A Fresh Start: The Strategic Framework for Scottish Aquaculture

Improved Access to Finance Working Group (FWG)

Presentation to the Ministerial Group on Aquaculture

22 June 2010

Desired Outcomes

Competitiveness of Scottish Aquaculture

Long-term Investor Confidence Development of robust data

and information highlighting value, importance and prospects of aquaculture

Lack of Public Sector Funding Lack of Private Sector Funding Support for Innovation and

New Technologies More efficient use of facilities

FWG: Composition & Methodology

Industry – Salmon, Shellfish, other speciesAssociated Industry (Feed)Scottish Govt. (Marine Scotland, Statistical Analysis)HIESDICrown Estate Insurance IndustryWider Financial Representation (Investment, HP, Venture

Capital, Chartered Accountancy)Corresponding Membership (to date) CSCB

Working methodology to research, analyse and educate those involved in aquaculture in better accessing finance and the finance sector in the value of aquaculture

FWG: Bad News…

Review of Scottish Government economic statistics proved “unhelpful”

Paucity of information and of poor qualityNo further work undertaken

But:Underlying message that aquaculture is wealth

creating and net contributorShortcomings of SG data review being

addressed and scope for improvement

Current Work Programme

“It was the best of times, it was the worst of times…

it was the spring of hope, it was the winter of despair…”

Dichotomy within aquaculture: record salmon prices vs. lack of profitability in other

sectors Implication for financing – the haves and have notsPriority to help the have notsEFF application for two phase programme to address

SME (all species) market positioning and business development

Market Analysis and Business Development Review the size, value and positioning of different sectors within

Scottish Aquaculture (SME) Review of scope for potential expansion and increased market

penetration for individual business Targeted business coaching and development opportunity (SME) Proven track record in devolved areas (WAG, Scotland Food and

Drink) Proven increases in sales and turnover where applied elsewhere

Complementary to work of Marketing Group and other EFF projects (Buyers)

Scope for longer term role out / policy application?

Longer Term Business Support?

Comparable schemes in terrestrial farming (FarmBASS)

Clearing Bank Sponsorship / SG endorsed

Economic development not subsidy and grant

Putting aquaculture on a comparable platform with other food producers and capture fisheries

Putting “Strategic” into the Framework

Longstanding problem aquaculture producers have faced – to achieve an industry that is market led and not production led. Poor profitability profile and margin of return.

2010? Market led, production inhibited.

A better understanding of cost of production, market position, market potential and business development will allow for market led growth, at any scale of production

Allow for improved access to finance based on proven business planning and accurate costing

FWG: Additional Workstreams

Finance Bilateral (Scotland / Norway)Proposed to be held November 2010 in conjunction with first MoU meeting. Pre-meetings underway.

Marks the beginning of a finance sector specific aquaculture outreach programme, commencing 3rd quarter 2010

Public Sector Funding ReviewA desk top review is currently underway, to be reported on by the end of the summer and circulated to industry.

Similar review to be undertaken with SG Agriculture / Rural Development programme for comparative purposes

Scope for tuning of EFFClear problems wrt. accessing non convergence funding (parallel across the EU). Flexibility in company provision of matched funding (government supported loans). Currently being considered by the PMC and EU authorities in relation to state aid regulations

Scottish Aquaculture Fast Facts

Purpose? A concise summary of production statistics and value for Scottish Aquaculture

Form? Annual publication promoting economic importance of Scottish produce.

Progress? Production figures “easy”

(thanks to MSS/FHI) EC Data Regulation

requirements for value proving more contentious

Disagreement over provision of economic value statistics viz. industry data or SG data

To be amicably resolved and production by end 2010

Take away messages

Identified the knowledge gaps and weaknesses

Identified required economic/market analysis and business support

Various projects now /shortly underway to address this

Opportunities for potential longer term sector support emerging

Applicable to all species and sectors, regardless of size and comparative values

Research, analysis and education programme continues