AKVA’s contracts cancelled due to COVID-19 crisis
A little less than five months ago AKVA Group was poised to deliver on a couple of multimillion-dollar aquaculture contracts. But as the whole world slipped deeper into the chasm of the COVID-19 pandemic, the Norway-based aquaculture services and equipment provider witnessed projects worth nearly $60 million suddenly scrapped.
The company’s subsidiary, AKVA Group Land-Based A/S had signed a deal last December to provide the technology behind an 8,000 metric ton recirculating aquaculture system (RAS) project that Nordic Aqua Partners was building in China.
The project’s value was estimated at $47.7 million. AKVA agreed to put in $3.4 million in equity in the project, according to a report in SeafoodSource.com. Financing, however, was cancelled because of the COVID-19 crisis.
Another AKVA subsidiary, AKVA Groupe Chile S.A., was contracted by Cooke Aquaculture Inc. for a RAS facility project in the Latin American country.
The contract was worth $11.3 million.
Citing the challenges and uncertainty brought by the pandemic, Cooke Aquaculture decided to cancel the deal.
Before the global pandemic, things have been looking very rosy for the precision aquaculture market.
A report in January by research firm Markets and Markets forecasted that demand for increased efficiency in aquaculture operations will push the precision aquaculture market to grow to an estimated $764 million in 2024 from its previous worth of $398 million in 2019.
However, widespread national lockdowns and international border restrictions implemented by nations in a bid to prevent the spread of COVID-19 have flattened the market.
Citing COVID-19 related challenges, AKVA reported that its net profit fell from $1.8 million to losses of $8.1 million.