Fifax as an investment

Why invest in Fifax?

1. Proven ability to operate a high-technology fish farming facility

Fifax’s operations cover the full production chain for farmed rainbow trout. Fish are hatched, cultivated, purged and slaughtered under one under one roof at Eckerö production facility. The end product is fish ready for customer deliveries. The full production chain is achieved in an almost closed-loop plant, with limited effect from external factors such as the weather, climate, environmental factors and water disturbances.

The Company expects to achieve its targeted fish stock level of 900 tonnes by the first half of 2022. As a result of achieving a continuous and stable fish stock of 900 tonnes, Fifax would be able to reach the full production capacity of the Eckerö production facility during the first half of 2022. By achieving the full production capacity, it would be possible for Fifax to produce approximately 3,200 tonnes of whole fish to be slaughtered on an annual basis

2. Production-related and commercial benefits of RAS farming of rainbow trout

Land-based RAS farming of the kind conducted by Fifax has certain production efficiency related advantages. As a land-based facility offers more possibilities to optimize the growth environment of the fish through a fine-tuned, largely automated system-operated process, Fifax has the ability to manage the consistent high quality of its product. In addition, the fish grow in a relatively steady and stable manner, and year-round production is more predictable compared to more traditional fish farming methods.

The rainbow trout produced by Fifax is well-suited for land-based farming, and has certain key advantages compared to salmon. Rainbow trout is somewhat less sensitive to changing temperatures and other external conditions, which contributes to a lower mortality rate. Rainbow trout also grows to harvest size at a faster rate, and is likely to have a somewhat better feed conversion ratio. In other words, rainbow trout more efficiently converts feed into the final output of fish meat and at a faster rate, which in turn enables a more efficient production process. In addition, the somewhat higher flexibility with respect to harvest size offers commercial benefits as Fifax is able to utilize market gaps for smaller fish by slaughtering fish in different growth phases in accordance with the wishes and needs of customers. This enables adjusting production to correspond with prevailing demand, to some extent. Besides benefits attributable to the production process, the final product generally has some less fat and more protein than salmon, which is however essentially dependent on the feed provided.

3. Fifax’s growth is supported by megatrends

The growth in sustainable fish production is supported by strong food megatrends. Key drivers shaping the overall food market include:

• increased awareness of the benefits associated with a healthier diet with less red meat;
• increased awareness of sustainability aspects and consumer demand for corporate responsibility;
• a preference for locally-produced food;
• demand for food free from antibiotics, chemicals and pesticides; and
• an increased interest in food innovations.

4. Healthy fish with minimized environmental impact

Fifax continuously applies water treatment procedures to the water in the grow-out tanks in order to maintain the health of the fish. RAS production allows the fish to grow in optimized conditions with total control of the water coming in and going out of the system, while recirculating nearly all of the water used. Parameters for temperatures and oxygen levels can be adjusted at all times to improve the growth and well-being of the fish. The grow-out tanks are constantly monitored for algae and other similar impurities. Any solid matter in the tanks is regularly collected and removed during the process. Land-based fish farming also prevents adverse effects to the wild fish population, which in traditional farming methods can occur.

The RAS method aims to maintain the growth environment of the fish clean and minimize the environmental impact of production. Throughout the entire process, factors affecting the quality of the water in the fish tanks, such as temperature, oxygen and pH values, are continuously monitored and measured. The large masses of water in the grow-out tanks are constantly circulated and purified in the water treatment units, where carbon dioxide and solids such as feces are filtered out of the water, and ammonium converted to nitrate in biofilters. A small part of this flow is released into the sea after it has been treated, and a similar amount of new clean water is pumped from the sea to the facility. Fifax only releases water back into the sea after it has been treated and purified. In addition, in land-based fish farming any waste or by-products from the fish is collected and, to the extent possible, re-used as e.g. fertilizer. This reduces the burden on the surrounding waters. All the electricity needed for Fifax’s operations is produced currently with renewable wind energy.

The location of Fifax’s production facility in the Åland Islands provides close proximity to its current key target markets in Finland and Sweden. Additionally, the short transportation routes result in relatively low transportation emissions. The location contributes to Fifax’s ability to conduct its activities in a sustainable and reliable manner. Fifax also has access to reliable supplies of water and energy.

5. A more sustainable alternative to conventional fish farming methods

Fish is one of the most sustainable sources of animal-based protein compared to other traditional animal-based sources. Conventional salmon farming causes approximately 20 percent of the carbon footprint and consumes less than one seventh of the water compared to the production of red meat¹⁾. Fifax’s management believes there will be increasing pressure to increase the use of more responsible protein sources.

In addition to the waste and emissions, other negative impacts on the environment related to the conventional fish farming may arise from, for example, the use of chemicals, the fish farming’s impact on wild salmon species as well as diseases for example caused by the increased amount of sea lice.

According to the view of Fifax’s management, the Company’s operations also enable supporting several of the UN’s sustainable development goals by promoting healthy living and well-being as part of a healthy diet. Fifax’s focus on sustainable production methods also addresses the need to reduce the carbon footprint and climate impact of animal protein production, and promotes conservation of the seas and the sustainable use of marine resources.

¹⁾Sources: Feed conversion efficiency in aquaculture: do we measure it correctly? SINTEF (2020) Greenhouse gas emissions of Norwegian seafood products in 2017, Mekonnen, M.M. and Hoekstra, A.Y. (2010): The green, blue and grey water footprint of farm animals and animal products, Scottish Aquaculture Research Forum (SARF) (2014): Scottish Aquaculture’s Utilisation of Environmental Resources, and Fifax’s management estimates.

Financial and operational targets

Short-term (2022)

• Fish stock at full capacity (900t) in the first half of 2022
• Production corresponding to full capacity (3,200 tonnes/year) in the first half of 2022
• Construction of the expansion of the Eckerö production facility expected to begin in 2022

Medium-term (by the end of 2026)

• Expansion of the Eckerö production facility in full operation
• Revenue exceeds EUR 50 million
• EBITDA 25 percent of revenue
• Establishing business operations that commercially capitalize on accumulated know-how concerning RAS technology and projects

Long-term (by the end of 2030)

• Continue the expansion of the Company’s operations through constructing new facilities
• Significant revenues from business operations that commercially capitalize on accumulated know-how
• Revenue exceeds EUR 100 million
• EBITDA exceeds 25 percent of revenue