Investors welcome salmon farm king, ecologists worry

STAVANGER, Norway, June 23 (Reuters) From a large, sparsely decorated office overlooking a warehouse and a busy main road, Atle Eide controls a quarter of the world's salmon production.

Just 20 years ago, fish farming was a family-run industry confined to the windswept Scottish and Norwegian coasts.

Now it is a multibillion dollar business spanning the globe and, after a series of takeovers, it has a true market leader Norway's Pan Fish.

''It's one of the most fascinating industries in the world,'' Eide, Pan Fish's chief executive, told Reuters in an interview.

Fascinating, but for all the wrong reasons environmentalists say.

They argue fish farmers produce battery salmon, poison the seabed and destroy wild migratory salmon and other fish stocks.

Investors, though, have been siding with Eide.

Pan Fish's share price has more than tripled this year after the long awaited consolidation of the sector, and the price of fresh salmon has shot up by around 60 per cent in the past 12 months due to strong demand, partly fuelled by bird flu fears.

Pan Fish, with a market value of around 4 billion dollars, jumped from a market share of 5 per cent to 25 per cent in three months by buying rival Marine Harvest from Dutch food group Nutreco for 1.3 billion euros and Norwegian firm Fjord Seafood for about 770 million dollars.

For Eide, the business rationale is simple. Pan Fish is mass producing previously expensive healthy food for a hungry market.

''People want to eat more seafood at the same time as the level of wild catches can't grow, so it has to come from aquaculture (fish farming),'' he said.

BIG BROTHER This year, fish farms will produce around 1.3 million tonnes of salmon, up from around 550,000 tonnes ten years ago, a small amount compared to the world's poultry production but still enough to supply over 8 billion meal portions in a year.

A 45-minute boat ride north from Stavanger, past heavily wooded islands, is a Pan Fish salmon farm run by Trina Danielsen.

Nestling at the entrance to a deep fjord, it looks like a floating warehouse with a grid of 12 underwater cages about half the size of a soccer pitch.

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