I thank the Chairman for giving us the opportunity to present to the committee. As the Chairman outlined, the Minister, Deputy Coveney was before the committee last month and briefed it on the new initiative, Our Ocean Wealth. We are focused on the seafood element of the initiative. It is evident to those of us in Bord Iascaigh Mhara, the seafood development agency, that this is a great opportunity to recognise the potential for Irish seafood at last. There is a significant, growing demand worldwide for seafood and I will outline this in more detail. There is a huge opportunity for the Irish seafood sector to play an increasingly important role in our economic development, especially in coastal constituencies where there is an absence of economic alternatives.
We try to focus on three strategic priorities to develop the seafood sector. First, to add value to our existing catches. Second, to scale up the Irish seafood sector to avail of the market opportunity. Third, the priority on which I wish to focus today, to try to increase the amount of our production coming from aquaculture or farmed fish. I intend to discuss a particular initiative, deep sea fish farming. This involves our growing the volume of product from our aquaculture sector. I understand my presentation has been circulated. There are many graphics in the presentation and this is deliberate because it is a new concept and much of it is visual. I will talk the committee through the presentation.
As with food in general, growing market opportunities come from the fact that the world population is growing. There are 7 billion people on the planet and this will rise to 9 billion by 2050. Whether they purchase computers, glasses, or microphones is open to question but, without question, they must eat and they will eat a considerable amount of seafood. Much of the consumption is driven by the growing middle class in the Asian-Pacific region. China is topical at present. The graph on display shows Chinese consumption. In 1995, consumption was 7 kg per head of population there. This will rise to 36 kg per head of population by 2020. Since there are 1.3 billion Chinese, this amounts to a considerable volume increase. I returned from a successful trade visit to China with the Minister, Deputy Coveney. The opportunities for Irish seafood there are immense. The scale of the market is huge as is the demand for protein. The protein of choice for many Chinese is seafood. This will create vast demand in the marketplace in the coming years.
The Food and Agriculture Organization of the United Nations, FAO, based in Rome has examined this issue. It estimates that by 2030 the world will require an extra 42 million tonnes of seafood per annum to satisfy demand. The graph before the committee on slide No. 4 shows three colours. The reddish colour at the bottom of the chart shows that industrial fishing will not increase by 2030. Since the sector is constrained by quotas, wild capture fish will also remain static until 2030. The real growth and volume increase can only come from increased numbers of farmed fish. This is because there are no quota constraints and no impediments to individuals or countries getting involved in this area.
The next slide asks whether this presents Ireland with an opportunity to increase our farmed salmon production. The slide shows demand in four key markets, Europe, the United States of America, Russia and other markets. In the past ten years there has been considerable growth in the demand for salmon especially in Europe, which is considered to be a mature market. The market has been growing by 7% per annum each year for the past ten years. The Russian market for salmon is growing at 27% per annum. This growth and success story has continued in the first quarter of 2012. Considerable demand is developing for farmed salmon. The current size of the farmed salmon market is 2 million tonnes. In the coming seven or eight years it is estimated that the world will need an additional 1 million tonnes. We see this as a huge market-led opportunity.
The next slide shows world production at present. The various colours paint a rather depressing story from an Irish perspective. Norway leads the way and it has now broken through the 1 million tonne barrier. Scotland has produces approximately 160,000 tonnes and Chile will probably hit approximately 350,000 tonnes soon. Ireland is flat-lining at 15,000 tonnes per annum. This is shown by the green line at the bottom of the graph. Although there has been huge growth in the market demand and there is vast potential in the market in future, our farmed salmon industry has stagnated for the past decade while other sectors, especially elsewhere in Europe, have grown significantly.
The Minister, Deputy Coveney, has examined the matter closely and has taken this initiative with BIM to introduce what he is rightly terming a "game changer". The game changer is to try to get Irish salmon production on the global map and to try to ensure Ireland is competitive at an international level. The plan is to develop large scale salmon farms in remote and exposed locations off the Irish coast. We have the perfect environment for growing fish. The gulf stream and the environment in general are conducive to farmed fish as well as wild capture fish. We have the most productive fishing grounds and, consequently, the most productive farm fishing grounds, in Europe. The new approach involves BIM working with our colleagues in the Marine Institute to explore suitable locations along the Irish coast to develop farmed salmon production. To date our organisation has engaged in extensive public consultation prior to the licence application and as part of the environmental impact assessment process. We have developed a comprehensive environmental impact statement.
We recently applied to the Minister for a production licence. If we are successful in obtaining it we will hold it in trust for the State and then franchise it to a suitable commercial operator through a legally binding contract. This is completely different to what was undertaken historically in the aquaculture sector. The idea of a State organisation retaining and holding a licence is a new initiative and we believe it will have a very successful outcome.
Every one of the sites we propose will generate 15,000 tonnes of organic farmed salmon per annum. Even though the market for salmon is approximately 2 million tonnes per annum, the Irish production of 15,000 tonnes, approximately 90% of which is organic, enables us to position our product in a very profitable, high end niche segment in the marketplace. We can cannot compete on a commodity level because we do not have the scale. It is intended to increase organic production on the first site by 15,000 tonnes. Currently, that would have a market value of €100 million per annum, primarily for export. The total job creation potential for just one site is 500, 350 of which would be involved in production and processing and 150 would be directly employed.
All of those figures are fully verifiable on the basis of the existing production facilities we have. We are confident if we are successful in obtaining this license those figures are attainable. In terms of progress to date, one site off the Aran Islands in Galway Bay is under investigation. We have applied for a licence. We are currently looking at a second site off the Mayo coast and technical work should commence there in the next week to ten days. A third site in Donegal will be considered in 2012.
The presentation contains some images for those not familiar with salmon farming. They demonstrate that salmon farming is like an iceberg, where there is very little to be seen above the surface and the majority of work takes place below it. In terms of organic salmon farming, approximately 1% of what is in the cages is fish and 99% is water. There is a small concentration of fishing cages which is critical for us to obtain organic certification.
I want to focus on the Galway site, explain the type of work we have undertaken and the systematic process of elimination to arrive at the site. We put a grid map over the Aran Islands in Galway Bay which coverage 350 sq. km. Each of the boxes on the grid map in the presentation relates to 2.2 sq. km. We went through each square systematically to determine which were the most appropriate for growing salmon. We created a grid and scored each square along various criteria. We had to examine Natura and SAC areas and make sure they were not protected by SAC designation or future designation.
The physical characteristics were extremely important. We had to examine temperature, salinity and oxygen. We had to consider wave climate and whether it was possible to locate cages in a particular area. We used data. We have what is considered to be a very successful offshore farm operating Mayo for the past 20 years. It is the most exposed salmon farm in Europe. BIM established it 20 years ago and it has been operated by Marine Harvest for the past ten years. It is an Irish subsidiary of a Norwegian plc. It operates very successfully and the islanders in Clare Ireland derive a huge amount of employment and income from the facility.
We have done a lot of the baseline work and assessment based on what has already worked successfully. The wave climate could not, in any way, shape or form, be any more difficult or extreme than the climate we have experienced for ten years in Clare Island. That was the benchmark. We went through the data and examined 350 sq. km. We have been working with fishermen since 1952. We had to have a clear and solid understanding of what would impact on the fishing community.
We had extensive meetings with fishermen on an individual and collective basis in our offices in Galway. We met every fisherman operating in Galway Bay. We went to Rossaveal and met all of the co-operative members there. We met all of the islanders at several meetings on each of the islands as part of this process. We met the local community council in Rossaveal and had extensive consultation with it. It needs to be part of the process. All of this took place prior to completing the EIS. Their considerations were extremely important in advance of our making any decision. Community buy-in is critical to the process and will continue to be so.
The committee can see that the systematic evaluation of the site included a Natura 2000 Aran Islands area which we could not go near. It is highlighted in white in the presentation. We examined the ferry traffic for July 2010, which was the busiest year. Ferry traffic from the various islands from the Clare coast and Galway mainland posed an obvious threat and we could not go near them.
We examined the satellite monitoring for vessels over 15 m. Every vessel over 50 m is obliged to carry a satellite monitoring device on board. We analysed three years' worth of data to determine where fishermen were fishing and where the most important facing grains were. We had to avoid, at all cost, those fishing grounds. We did extensive work with colleagues in the Marine Institute using its technology on the smart bay project in Galway Bay to determine wave height and the worst possibility from a storm prospectus to ensure the physical characteristics of the site were not excessive and were capable of holding salmon cages.
When we put everything together, the 350 sq. km area was narrowed down to a very small area. In the presentation two boxes on the map can be clearly seen. We believe they are suitable for salmon farming in the facility. They are biologically discreet production areas, which is in accordance with the best management practice around the world to ensure there is no possibility of cross-contamination between the two sites.
The actual footprint is considerably smaller. While a reasonably large area can potentially be licensed for salmon growing, the physical cages will take up a much smaller area and the moorings will be slightly larger than the cages. It will be a tightly defined area within Galway Bay. We have done a lot of work on whether the cages will have a visual impact. The second last slide demonstrates that from a departmental perspective there is a 4 km rule. This means the cages cannot be visible for 4 km from any fixed point. We have drawn 4 km circles around the cages to demonstrate that. This demonstrates that on a northerly site in Galway Bay it cannot be seen from any fixed point location on land. On the southerly site and in particular, the southerly element of the southerly site, these cages can be seen from a point in Inis Oírr. We carried out extensive mapping by placing big regatta buoys out there and we took a lot of photographs and carried out a visual impact assessment. We showed this to the local community and we are quite satisfied that there is a very low visible impact on this particular site.
In the next ten days we are beginning work on site number two off the Mayo coast. We have submitted our licence application for the Galway site and we hope a licensing decision will be made in the coming months. From our perspective we hope the decision will be favourable. In parallel, we are seeking suitable investors. I made a presentation at an investor conference in Norway last month which was attended by 560 seafood investors from 35 countries. Norway is at a completely different level to Ireland in its seafood sector development with a total of 17 seafood private limited corporations, PLCs, on the Norwegian Stock Exchange with sales of €4.3 billion last year. It is a very significant business in Norway.
BIM is happy to report that there are currently 15 serious expressions of interest in investing in this venture. Over the coming months we intend short-listing those investors and it is hoped to go to tender to contract a successful commercial operator in the next number of months, certainly before the end of the year. This is a very exciting opportunity. This project has a number of key characteristics. It is the first time the State has collaborated to the extent that we are now in a position to apply for a licence. It is the first time a semi-State organisation will retain a licence on behalf of the State. This is a great market opportunity and this will be filled by some member state or by the Norwegians or by Chile unless we act quickly. There are very few demand curves such as described in the submission to the committee for any protein product. The demand is phenomenal and it will only grow. In the present economic climate, BIM believes that there is a fantastic market opportunity to generate real jobs and employment and exports in coastal regions where there are few, if any, economic alternatives. We are very pleased with the progress on the project within a very short timeframe. We are very pleased with the level of support from the local communities. I acknowledge there are concerns but BIM is endeavouring to address those concerns in whatever manner possible. We are very confident, considering the level of interest shown by investors who may invest in this project and we believe there will be significant competition for this asset and for the franchise of this asset should we be successful in our licence application. I thank the Chairman and the committee members for this opportunity to make this presentation and I am happy to take any questions.