cells and offspring, with typically higher survival rates, which are much, much less influenced by environmental conditions. So biologically, fish are not expected to have high survival rates. Despite that, we can see here the numbers comparing farmed salmon and wild salmon, and we see that farmed salmon, because of the more controlled environmental conditions that they are exposed during farming, have a much higher survival rate between 82% and 87%, as compared with wild salmonids, with a typically 5% to 35% survival in the wild.
When we also look at the production time, it's actually very interesting to see as well that Atlantic salmon production time is significantly longer than the most land-farmed animals. As you can see here, typically fifteen months at sea, compared, for example, with one point two months for chicken. So naturally, that will also lead to higher mortality rates with longer production cycles. Despite that, when we actually convert those numbers into monthly mortality rates, then actually we see that farmed salmon has zero point seven mortality, monthly mortality rates, as compared with the other farmed animals here. For example, pig with two point nine, chicken, two point two, lamb with one point five, and that's actually quite significant lower monthly mortality rates when we consider both these differences in reproductive biology and also the longer production cycle they have.
So we see that mortality rates in the Atlantic salmon industry, farming industry, has been kept more or less constant over the last thirty years. So these are Kontali numbers. And it's quite important, everything that you have been hearing today on our post-smolt strategy and our smart farm strategy, because that, in combination with many other things that we are doing, including vaccinating 100% of the smolts, improving further vaccines that we have available, training of employees, working with our suppliers, efforts on R&D, you name it, we are strongly confident that the biological metrics will improve, as well, fish survival and welfare. So that's what I had to tell you today. I'm very happy to give the word to Ivan for a final conclusion and a summary of the key messages we had today.
Thank you.
Thank you, Catarina. Much appreciated, and encouraging stuff, I have to say. It’s time to conclude with some closing remarks before we wrap it all up with our Q&A session, hosted by our IRO, Kim Døsvig. As the first bullet point reads, our clear goal and ambition is to grow our farming volumes by 100,000 tons organically in the coming five-year period. From 500,000 tons this year to 540,000 tons in 2026, and further to 600,000 tons in 2029, by means of a CapEx of EUR 600 million. This farming volume growth, we believe, will translate into a top-line growth of 7%-8% per year, I mean, through the rest of the value chain, to EUR 85 billion in operating revenues in 2029.
Our main focus is flow-based salmon farming with related technologies, but we keep our eyes and ears open for other solutions. Because nothing is carved in stone in Mowi, absolutely nothing. We do what works at all the times, whatever that is, almost. We will continue to pursue accretive M&A opportunities when they arise and fit into our strategy. We'll also continue on our crusade against costs, because we still or we believe that we still have a, an untapped cost-saving potential of 300-400 million EUR in our value chain, which we want to realize. Keywords are ours, are our post-smolt venture, our Smart Farming concept, smart factories, in addition to initiatives that are more cost-generic in nature.
And the same post-smolt venture and Smart Farming concept, we believe will improve our biological metrics considerably in the coming years, including survival rate. Sales and marketing and feed, we will grow with Mowi farming, and in sales and marketing, we will further develop our number one position in the market through product innovation, our Mowi branding strategy, and by customer centricity. In feed, we will continue to have laser focus on feed performance and cost, because, as we have said a few times already this morning, feed is, after all, the single most important input factor in salmon farming, accounting for more than 40% of cost in box and the lion's share of the salmon's environmental footprint. So we simply cannot afford to put a foot wrong. So with this, Kim, I think we're ready for the Q&A session.
So if the rest of the group management team can please join me on the stage, or perhaps not on the stage, but at least on the floor.
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A good question.
Yeah. Yeah. So hi, it's Alexander Aukner from DNB Markets. So two questions. First of all, could you give a breakdown of the cost-cutting potential, the EUR 300-400 million? Where is it going to come from, and how much is from feed, how much is from, you know, good old cost cutting? And also, when we sum up the harvest guidance for the individual regions, we get to a number quite a bit above the 600,000. So maybe a comment on that.
Yeah. So, maybe Kristian can take the cost part of that question. I can start off with the end, just to break the chronology. So that's correct. We like to use conservatism in Mowi. We like to have contingency. So you are correct. So the hundred thousand tons number is what we would say is the best estimate. But of course, if the sun is shining, everything is great, perhaps not shining, but it's raining a lot, then we could do more. But hundred thousand tons is the target, and your observation is 100% correct. We have some contingency in these numbers. So maybe you can say a few words about the cost part there, Kristian.
Yes, I can, Ivan. So, if you take Ola's presentation, he indicated around EUR 60 million improvements in sales and marketing related to yield, efficiency, and improvements there. We also have around EUR 40 million in the cost savings program related to sales, marketing, and feed. And then the remaining, around EUR 300 million, is then related to farming and improved farming costs. So, it's around one third, I would say, on post-smolt, on the lower feed conversion ratio, lower feed cost, the lower treatment cost. Partly offset, of course, by higher smolt cost, but in general, a lower mortality and health cost offsets that together with FCR.
And then around one third in Mowi 4.0 , and around one third then in cost savings initiatives in farming in general, related to taking down the cost differences between the units, related to procurement, all the works that we are doing in the various units to take down the general cost level. I would also say that when it comes to Mowi 4.0 , we have been... You know us, Alex, we like to be a little bit conservative in our indications and estimates. So I think we have a larger potential in that number. We are mainly indicated improvements in Norway, where we start rolling out Mowi 4.0 .
But we all know that we have a big potential when it comes to Mowi 4.0 in Chile, in Scotland, in Canada, and that will actually then come in addition to that.
Christian Nordby, Arctic Securities. When I look at your six hundred thousand tons volume guidance and your revenue target, I see quite an increase in implied group revenue per kilo, and is that driven by more branded sales? Is it price achievement? Is it other things? Can you just give a little bit of a breakdown how you think about that?
Yeah, so in total, the incremental part is the rest of the value chain, which I phrased it, and the branding is an important part of this. And perhaps you can add a few words to this, Ola. Branding is something we really believe in, and you have seen some of our products here today, and this is the future. But Ola, let's hear it from the horse's mouth.
Okay. Yeah, I think you're right. Of course, we see a stronger growth in our branded sales than we see in our average sales, if you like, of consumer products.
... across all markets where we have launched the brand, our growth rate is much faster for the brand and what it is in general in the category. We foresee that to continue, and that our efforts in terms of new product development, innovation, category management, together with the retailers, will fuel the growth of the brand in the sales mix of consumer products. So that in itself will, of course, increase the price on the final products. As I said, we are more than 30% higher in terms of retail sales price on the brand than what we are on private label.
I think that's a big part of it, and as I said, our ambitions in that area is significant.
And when it comes to smart fish farming, it seems very interesting, and that you can optimize sea lice treatments and these things, but how is the capacity to do as many sea lice treatments when you want to at any given time?
Yeah, that's a good question. Øyvind, you are running the biggest farming region. Maybe you can start off.
No, the capacity we plan, of course, every year and every fifth year, we have the long-term plan, where we'll look on rolling development in our production growth, and then we face the strategies and the approaches and the vessel need or the treatment methods based on what we expect, the development to be, and in that, we also take into account now, of course, the Smart Farming concept to get in earlier, to get the warnings earlier, and to get in timely, actually reduces the treatment frequency. It doesn't increase it so that we will. We follow and we just face the resources based on how also the Smart Farming will be rolled out.
Thank you.
Yeah, but before we move on, maybe you, Ben, can say a few words about Scotland, Ireland, the Faroes, Canada East. It's not like we don't have lice there. So tell them a little bit about those islands and country, because often I feel that they are missed out in this or missing out in this.
Yeah. I think the things that we've worked on is site consolidation, so to have fewer larger farms in the right location. We've used fairly complex hydrographic lice modeling, yeah, disciplines to achieve where farms should be based and to reduce the connectivity between them. An increase in the wellboat capacity and also wellboat size, 'cause bigger wellboats are more expensive, but per meter cubed of capacity, you can achieve quite a cost saving and efficiency gain with larger wellboats, and then modern wellboats to also handle the other species that we have in the pens, like cleaner fish, both lumpsucker and wrasse.
Fernando, you have something called the Caligus. Maybe you can say a few words about that and Chile.
Yeah. Caligus is a slightly different species than the normal lice that you see in Europe. In Chile also, we have a bigger, I would say, box tool for treatment. We have also the non-medicinal alternatives that we use from time to time, and the like we call non-medical tool, which is, in the case of, Chile, the most used alternative, fresh water on wellboats, which is fairly efficient. This is short period, two, three hour, with low stress, and give you good clearance for at least a month, month and a half. In addition, we have also availability of mechanical treatment, like SFI and some other alternative that are coming. Also, more availability of wellboat for fresh water coming into the industry than...
That way, we're trying to take that challenge in the future.
I think we are ready for next question, Kim.
Martin Kaland, ABG. It's on post-smolt. Sorry. And,
Can you please repeat the question just for the audience online? Yeah, if you can start.
Yeah
... from the beginning. Yeah.
Martin Kaland, ABG analyst, and it's on post-smolt. So are the assumed benefits and gains from the post-smolt, for example, the 50% reduction in mortality, based on performance of your own post-smolt groups so far, or where does those numbers come from?
Øyvind, I guess you are the one to-
Yeah
... answer this one.
These are clear indications that we see when we have been increasing our smolt sizes over several years. We also have had some groups then with the higher end or higher size range of smolt groups that have been into the sea. So that, in combination with how we see the production cycle and also see the difference between the farms that we operate, we clearly see that by strategic stocking, by strategic approaches to areas and farms where we have more challenges during the autumn, we see that in our production planning, we strongly believe that this can be achievable by stocking bigger smolts. So it's based on both the experience we have seen in farms so far, but also the projections on how we see the cycles are running.
Thank you. One more, if I may, on new technologies. If you were to rank the following technologies based on what you know now and what you would prefer to implement, that would be subsea farming, closed containment, land-based, offshore farming. How would that ranking look like? Yeah, why?
That's a very good question. I don't know who I should allocate it to. Perhaps myself. So you ended with offshore farming that I would do as well, but it's tough to pick between post-smolt and Smart Farming, and luckily wise, we don't have to, right? So to us those two components are pivotal in our plans going forward and to reach the 100,000 tons target that we have in terms of farming volume growth. So they are integrated in this plan, but the offshore farming I should not rule out offshore farming, but we haven't talked much about it this morning, and it's not by coincidence.
One last one, if I may. It's on branding, and you commented that you would like to... or target break even in 2024. But if we go back to the previous targets with 1 billion EUR in revenues and 10% EBIT margin, is those still valid, or where are you in terms of that, those targets, and where can we be there?
Ola?
The targets is still valued, valid. We see the potential for the brand as big. I think the whole branding and strategy is a long-term strategy for us. We are confident on our business model. We see that we can achieve the price premium and the margins necessary to get to the numbers that we talked about initially, and as such, those target stands for us. We are already the largest salmon brand globally, and we are at break even this year, which makes us very confident that the future is bright for our brand. But this is a long-term plan and a long-term strategy for us.
Okay, and then a question from the web, Alexander Sloane from Barclays. Maybe this question is for you, Ola, on U.S. demand. If you can comment on recent demand developments in the U.S. market and also into 2025 and beyond.
Yeah, it's. I guess it's not a secret to this audience that the demand in the U.S. has been weaker last year than what we have seen previously. We have had a stronger growth in demand in the U.S. over many years compared to the rest of the world, and over the last year, that has softened somewhat. I think there are several reasons for that. We have seen a general cost decrease on commodities, resulting in lower prices for many proteins, and combined with the cost of living crisis, we have seen a tendency of somewhat of a down trading on proteins among U.S. consumers, which I think has affected salmon being a relatively high-priced protein in the U.S. market. I think fundamentally nothing has changed.
I think the potential for growth in the U.S. is still the same. I think what we have seen is a temporary bump in the road resulting from the cost of living crisis combined with inflation previously, and now a more heavy competition among proteins in the U.S. I think this is temporary, and actually, if you look to our own sales figures over the last few months, we have seen the start of what we hope is a recovery with stronger sales figures on value-added products, prepacked fresh salmon to key retailers. So I'm optimistic. I think that we will see a better market going into twenty twenty-five than what we have seen through twenty twenty-four.
Alex Jones, Bank of America. The first question on the Smart Farming, I think you talked about 26 sites that you have the cameras at today.
Mm-hmm.
What pace should we expect you to get towards full coverage across Norway?
Øyvind ?
Yeah. That is in progress, and a process we are evaluating all the time. We are focusing on the part of the cycle and the farms and the area where we see the highest value creation and benefits of the solutions so far, and of course we gain experience, and we learn a lot along the way, and we gradually increase as we see the value creation. The value creation is the driver for this. That is what drives the pace of implementation and also where to go first.
And if I can just add a little bit to this. So Smart Farming is the future, so this is just a matter of time. Which refers to your question, but we will get there, I promise. It's just a matter of time.
Great, thanks. One more, if I can, on the cost program. You have the 300-400 million EUR range. Are there areas of that cost program where you have greater uncertainty about the size of the benefit, or is that 100 million EUR range really just a general contingency across all of your efforts? Thank you.
Kristian, I think it's yours.
Now, I would say that this 300 million EUR level in farming then is based on calculations, of course, related to Mowi 4.0, post-smolt, and then the rest of the generic cost program. We of course have worked a lot with post-smolt and Mowi 4.0 since the last Capital Markets Day. A lot of people have been involved, a lot of calculations, analysis. We have tracked developments as those years have now passed since 2021. I think we are pretty confident that these are good indications. We also, as I said earlier, we like to have a little bit of a buffer, so I think we can stand for these numbers.
Okay, then another question from Alexander Sloane, Barclays. It's a tricky one for you, Kristian. It's about the underlying cost. The three hundred million savings achieved from two thousand and eighteen have been offset by inflation elsewhere. With the potential improved feed costs and biological outlook from post-smolt, how much do you think of the indicated savings today of up to four hundred million can drop through the EBIT line in two thousand and twenty-nine?
... Yeah, and again, of course, I would say that this target we have communicated is everything else being equal. So we are not, unfortunately, 100% masters of international inflation on all the raw materials. So I think we have a strong record also there being active in the purchasing team and doing a good job. But, of course, this is also then dependent on the development in raw material prices. But, of course, very positive developments now this year with the strong first season for the Peruvian anchovy with the quota caught, good yields. We now have the second fishery season coming up. I think there are good indications that this could start now in either October or November.
I guess November is the usual start of that second season. And, we have already seen that, fish oil prices have come down, fish meal prices as well, down approximately 25%, we communicated back in Q2. And, I believe they are further down around 9%, the fish meal prices now, where we are standing now. So, I think all the... After a very unfortunate, of course, 2023, we are in a better place when it comes to the development in raw material prices now.
And then, of course, this is difficult to say how this will be in the future, but we will do our part when it comes to working on our operations, our costs, and then try to be as efficient as possible when it comes to raw material purchases in the feed department.
Hi, Katie Richards from Berenberg. Would you say you have a technological advantage versus your Chilean competitors? And how big is your technological gap between your Norwegian operations and your Chilean operations? To what extent do you have the ability to transfer the profitability you're seeing in Norway to other regions?
At least the first part, I think, goes without saying, Fernando.
Yeah.
That one is yours.
Oh, in terms of technology, we are in a global industry, and basically the suppliers of the technology are the same here in Chile. Chile is the second largest market for any supplier. Then technology arrives very quickly there. In terms of primary processing and secondary, and see what technology is, we're pretty much up to speed with Norway. There's no large difference. In the post-smolt, probably we're much behind because at this time we haven't found the economical rationality to invest in that because the regulation does not really give you the full advantage of the post-smolt, then we haven't gone that route. But in general, the technology goes fairly quickly down there. Yeah. The other was?
Can I just add a comment to that? Because you also asked about Norway in comparison, and I just would like to add to it that Mowi Chile has the same cost level as Mowi Norway. And the survival rate is actually higher. So that's why we have prioritized Mowi Norway in terms of post-smolt, because if you can... One thing is to increase the productivity, but if you, at the same time, can also improve your biological metrics, then you get two times the benefit. So back to Chile, so we have down prioritized Chile so far, but I know that there are other actors looking into this, and if you ask me, I think this will also take place in Chile.
It's just a matter of time, but we are a big company. We have a big portfolio, and we cannot do everything at the same time. So we have to prioritize. We always try to pick the low-hanging fruits, so to speak.
Okay, another question from the web on HR people. There's a lot of talk today about Smart Farming and Mowi 4.0 . If you can comment about the competence potential new competence areas for Mowi, if we have the right people for these new functions.
Kjersti, do we have the right people?
I think we do. We do have. There are analyses around in all our regions of what competence we do have and what competence we do need for the future. And we do also have plans set in place to both reskill and upskill our employees in the areas that we see that we need more in technology and more in AI.
Okay, thank you. Another question on feed, maybe for you, Atle. Do you foresee a total exclusion of fish meal, and fish oil, from the salmon diet by two thousand and thirty in favor of algae-based omega-3 and insect meal?
I think the short answer to that is, is no. To go from the levels of fish meal, fish oils that we have in the diets today, to a zero, extremely difficult in that short time period. Five years is a short period, especially replace fish oil with its EPA, DHA content. Algae oil, we use it today, but volume-wise, I think there's still a way to go before we have sufficient volume from new raw materials like insect meal, and algae oils. So I, I think we need to move maybe over to other areas like gene-modified rapeseed oil and stuff like that, in order to take further steps in that direction. And there we are not now.
Hi, Mikhail Manaenkov from BNP Paribas Exane. You clearly see scope for Mowi to continue outgrowing the global salmon industry in terms of harvest volumes for the next five years. Looking at what has been discussed today, including your focus on post-smolt and Smart Farming, what do you think will be the major differentiating factor versus competition that will allow you to outgrow the industry? Thank you.
Good question, and I would say both, because we have unutilized license capacity, because we are the only global farmer, we have some opportunities our peers or competitors, if I should call them that, don't have. In addition, we are all in on post-smolt. That's not what we see with regard to the others. There is more of a mixed bag. Again, I would say both to answer your question.
So no further questions from the web.
Okay, then it only remains for me to thank everyone for their attention. Take care, and have a great day ahead. Thank you.