The fish industry is one of Marel's three key protein industries. Marel is a leading global supplier of advanced standalone equipment and integrated systems for all stages of the fish processing value chain. Our systems range from single scales to integrated production lines and turnkey systems, onboard and ashore. Marel Fish contributed EUR 132 million in revenues in 2017, or 13% of total revenues, translating to an EBIT of 4.3% which is below long term targets. Marel Fish has been transformed in recent years and is on the right track as investments in innovation and standardization of the business has delivered good orders received and improved margins.
The consumer value of the global poultry, meat and fish market is estimated to be around EUR 1,200 billion, with the fish market accounting for an estimated 200 billion. More specifically for Marel, the market for food processing equipment and its maintenance for poultry, meat and fish is estimated to be around EUR 10 billion. Of this, fish processing equipment is estimated at around EUR 1.5 billion and is expected to grow annually by 4-6%.
In 2017, Marel Fish focused on enabling fish processors to generate higher value through better utilization of raw material and maximize throughput, quality and process control. The wild whitefish segment continues to occupy an important place in the Marel Fish portfolio due to its long-term use of technology and modern fishing and processing methods. Marine sourcing of wild fish is a relatively fixed resource with little potential for growth due to the state of fish stocks and quota limitations. Thanks to their investment in high-tech onboard solutions, whitefish processors are now able to meet rising demand for products by improving the utilization and value of their catch.
Aquaculture has been the fastest growing food production segment in the last decade and Marel Fish has a strong foothold in the sector, especially in the salmon part of the industry. We have also worked for many of the world’s largest processors of tilapia, sea bream and sea bass. Our efforts to further our market penetration in this sector in 2017 have given us a strong position to continue this expansion in 2018 and beyond.
Marel Fish revolutionized the cod processing industry yet again with the addition of a new pre-trim line and robot packing solution for FleXicut that offers automatic pinbone detection and removal. FleXicut has been very well received, with sales to both land-based operations and onboard processing throughout Europe and North America in 2017.
In salmon, Marel continued to push the boundaries, developing innovative new primary plants in Norway and Denmark. As the year progressed, unusually high whole-salmon prices returned to a more moderate level, stimulating the trend towards consumption of filleted, portioned and sliced salmon – all added-value products in which Marel has invested heavily to create the leading processing equipment in the industry.
Marel Fish demonstrated an almost hands-free process throughout the production chain at our Whitefish Showhow with a new configuration of a FleXicut line.
The concept, with a new pre-trim solution and packing robots further down the line, means that pre-trim is the last place the fish is touched by human hands. The packing robots are yet another cross-industry application that was originally developed for poultry and is now applied to fish.
The FleXicut pinboning and portioning system is a perfect example of how Marel transfers technology between processes and industries. Its technology is the result of innovation and development of x-ray technology that started with the SensorX in 2004 – a machine that is now the quality assurance standard in the poultry industry – and image processing and computer applications that Marel started using in its intelligent slicing machines in the 1990s.
This technological transfer has continued with FleXicut in 2017. Initially developed for whitefish, the equipment underwent extensive testing in 2017 for salmon applications. The successful results were demonstrated at the 2018 Salmon ShowHow in February.
Data is increasingly valuable in today’s high-tech processing environment. The ability to track and analyze data is key to competitiveness for fish processors. Innova was featured at ShowHows and other events during the year where customers could see machines generate data in real time and learn how Innova uses the data to provide full production control. A comprehensive Innova conference attracted a large group of fish processors in 2017. The aim was to help them stay on top of production control and realize the full potential of our overarching software solution.
In 2017, visitors to several major exhibitions and Marel’s Whitefish ShowHow were given the opportunity to walk through a computer rendered model and a 360° video from inside a high-tech cod processing plant equipped with a FleXicut line. The experience gives unique insights into fish processing advances, without having to transport an entire factory to various locations around the world. We also began using Virtual Reality (VR) in the development phase of products, saving engineering hours and shortening development time. The use of VR shows how we make full use of technology both to develop and to demonstrate our products.
In 2017, we released the results of primary innovative work undertaken to meet current market demands. We are known for taking our technology across industries and this year we transferred results from innovative work in robot technology from the poultry sector into fish processing. The solution is called RoboBatcher Flex. We use this award winning robotic application for batching fixed-weight products and automatically styling them into retail trays. This improves yield and greatly reduces giveaway.
The FleXitrim pre-trim line was another step forward for the whitefish processing industry in 2017. The new features of the FleXitrim, fully integrated with the current FleXicut system, make it the only solution on the market that offers the sophisticated combination of automated quality control and full traceability of individual portions all the way to the final pack. The new M360 wrap-around labeler was well received in the fish industry. It employs the latest technology in flexible, linerless labeling.
The MS 2720 salmon deheading machine, released on January 1, 2018, was pre-released at the Marel Salmon ShowHow in February 2017. This innovative solution offers some of the highest levels of throughput, yield and quality ever achieved for this process.
For Marel Fish, 2017 was a productive year with an increase in greenfield projects, which average 25% of our overall project load, with standard equipment and system installations accounting for 75%. The whitefish segment had steady sales of standard systems to current and new customers in all our regions and the farmed fish team participated in large greenfield projects in Scandinavia. The following examples illustrate the variety of those projects we undertook in 2017.
In 2017, we undertook our largest ever project in this industry, a greenfield facility for Norwegian fish processing giant Leroy Seafood Group. Another major greenfield project involved a new, ultramodern whitefish plant for Primex, Norway, which will set a new benchmark in the whitefish industry. The project includes completely new robot technology that will improve product distribution and handling.
The Saudi Arabian processing giant NAQUA continued to work with Marel to improve processing. In 2017, the company decided to double its already impressive throughput and install new packing lines and the Innova Paperless Quality Control (QC) system. This was an extensive project with multiple installation phases, most of which were completed during the year.
Marel, Icelandic processor Samherji and Dutch processor Parlevliet & Van der Plas entered into a substantial partnership agreement to modernize the processors’ operations onboard and onshore with FleXicut systems. Samherji and Marel have worked closely together for decades on developing advanced fish processing solutions, and this extensive cooperation contract reflects the two companies’ shared passion for innovation.
Marel Fish contributes both directly and indirectly to increased sustainability in the world of food processing. Our focus on improving product utilization and increasing yield serve sustainability in various ways. Improved raw material utilization preserves resources, both natural and economical. Our equipment is designed for optimal energy and water usage and to facilitate cleaning, all geared towards using resources sparingly.
For Marel, the key factors for future market growth include the expansion of the farmed whitefish segment and the overall rise in automation in fish processing around the world. Processing volumes in farmed whitefish are expected to rise exponentially in the years to come. Currently automated factories will increase their level of automation, highly automated players will look towards robotics and hands-free processing and an increase in entry level automation is expected. Reduction of manpower is the driver in Europe and North America, where companies are increasingly prepared to invest in technology to compensate for a diminishing supply of labor.
Changing dietary habits and a continuous rise in the demand, not only for seafood in general but also for differentiated and value-added seafood products are major growth drivers in the industry. Innovative solutions in both salmon and whitefish will set a new industry standard in coming years, with major Norwegian and Icelandic processors leading the way. Watershed installations are already underway and will set the tone for others to follow.
In 2018, global salmon production is estimated to rise by 7.6% to 2.6 million tons. Atlantic salmon is expected to account for 94% of production. Norway continues to dominate production with an expected 50% of the total production in 2018, followed by Chile with 29%. Salmon production in Chile is forecast to increase by 11% in 2018, compared to an 8% increase in Norway. The market will continue to be dominated by these two countries.
In 2018, global production of tilapia and catfish is expected to rise by 2.6% to 6.5 million tons, of which catfish will comprise 1.3 million tons.
China continues to lead the market with a 25% share, followed by Egypt with 15%.
According to forecasts, global production of cod will shrink to 1.7 million tons in 2018, a decrease of 5.4%. Atlantic cod is expected to account for 75% of production. Russia continues to lead with a 27% share of the market, followed by Norway with 22%.
In 2018, the cod catch is expected to decrease in all leading countries except Iceland. Icelandic production has increased each year from 2014, as stronger cod stocks have enabled higher total allowable catches (TACs).