Annual report 2018
Fish is one of Marel's three key protein industries. Marel is a leading global supplier in the sector, providing both 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, both onboard and ashore. Marel Fish contributed EUR 159 million in revenues in 2018, or 13% of total revenues, translating to an EBIT of 7.9%. The business has been transformed in recent years, as investments in innovation and enhanced levels of standardization have increased orders 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 sale and maintenance of food processing equipment for poultry, meat and fish is estimated to be around EUR 10 billion. Of this, fish processing equipment sales are estimated at around EUR 1.5 billion, a figure which is expected to grow annually by 4-6%.
In 2018, Marel Fish continued to enable fish processors to generate higher value through better utilization of raw material, maximization of throughput, and better quality and process control.
In the past year, we have focused on helping processors achieve gains by making the most of digital technology. With the latest technological advances increasingly influencing the way Marel serves and supports the fish processing industry, digital is only going to become more vital in the future.
The wild whitefish segment continues to occupy an important place in the Marel Fish portfolio due to its long-standing use of technology, as well as modern fishing and processing methods. Wild fish is a relatively fixed resource with limited potential for growth in terms of volume, largely due to the state of fish stocks and quota limitations. However, thanks to their investment in high-tech onboard solutions, whitefish processors can now meet the rising demand for wild fish 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 industry. We have also worked for many of the world’s largest processors of tilapia, sea bream, and sea bass. Our efforts to extend our market penetration in this sector has strengthened our position as a leading provider of processing solutions for the farmed fish sector.
Marel was an active participant at global seafood conferences throughout 2018 in order to share its expertise in processing advances, as well as to nurture its close partnership with companies throughout the seafood industry.
Marel participated in the North Atlantic Seafood Forum in Norway, the Global Fishery Forum and Seafood Expo in Russia, and the China Salmon Summit, to name just a few. Gatherings such as these offer the chance to share processing knowledge and expertise with researchers, academics, investors, and influential organizations, both national and international.
At Marel, we recognize the potential for significant improvement in yield, quality and safety by improving processing at every step in the plant. In 2018, we introduced a range of new solutions for fish processing, beginning the moment catch is hauled onboard and continuing to the finished consumer packs.
Marel’s new automatic MS2720 Deheading Machine for salmon was released for sale in January 2018. The new machine offers some of the highest levels of throughput, yield and quality ever achieved for this process. It allows salmon processors to achieve optimum yield from every fish, as well as enabling a better flow by performing high-precision cutting and allowing for the automatic transfer of deheaded fish into our MS2730 Filleting Machine. Besides boosting productivity, the deheader is easy to operate, with all settings and operations made on a touchscreen panel next to the operator platform at the machine’s infeed.
Marel has sold more than 35 FleXicut machines since the revolutionary pinboner and portioner was introduced in 2014, including several FleXicut Marine machines for onboard processing of boneless fillets. The automation of bone removal and portioning with FleXicut enables processors to raise productivity while greatly improving product handling and yield.
As the second generation of FleXicut emerges, greater levels of interconnectivity and new features are improving processing results further, while the reliability of existing systems is fueling the growing interest in FleXicut across the industry.
The pinboning and portioning system now also offers an integrated pre-trim solution and advanced product distribution system that automate this process even further.
The global seafood value chain is facing unprecedented consumer demand, creating a fundamental need for processors to scale up their productivity. At the same time as fish processors face challenges to increase throughput and obtain better yields, they also need to respond to tighter quality and safety requirements.
Through continuous innovation and the incorporation of robotics, analytics software, and other Industry 4.0 technologies, we provide the fish processing sector with a viable means of raising its game and meeting current and future requirements.
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 portioning machines in the 1990s.
This technological transfer continued with FleXicut in 2017. Initially developed for whitefish, the equipment underwent extensive testing in 2017 for salmon applications, and the successful results were demonstrated at the 2018 Salmon ShowHow in February.
The fish industry as a whole is increasingly recognizing that traceability is essential to ensuring food safety. The ability to demonstrate reliable data collection and a valid traceability system from source to shelf is essential to gaining and maintaining a competitive edge, as well as accessing new markets.
As the leading provider of automated data collection solutions to the food processing industry, Marel continues to take a very active role in realizing the vision of data-driven food safety in the fish industry. Our Innova Food Processing Software can provide relevant data to both sides of the supply chain, and guarantee that products meet the highest food safety standards.
In 2018, we demonstrated the QC scanner (not yet released for sale) for the first time, a solution to automate the quality control process. The scanner color grades fillets, and automatically detects surface defects such as pearl stripes and melanin or blood spots after filleting and skinning. With this information, the scanner can determine if fillets need further manual trimming or can skip that step. With automated quality control, processors can both speed up production and raise value and quality.
For Marel Fish, 2018 was a productive year with both greenfield projects as well as standard equipment and system installations. 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 2018.
Primex’s ultramodern whitefish plant at Myre, in northern Norway, became operational in 2018. The latest technology from Marel helps the company ensure high volume and economical processing with the best possible yield, quality, and productivity.
The new factory produces vacuum-packed cod loins and portions, as well as a variety of other products. The Marel equipment extends along the processing chain to include raw material grading, pre-trimming, automatic pinboning and portioning, all of which is followed by quality control and packing. FleXicut is a vital part of the Primex factory concept, and new robot technology from Marel is helping to increase the efficiency of product distribution and handling at the facility.
As well as achieving a very high level of automation, Primex also uses Innova Food Processing Software to manage and optimize the whole production process, controlling the distribution of raw material coming in and controlling production based on product orders.
Shanghai Hi-Chain Foods’ salmon processing facility completed its first full year of operation in 2018, utilizing a new Marel processing line that was installed in 2017 - China’s first automatic processing line for salmon.
In recent years, Chinese salmon processors have increasingly looked to technologically advanced processing equipment to improve performance and food safety, raise yields, and reduce costs. The installation marked a shift in the nature of many of the jobs at the factory, and Marel’s service engineer were in close contact with Hi-Chain from the start to ensure successful installation of the plant.
The plant produces up to 30 metric tons of salmon products every day, and the Marel installation is vital to ensuring filleting, trimming, pinbone removal, skinning, portioning and slicing is carried out effectively and in a timely manner.
Leroy Seafood Group’s new plant in Norway became one of the most advanced salmon processing plants in the world when it began operating in 2018. The facility is equipped with high-tech salmon processing systems from Marel that are setting new industry benchmarks.
Marel supplied solutions for pre-rigor filleting lines, including new deheading machines that transfer fish to five parallel filleting lines, as well as whole fresh salmon packing and logistics solution for the plant.
The salmon is brought directly into the factory early each morning, and leaves the factory packed as fillets or whole fish later the same day. By filleting so close to source, Leroy saves on freight costs, raises the quality of the end product, and reduces the carbon footprint of the salmon that ends up on our plates.
In 2018, Icelandic fish processor G.Run installed two FleXicut pinboning and portioning machines, a FleXitrim flowline and two packing lines. The installation was part of a major expansion of the company's facilities in Grundarfjordur, Iceland, which includes a new 2000m2 building.
The FleXicut systems enable G.Run to increase the primary product ration, which is extremely valuable to them. The upgrade also helps the processor meet its goals of significantly raising throughput without adding more staff. The project marks the first time the FleXicut has been used for processing redfish. With two FleXicut lines running, one can be used for redfish and the other for cod and similar species.
Marel's Innova Food Processing Software is a vital element of the installation. The software supports the complete integrated system and compliance with quality standards and food safety regulations, as well as improving utilization of the raw material.
Marel Fish contributes both directly and indirectly to increased sustainability in the world of food processing. Improved raw material utilization preserves resources, both natural and economic. Our equipment is designed for optimal energy and water usage, as well as to facilitate cleaning, all of which is geared towards using resources more efficiently.
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. Automated factories are expected to aim at increasing their level of automation, while highly automated players will be eyeing robotics and hands-free processing. An increase in entry-level automation is also anticipated.
Reduction of manpower is also a key emphasis, with companies increasingly prepared to invest in technology to reduce costs and/or compensate for a diminishing supply of labor.
Changes in dietary habits have brought a continuous rise in the demand not only for seafood in general, but also for differentiated and value-added seafood products. This will continue to be a major growth driver for the industry. Innovative solutions in both salmon and whitefish will set new industry standards in the coming years, with major Norwegian and Icelandic processors leading the way. Watershed installations are already underway, and will likely set the tone for others to follow.
In 2019, global salmon production is forecast to rise by 3.6% to 2.7 million tons. Atlantic salmon will account for an estimated 93% of the production. Norway continues to dominate production with around 49% of the forecast production in 2019, followed by Chile with 31%. After an impressive 18% increase in 2018, salmon production in Chile is forecast to increase further by 2% in 2019, compared to an expected 4% increase in Norway. The two countries continue to dominate the market.
The global production of tilapia is now shown alongside pangasius, instead of catfish as last year. In 2019, global production of tilapia and pangasius is expected to rise by 3.2% to surpass 7.0 million tons, of which pangasius accounts for 1.3 million tons.
China continues to lead the tilapia market with a 32% share, followed by Egypt with 17%.
According to forecasts, global production of cod will continue to shrink, and amount to 1.5 million tons in 2019, a decrease of 5.6%. Atlantic cod is expected to account for 76% of production. Russia continues to lead with a 28% share of the market, followed by Norway with 22%.
In 2019, the cod catch is expected to decrease in all leading countries except Iceland. Icelandic production has increased gradually from 2014. Iceland overtook the US and Canada in 2018 as the third-largest supplier of cod and is expected to remain in this position in 2019.