Benchmark set in £19m fish farm deal

Benchmark makes vaccines to keep farmed fish healthy and beat sea lice.
Benchmark makes vaccines to keep farmed fish healthy and beat sea lice.
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Sheffield biotech firm Benchmark Holdings has announced plans to raise £19m to fund a joint venture with the largest salmon producer in Chile.

The AIM-listed company is placing shares to raise cash to acquire 49 per cent of a partnership with AquaChile.

Benchmark chief executive Malcolm Pye.

Benchmark chief executive Malcolm Pye.

Benchmark said the deal would accelerate and de-risk its strategy in Chile, the world’s second largest salmon market, where it has a limited presence.

Benchmark is one of the largest salmon breeders in the world, it also develops vaccines to keep fish healthy rather than using antibiotics to treat disease. It operates in 27 countries and employs almost 1,000.

Malcolm Pye, chief executive, said he expected the joint venture to deliver “attractive returns,” with profits of £1.81m in the four months to the end of September and £4.1m annually at full capacity.

He added: “We are very pleased to announce our Chilean joint venture, which will help us accelerate and de-risk our growth strategy in Chile.

“Combining AquaChile’s existing high quality land-based production and locally adapted genetics, with Benchmark’s breeding and genetics capabilities and IP, we believe, will create a world class operation.

“The flexibility to use our facilities in Iceland to support the joint venture gives us a strong competitive advantage in the market.

“We are also delighted to have received strong support from both new and existing institutional investors for the placing, which was well subscribed.

“Following a good first half performance, we are on track to meet our expectations for the current financial year. The continued growing global demand for aquaculture products, combined with the disease challenges faced by the industry, puts us in a strong position to drive attractive growth and returns in the years to come.”

Benchmark’s major focus is on treating fish such as salmon at a time when fish has overtaken beef globally as a source of protein.

It has partnerships or joint venture agreements with three of the top five salmon producers in the world.

Fish is a much more efficient protein than many meats, with salmon requiring 1.1kg of feed to produce 1kg of protein whilst beef has a ratio closer to 8:1.

Benchmark anticipates making a pre-tax profit in 2019 after investing heavily in research and development in fish farming.

The group reported a 28 per cent increase in revenue to £140.2m in the year to the end of September 2017.