Halibut firm winds up owing £200,000

By NEIL RIDDELL

An experiment in growing farmed halibut in the isles by three prominent local businessmen has led to their company going out of business owing a £207,775 loan to the public purse.

The Shetland Halibut Company, owned by business partners Alistair Goodlad, John Goodlad and Angus Grains, is being wound up and head of economic development Neil Grant said this week that the loan, from Shetland Development Trust (SDT), will not be recovered. There will be no job losses as a consequence of the business coming to an end.

It is the latest in a series of blows to attempts to establish a halibut farming industry, and there are now hardly any halibut farms left operating in Scotland.

The company was set up around a decade ago and initially farmed the fish from a site at Aith Voe off Bressay, before latterly switching to Lang Sound off Scalloway, but just over a year ago the decision was taken to abandon the experiment because it was not proving commercially viable.

Mr Grant confirmed to The Shetland Times that while Shetland Halibut Company had paid back the money it owed to the banks, the SDT would not be seeing any return on the outstanding £207,775 owed to them, in line with a confidential report which went to councillors in January stating that “nil recovery” was anticipated. In a short statement yesterday, Mr Grant said: “I understand that all of the fish have now been harvested out and that it remains unlikely that there will be any recovery to the SDT.”

Development committee chairman Josie Simpson said he did not want to say too much because the company was still being wound up. “When any local company goes to the wall it’s extremely disappointing but I suppose that’s the business we’re in. They got that loan a long time ago, I can’t remember when, quite a few years ago, but I suppose hindsight is a good thing. But you’re always trying to do your best to keep local companies afloat [and] when it goes wrong you get criticised.”

John Goodlad said the chief problem they had found with growing halibut was mirrored by the experiences of the handful of other companies around the world which have tried growing it – the varying price commanded by male and female fish. The female of the species typically grows to as large as four or five kilos and had been fetching a “fantastic” price of around £8/kg but the male fish stops growing at two kilos and would only command around £3 or £4 for a kilo, he said.

That problem was compounded by the loss of 3,700 escaped fish in a severe gale back in January 2008 which ripped the nets around the cage. “At that stage we took the decision to grow it out,” he said.

The species is still being farmed by Kames Fish Farming near Oban, though it lost 15,000 fish after what was suggested to have been a raid on its nets by animal rights activists back in 2006. Marine Harvest Scotland used to have three halibut farms, two in the Western Isles and one at Loch Sunart in Lochaber, but they were closed two years ago and it switched its business to Norway.

The ratio of fish coming out of the hatchery was somewhere between 70-30 male-female and Mr Goodlad said that had it been the other way around it would have been a “very, very good business”, though the slow rate of growing – around four years rather than the roughly 18 months it takes for salmon – did not help either.

He confirmed that the money owed to the development trust would not now be paid back but said he and his business partners had lost a lot more between them. Referring to the £207,775 loan, he said: “That won’t be paid . . . in 2007/8 and 2008/9 we’ve effectively covered the cost of growing the fish ourselves rather than seek any additional funding, with the agreement of the development trust.

The figure it cost us is well in excess of what the development trust lost. It’s not wrought out. Hindsight is a fine thing but at least we gave it a go – if you don’t try anything nothing ever happens.”

Their idea to try farming halibut, which began in around 2001, was based on providing a niche product as a good alternative to salmon.

They took their first delivery from a hatchery in Scotland and, despite a few problems, decided it was worth persevering with.

They then took a further three deliveries of juvenile halibut from Iceland, the most recent one around three years ago. The business remained on a fairly small scale, growing somewhere in the region of 20,000 fish at a time compared to a norm of between 200,000 and 300,000 for a salmon farm.

Mr Goodlad did not rule out the idea of trying halibut farming again in the future, pointing to the fact that they encountered no disease or sea lice problems. “I definitely wouldn’t say no. Taking the positive, we’ve built up good expertise, we know how to grow them, how to grade them, we know where the markets are. I’m convinced in the longer term the male/female problem will be resolved in the hatcheries and I think it will be a very, very good business.”

Mr Goodlad, Alistair Goodlad, brother of recently-departed SIC chief executive Morgan Goodlad, and Mr Grains are the three listed directors of the company and they also have other business ventures together.

Another of their firms, West Fish Ltd., purcha