Industry Research Report - Scottish Salmon Producers' Organisation
Industry Research Report - Scottish Salmon Producers' Organisation
Industry Research Report - Scottish Salmon Producers' Organisation
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
<strong>Scottish</strong> <strong>Salmon</strong> Farming<br />
<strong>Industry</strong> <strong>Research</strong> <strong>Report</strong><br />
April 2012<br />
<strong>Scottish</strong> <strong>Salmon</strong> Producers’ <strong>Organisation</strong> Limited, Durn, Isla Road, Perth PH2 7HG Tel: 01738 587 000, Fax: 01738 621 454<br />
Email: enquiries@scottishsalmon.co.uk Web: www.scottishsalmon.co.uk
Contents<br />
Chairman’s<br />
Foreword<br />
Chairman’s Foreword 1<br />
Chief Executive’s Overview 2<br />
Health & Welfare View 3<br />
Background and Objective 4<br />
Case Study: Argyll & Bute 5<br />
Methodology and Sample 6<br />
Case Study: Highland 7<br />
Main Findings: <strong>Salmon</strong> Business Confidence Survey 8<br />
Main Findings: Employment by SSPO Member Companies 10<br />
Main Findings: Travel to Work 11<br />
Main Findings: Average Years with Companies 11<br />
Main Findings: Origin of Workforce 11<br />
Main Findings: Financial Contribution to Communities 12<br />
Main Findings: Levels of Capital Investment 14<br />
Main Findings: Expenditure on Suppliers and Services 16<br />
Case Study: Orkney 17<br />
Case Study: Shetland 18<br />
Overseas Development View 19<br />
Case Study: Western Isles 20<br />
<strong>Scottish</strong> farmed<br />
salmon and<br />
salmon products<br />
are internationally<br />
recognised as the<br />
premium product<br />
in their class<br />
As Scotland deals with the realities of the global economic downturn, erudite<br />
economists – always men with perfect hindsight – have a new mantra of<br />
‘a balanced economy’. In plain man’s terms this means creating the essential mix<br />
of primary production, manufacturing and service industries that will provide for<br />
economic stability even in difficult times.<br />
Scotland has relatively few world class industries, but its salmon farming is in that<br />
category. We will never be the largest salmon producer or the lowest cost. Norway<br />
and Chile are ahead of us in scale; and by international standards our farm sizes<br />
are small and our commitment to high standards of husbandry and management<br />
incurs added costs. But Scotland seeks to produce the best and we are immensely<br />
proud of our history and tradition. <strong>Scottish</strong> farmed salmon and salmon products<br />
are internationally recognised as the premium product in their class; they are<br />
always in-demand at home, and in countries across the world.<br />
Again this year, in this report, we have provided key facts about our industry, both<br />
for the interest of the communities in which we farm and for a wider audience.<br />
The figures will speak for themselves; but the creation of 506 jobs over the last<br />
three years and the capital investment of £205 million in farms and processing<br />
are points of note. The vast majority of capital investment has been in the<br />
Highlands and Islands: Shetland (33.5%), Argyll & Bute (17%), Highland (23%),<br />
Western Isles (15%) and Orkney (4.5%). However, with recent new planning<br />
applications and permissions in Orkney, investment there is set to rise.<br />
Under Scotland’s National Marine Plan, farmed fish production will increase<br />
steadily year on year, to give an overall increase of 50% by 2020. This plan is<br />
fully achievable subject only to continued careful planning and to investors’<br />
confidence in Scotland. The first of these can be virtually assured. But, with a<br />
major Aquaculture and Fisheries Bill proposed for later this year, we trust policy<br />
makers will avoid measures, which may threaten our competitive position in the<br />
investment market. As part of a ‘balanced economy’ there’s nothing better or<br />
more future-looking than <strong>Scottish</strong> salmon farming!<br />
Professor Phil Thomas<br />
Chairman, <strong>Scottish</strong> <strong>Salmon</strong> Producers’ <strong>Organisation</strong><br />
1
Chief Executive’s<br />
Overview<br />
Health and<br />
Welfare View<br />
I am pleased to report that this new official data demonstrates the expanding<br />
economic contribution by Scotland’s salmon farmers.<br />
Direct employment within SSPO member companies has increased again, with<br />
an impressive 272 jobs created since the previous research findings (December<br />
2010). The 13% increase in direct employment has contributed to a 23% growth<br />
in the total gross pay, which has risen to £53.7 million.<br />
With many businesses well-placed to increase capital expenditure spending,<br />
a record £47.6 million was invested during 2011. Almost all of the capital<br />
investments were made in the Highlands and Islands, with the vast majority<br />
injected into Shetland, Argyll & Bute, Highland, Western Isles and Orkney.<br />
This reflects the positive impact of production increasing to its highest level in<br />
six years, the value of the total output soaring by 30% and accelerating export<br />
growth which is now at record levels.<br />
Against this backdrop confidence has grown somewhat, with 86% of SSPO member<br />
companies planning to both increase staff and grow production sustainably over<br />
the next five years.<br />
Despite the global economy continuing to struggle to make a recovery, the market<br />
conditions for superior <strong>Scottish</strong> salmon at home and abroad remain very strong.<br />
With the positive impact of business confidence and strong investment from the<br />
salmon sector, I expect the market conditions for our sector to remain positive.<br />
However, I concur with the Chairman’s caution that any unintended consequences<br />
arising from the proposed Aquaculture and Fisheries Bill would quickly undermine<br />
confidence levels, potentially resulting in a significant loss of job creation and<br />
investment in the Highlands and Islands. We must all work together to maintain<br />
a confident industry.<br />
2<br />
Scott Landsburgh<br />
Chief Executive, <strong>Scottish</strong> <strong>Salmon</strong> Producers’ <strong>Organisation</strong><br />
86% of SSPO member companies<br />
are planning to both increase staff<br />
and grow production sustainably<br />
over the next five years<br />
Since the RSPCA<br />
launched the<br />
welfare standards<br />
for farmed<br />
Atlantic salmon<br />
nine years ago,<br />
between 60% and<br />
70% of <strong>Scottish</strong><br />
salmon in<br />
seawater are<br />
Freedom Food<br />
approved<br />
Freedom Food, the RSPCA’s farm animal welfare and food labelling scheme,<br />
was launched in 1994 with a simple remit – to bring RSPCA welfare standards<br />
to as many farmed animals as possible.<br />
Participants are subject to annual assessment from our highly trained assessors<br />
and subject to monitoring visits from RSPCA Farm Livestock Officers. This dual<br />
level of checks makes Freedom Food, in my opinion, the most robust of all the<br />
assurance schemes.<br />
After 16 years, we now have over 75 million[1] terrestrial farmed animals in the<br />
scheme, including 28%[2] of all UK pig production, 36% of duck production and<br />
the vast majority of UK cage free egg production.<br />
Perhaps the area where progress has been most satisfying is our work with<br />
<strong>Scottish</strong> salmon producers. Since the RSPCA launched the first ever welfare<br />
standards for farmed Atlantic salmon nine years ago, between 60% and 70%<br />
of <strong>Scottish</strong> salmon in seawater at any given time are Freedom Food approved.<br />
Farming to RSPCA welfare standards has measurable commercial benefits such<br />
as improvements in fish health and bio-security, reduction in mortality and an<br />
increase in operational efficiency. In transport – also covered by RSPCA welfare<br />
standards – positive welfare input results in significant improvements in flesh<br />
quality and shelf life.<br />
Freedom Food labelled smoked and fresh salmon is now sold in many of the UK’s<br />
major grocery retail outlets, including The Co-operative, Somerfield, Morrisons,<br />
Sainsbury’s, Tesco, Booths and many independents. In addition, Marks & Spencer<br />
source their <strong>Scottish</strong> salmon from Freedom Food approved farms.<br />
Despite the economic climate, research shows there is no drop off in consumer<br />
interest in ethical food. A recent Institute of Grocer Distribution report (July 2011)<br />
shows the trend for higher welfare food continues, with twice as many shoppers<br />
in the UK claiming to have bought a higher welfare product, such as Freedom<br />
Food, over the past four years. All the signs are that the welfare of animals is<br />
now considered to be a ‘quality’ attribute.<br />
As we move towards our 10th year of working with the salmon industry, I am<br />
hopeful that demand for higher welfare salmon will continue to grow, as well as<br />
continue to deliver a real competitive advantage to <strong>Scottish</strong> salmon producers<br />
who are members of Freedom Food.<br />
Leigh Grant<br />
Chief Executive Officer, Freedom Food<br />
[1] All Freedom Food animal number figures quoted correct as at end 2011<br />
[2] Freedom Food market penetration has been calculated against Defra farm census 2008<br />
3
Background and<br />
Objective<br />
Case Study<br />
The <strong>Scottish</strong><br />
Government is<br />
confident that in<br />
the coming years<br />
we can continue<br />
to see managed<br />
and sustainable<br />
growth in the<br />
sector, while<br />
ensuring high<br />
environmental<br />
and fish health<br />
standards<br />
Stuart Stevenson MSP,<br />
Environment Minister commenting<br />
on the publication of the <strong>Scottish</strong><br />
Fish Farm Production Survey,<br />
November 2011<br />
Global population growth and a rise in the average consumption per person<br />
are driving the increasing appetite for seafood. The rise in demand is not being<br />
supported by the state of the world’s fisheries stocks, which have little capacity<br />
to improve sustainable yields.<br />
The percentage of seafood derived from aquaculture has increased significantly<br />
over the last 30 years. Fish and shellfish farming produced only 9% of seafood<br />
in 1980, but now it provides almost half of global supply.[1]<br />
With this proportion predicted to increase and political support within Europe<br />
for the sustainable development of the sector,[2] it is encouraging to report that<br />
production in Scotland has increased three years in a row.[3]<br />
Scotland’s salmon industry is in buoyant mood. Increased production, improved<br />
knowledge, adoption of higher welfare standards and major capital investments<br />
have been key determinants of growth, jobs and added value creation over<br />
the last year.<br />
Encouraged by the rising market demand for nutritious, superior and sustainable<br />
<strong>Scottish</strong> salmon, the industry has outlined a strategic plan to achieve annual<br />
production of 210,000 tonnes by 2020.<br />
This research outlines the increasing economic importance of the sector and<br />
promotes the continued need to prioritise sustainable economic development.<br />
ARGYLL & BUTE<br />
• The direct employment provided by members of SSPO has risen from 321 in<br />
2008 to 489<br />
• 67 new jobs were created in the last year<br />
• The increase in direct employment represents a 17% rise on the previous year<br />
• On average, employees remain with their employer for nine years<br />
• Over the last five years SSPO member companies have made £35.7 million<br />
capital investments<br />
• 17% of capital investments between 2006 and 2011 in the whole of Scotland<br />
were made in Argyll & Bute<br />
• Gross pay has increased year-on-year, rising from £3.7 million in 2007 to<br />
£10.3 million<br />
• During the last five years £41.3 million local wage payments have generated<br />
over £189 million of economic benefits as money earned locally is spent locally<br />
Capital Investment between 2006 and 2011<br />
2006<br />
£3,943,507<br />
2007<br />
£6,486,503<br />
2008<br />
£12,193,103<br />
2009<br />
£3,895,962<br />
2010<br />
£4,812,305<br />
2011<br />
£4,358,618<br />
TOTAL £35,689,998<br />
FINANCIAL CONTRIBUTION<br />
TO COMMUNITY<br />
• Gross Pay £10,313,986<br />
• Multiplied Income £47,238,057<br />
• Increase 5%<br />
4<br />
[1] The State of World Fisheries and Aquaculture, published by the UN FAO, http://www.fao.org<br />
[2] Strategy for the Sustainable Development of European Aquaculture, 2009<br />
[3] <strong>Scottish</strong> Fish Farms Annual Production Survey 2010, published by the <strong>Scottish</strong> Government, November 2011<br />
45
Methodology<br />
and Sample<br />
Case Study<br />
98%<br />
OF SALMON<br />
PRODUCTION<br />
PARTICIPATED IN<br />
THE RESEARCH<br />
The research was conducted by means of a self-completion questionnaire created<br />
by <strong>Scottish</strong> <strong>Salmon</strong> Producers’ <strong>Organisation</strong> (SSPO).<br />
With an increasing membership during 2011, SSPO now represents 98% of<br />
salmon production, the research continues to be the most authoritative measure<br />
of the economic contribution made by Scotland’s salmon farmers. The SSPO<br />
membership comprises:<br />
• Finfish Ltd<br />
• Grieg Seafood Hjaltland UK Ltd<br />
• Highland <strong>Salmon</strong><br />
• Landcatch Natural Selection<br />
• Howietoun Fishery<br />
• Loch Duart Ltd<br />
• Marine Harvest (Scotland) Ltd • Meridian <strong>Salmon</strong><br />
• Migdale Smolt<br />
• <strong>Scottish</strong> <strong>Salmon</strong> Company<br />
• <strong>Scottish</strong> Sea Farms Ltd<br />
• Torridon Smolts<br />
• Uyeasound <strong>Salmon</strong> Company • Wester Ross <strong>Salmon</strong><br />
The data was gathered at the end of 2011. Details of individual firms’ responses<br />
remain confidential and results are reported in aggregate form.<br />
HIGHLAND<br />
•The direct employment provided by members of SSPO has risen from 525 in<br />
2008 to 680<br />
• 90 new jobs were created in the last year<br />
• The increase in direct employment represents a 15% rise on the previous year<br />
• On average, employees remain with their employer for eight years<br />
• Over the last five financial years SSPO member companies have made capital<br />
investments in excess of £47.5 million<br />
• Capital investment has increased year-on-year, with £15.4 million made in 2011<br />
• 23% of capital investments between 2006 and 2011 in the whole of Scotland<br />
were made in Highland<br />
• Gross pay has increased year-on-year, rising from £11.7 million in 2007 to<br />
£17.8 million in 2011<br />
•During the last five years £72 million local wage payments have generated<br />
£330 million of economic benefits as money earned locally is spent locally<br />
Capital Investment between 2006 and 2011<br />
2006<br />
£4,366,657<br />
2008<br />
£5,704,516<br />
2010<br />
£8,879,477<br />
2007<br />
£5,132,798 2009<br />
£8,030,500<br />
2011<br />
£15,417,364<br />
TOTAL £47,531,312<br />
FINANCIAL CONTRIBUTION<br />
TO COMMUNITY<br />
• Gross Pay £17,861,816<br />
• Multiplied Income £81,807,117<br />
• Increase 35%<br />
6<br />
7
Main Findings<br />
86%<br />
OF SSPO<br />
COMPANIES PLAN TO<br />
INCREASE STAFF OVER<br />
THE NEXT FIVE YEARS<br />
The third<br />
successive<br />
annual increase<br />
in production,<br />
a rise in direct<br />
employment<br />
and the increase<br />
in value is great<br />
news for rural<br />
economies and the<br />
<strong>Scottish</strong> economy<br />
as a whole<br />
Scott Landsburgh<br />
Chief Executive, <strong>Scottish</strong> <strong>Salmon</strong><br />
Producers’ <strong>Organisation</strong><br />
<strong>Salmon</strong> Business Confidence Survey<br />
This is the second annual business confidence survey undertaken by SSPO.<br />
It is an authoritative insight into the health of the sector and the mindset of senior<br />
management running salmon farming businesses in Scotland. The survey covers<br />
14 companies representing 98% of <strong>Scottish</strong> salmon production.<br />
With salmon production increasing to its highest level in six years, the value of<br />
the total output soaring by 30%, a rise in direct employment by 13% during this<br />
reporting period and export growth continuing to reach new records since the<br />
last survey (December 2010), the already high business confidence levels in the<br />
salmon sector have risen further and run counter to the much reported erosion<br />
of business confidence in other sectors.<br />
As demand at home and abroad for responsibly farmed, superior salmon<br />
remained high during 2011, the market conditions remain favourable for growth.<br />
With this in mind, 86% of SSPO member companies have expressed a desire to<br />
grow sustainably over the next five years. This represents a 14% increase when<br />
compared with the previous year.<br />
With the health of the sector continuing the previously reported upward trend, an<br />
increasing percentage of SSPO member companies plan to increase staff over the<br />
next five years. With lively public discussion continuing around the prospects of a<br />
slowing UK economy and the risk of a double dip recession, an unprecedented<br />
86% of salmon companies are planning to increase employment levels.<br />
Chart Chart 1: What 1: What are are your your plans plans for for the the<br />
next next five five years years<br />
14%<br />
86%<br />
Business Expansion<br />
Keep Keep Business at Present at Level Level<br />
Chart Chart 2: In 2: terms In terms of staffing of levels levels over over<br />
the the next next five five years years what what do do you you plan plan<br />
to do to do<br />
14%<br />
86%<br />
Increase Staff Staff<br />
Remain at Present at Staff Staff Levels Levels<br />
In Highland<br />
90 new jobs<br />
were created<br />
in the last year<br />
8 9
Main Findings<br />
Main Findings<br />
272<br />
NEW JOBS<br />
CREATED<br />
IN THE LAST YEAR<br />
SSPO Member Company Employees<br />
by Local Authority Region<br />
Employment by SSPO Member Companies<br />
Direct employment provided by members of <strong>Scottish</strong> <strong>Salmon</strong> Producers’<br />
<strong>Organisation</strong>, inclusive of farming, processing, sales and marketing, logistics,<br />
finance and environmental management, has increased for the second year<br />
in a row.<br />
An impressive 272 new jobs have been created since the previous survey.<br />
With 2,124 direct employees, this represents an increase of 13% on the previous<br />
reporting period. 90% of the jobs are on a full time basis.<br />
The majority of employees continue to be located in the Highlands and Islands,<br />
with 1,939 (91%) based in Argyll & Bute, Highland, Orkney, Shetland and the<br />
Western Isles. The vast majority of the jobs created (229 new jobs) have also<br />
been located in these five local authority regions.<br />
However, there has also been an increase in employment outwith the Highlands<br />
and Islands as 43 jobs were created in other regions during the last reporting<br />
period. The geographical split of direct jobs provided by SSPO members is<br />
shown in Table 1.<br />
With 2,124 direct<br />
employees, this<br />
represents an<br />
increase of 13%<br />
on the previous<br />
reporting period<br />
Travel to Work<br />
On a national basis 70% of all the employees lived within 10 miles of their place<br />
of work. 86% lived within 20 miles. With the majority of employees living and<br />
working in local communities, the money earned locally is spent locally,<br />
contributing to the wealth and sustainability of local communities.<br />
Average Years of Employment with Companies<br />
The average number of years that employees stay with companies remains high<br />
when compared with the UK average: the industry-wide average is 8.3 years;<br />
the average tenure in the Highlands and Islands is marginally higher at 8.5 years.<br />
Origin of Workforce<br />
Of the 2,124 jobs in SSPO member companies some 289 (14%) were held by<br />
non-UK citizens.<br />
Western Isles<br />
264<br />
Shetland<br />
415<br />
Orkney<br />
91<br />
Highland<br />
680<br />
Table 1 – SSPO Member Company Employees by Local Authority Region<br />
Local Authority Region Number of direct employees % increase on<br />
in SSPO member companies previous year<br />
Highland 680 +15%<br />
Argyll & Bute 489 +17%<br />
Western Isles 264 +17%<br />
Stirling 44 +28%<br />
Dumfries and Galloway 13 -7%<br />
Shetland 415 +5%<br />
Orkney 91 +18%<br />
North Ayrshire 1 -83%<br />
Other 127 +48%<br />
TOTAL 2,124 +13%<br />
Argyll & Bute<br />
489<br />
The vast majority of jobs created have<br />
been in the Highlands and Islands<br />
10<br />
11
Main Findings<br />
Main Findings<br />
83%<br />
increase in value to<br />
the HighlandS<br />
and islands<br />
communities over<br />
the last Five years<br />
Financial Contribution to Communities<br />
The direct economic impact of the salmon farming sector has increased by 23%<br />
as total gross pay from SSPO member companies rose to £53.7 million.<br />
The vast majority of the total gross pay continues to be paid to employees in the<br />
Highlands and Islands. £46.7 million, representing 92% of the total gross salaries,<br />
was paid to employees in remote, rural communities. The total gross pay in the<br />
Highlands and Islands also increased by 21% (£8 million) when compared with<br />
the previous survey.<br />
When compared with the first survey of this kind undertaken by SSPO (2006/7)<br />
the total gross pay represents a massive 90% increase. Over the last five years<br />
the total gross pay has almost doubled, increasing from £28.1 million to<br />
£53.7 million.<br />
When the <strong>Scottish</strong> Government’s income multiplier is applied, every £1 that<br />
is paid to employees in the fish farming sector in the Highlands and Islands is<br />
estimated to generate a further £4.58 in the local economy.<br />
The economic benefits generated by the £46.7 million local wage payments<br />
in the Highlands and Islands and the income multiplier totalled £214 million.<br />
This represents a 83% increase when compared with 2006/7.<br />
Table 2 provides national and regional breakdowns of the gross pay alongside<br />
multiplied income. Table 3 illustrates the increasing contribution from SSPO<br />
member companies to the <strong>Scottish</strong> economy.<br />
£214<br />
MILLION of benefits<br />
from direct salaries<br />
is injected into<br />
the highlands<br />
and islands<br />
Multiplied Income by Region in 2010/11<br />
Western Isles<br />
£27.9 million<br />
Orkney<br />
£9.3 million<br />
Highland<br />
£81.8 million<br />
Shetland<br />
£47.7 million<br />
The total gross<br />
pay has increased<br />
by a massive 90%<br />
between 2006<br />
and 2011<br />
Table 2 – National and Regional Breakdowns of Gross Pay and Multiplied Income<br />
Local Authority Region Gross Pay £<br />
Multiplied<br />
Income<br />
% Increase<br />
Highland £17,861,816 £81,807,117 35%<br />
Argyll & Bute £10,313,986 £47,238,057 5%<br />
Western Isles £6,098,939 £27,933,141 36%<br />
Shetland £10,429,441 £47,776,840 11%<br />
Orkney £2,031,778 £9,305,544 16%<br />
Rest of UK £6,941,561 45%<br />
TOTAL £53,677,521 23%<br />
Gross salary data is up to the end of the financial year in April 2011.<br />
Over the last<br />
five years the total<br />
gross pay from<br />
SSPO member<br />
companies has<br />
increased from<br />
£28.1 million to<br />
£53.7 million<br />
Argyll & Bute<br />
£47.2 million<br />
Table 3 – Increasing Economic Contribution from SSPO Member Companies<br />
Year Gross Pay £<br />
2006/07 £28,177,945<br />
2008 £36,195,889<br />
2009 £43,547,149<br />
2010/11 £53,677,521<br />
The gross pay is up to the end of the financial year in April 2011. As there is a<br />
small percentage of tonnage outside of SSPO membership, the economic benefits<br />
of the whole of the industry will be even greater.<br />
12<br />
13
Main Findings<br />
£205<br />
MILLION<br />
CAPITAL INVESTMENT<br />
BETWEEN<br />
2006 AND 2011<br />
Levels of Capital Investment<br />
The pace of capital investment in the salmon sector increased dramatically during<br />
2010 and 2011. With export growth accelerating, reflecting the increasing market<br />
demand and competitive level of sterling, many companies have been well placed<br />
to increase investment spending.<br />
Two successive record years of investment have been achieved, with £44.4 million<br />
and £47.6 million invested by SSPO member companies in 2010 and 2011<br />
respectively as businesses increased the capital investments in remote, rural<br />
economies. The total investment over the last five years is £205.5 million.<br />
Almost all of the £92 million capital investments during the last two years<br />
were made in the Highlands and Islands, with 96% injected into Shetland,<br />
Argyll & Bute, Highland, Western Isles and Orkney.<br />
The vast majority of the £205.5 million capital investments between 2006<br />
and 2011 have been made in the Highlands and Islands: Shetland (33.5%),<br />
Argyll & Bute (17%), Highland (23%), Western Isles (15%) and Orkney (4.5%).<br />
Table 4 highlights capital investments by region over the last five years.<br />
A record £47.6 million<br />
was invested in 2011 as<br />
businesses strengthened<br />
their commitments to the<br />
communities and economies<br />
in which they operate<br />
Table 4 – Capital Investment Between 2006 and 2011<br />
2006 - 09 2010 2011 Regional<br />
Local Authority Region Capital Capital Capital Totals Capital<br />
Investment Investment Investment Investment as %<br />
Highland £23,234,471 £8,879,477 £15,417,364 £47,531,312 23%<br />
Argyll & Bute £26,499,449 £4,812,305 £4,358,618 £35,670,372 17%<br />
Western Isles £8,736,039 £12,561,191 £9,696,439 £30,993,669 15%<br />
Stirling £280,000 £136,276 £210,000 £626,276 0.3%<br />
Dumfries and Galloway £1,805,202 £78,562 £322,000 £2,205,764 1%<br />
Shetland £41,767,167 £14,501,267 £12,768,943 £69,037,377 33.6%<br />
Orkney £4,414,052 £2,524,782 £2,431,000 £9,369,834 4.5%<br />
Rest of UK £427,759 £90,000 £1,927,923 £2,445,682 1.2%<br />
Other £6,348,458 £797,204 £509,000 £7,654,662 4.4%<br />
TOTALS £ £113,512,597 £44,381,064 £47,641,287 £205,534,948<br />
14<br />
15
Main Findings<br />
Case Study<br />
Expenditure on Suppliers and Services<br />
The expenditure on suppliers and services by the salmon sector increased<br />
significantly during 2011, leaping by 22% to £435.7 million. This follows a<br />
24% increase in 2010.<br />
With many supplier businesses reliant on a successful, sustainable and profitable<br />
salmon sector, other key findings during 2011 include:<br />
• Spending in Scotland was over £320 million, an increase of 24%<br />
• Expenditure in the Highlands and Islands was £144 million, an increase of 50%<br />
• Spending in the rest of Scotland was £176 million, an increase of 8%<br />
• Expenditure in the rest of the UK was £76 million, an increase of 8%<br />
• Spending overseas was £40 million, an increase of 38%<br />
Expenditure on suppliers and services from Scotland’s salmon farmers over the<br />
last four years (2008 - 2011) has now injected almost £1.4 billion into suppliers<br />
and services (Table 5). Scotland continues to be the major beneficiary with the<br />
vast majority (74%) of the industry’s annual expenditure on suppliers and services<br />
being made in Scotland (Table 6). This positive supply chain picture contrasts<br />
with the sluggish growth rate in the wider UK economy.<br />
ORKNEY<br />
• The direct employment provided by members of SSPO has risen from 56 in<br />
2008 to 91<br />
• 14 new jobs were created in the last year<br />
• The increase in direct employment represents an 18% rise on the previous year<br />
• On average, employees remain with their employer for six years<br />
• Over the last five years SSPO member companies have made £9.36 million<br />
capital investments<br />
• Nearly £5 million was invested in Orkney in the last two years<br />
• 4.5% of capital investments between 2006 and 2011 were made in Orkney<br />
• Gross pay has risen from under £1 million in 2008 to over £2 million<br />
• During the last five years over £8 million local wage payments have generated<br />
£37 million of economic benefits as money earned locally is spent locally<br />
Capital Investment between 2006 and 2011<br />
Table 5 – Expenditure on Suppliers and Services 2008 -2011<br />
2008 2009<br />
2010<br />
2011<br />
TOTAL<br />
2006<br />
£496,405<br />
2007<br />
£1,486,503<br />
2008<br />
£1,094,144<br />
2009<br />
£1,337,000<br />
2010<br />
£2,524,782<br />
2011<br />
£2,431,000<br />
£304,229,283 £296,037,923 £357,931,302 £435,728,223 £1,393,926,731<br />
TOTAL £9,369,834<br />
Table 6 – Expenditure on Suppliers and Services in Scotland only 2008 -2011<br />
Total expenditure in the Highlands and Islands 2008 -2011 £484,339,732<br />
Total expenditure in the rest of Scotland 2008 -2011 £579,197,314<br />
FINANCIAL CONTRIBUTION<br />
TO COMMUNITY<br />
• Gross Pay £2,031,778<br />
• Multiplied Income £9,305,544<br />
• Increase 16%<br />
16<br />
17
Case Study<br />
Overseas<br />
Development View<br />
SHETLAND<br />
• The direct employment provided by members of SSPO is 415<br />
• 20 new jobs were created in the last year<br />
• On average, employees remain with their employer for 12 years<br />
• Over the last five years SSPO member companies have made over £69 million<br />
capital investments<br />
• 33.5% of capital investments between 2006 and 2011 were made in Shetland<br />
• Gross pay has risen from £5.1 million in 2007 to £10.4 million<br />
• During the last five years almost £43.7 million local wage payments have<br />
generated over £200.4 million of economic benefits as money earned locally<br />
is spent locally<br />
Capital Investment between 2006 and 2011<br />
2006<br />
£8,398,631<br />
2007<br />
£14,653,064<br />
2008<br />
£12,325,381<br />
2009<br />
£6,390,091<br />
2010<br />
£14,501,267<br />
2011<br />
£12,768,943<br />
TOTAL £69,037,377<br />
<strong>Scottish</strong><br />
Development<br />
International is<br />
wholly committed<br />
to supporting the<br />
salmon industry’s<br />
development in<br />
overseas markets<br />
Food exports from Scotland reached record levels in 2010, breaking the £1 billion<br />
barrier for the first time. Early indications for the last 12 months are that 2011<br />
has been another great year.<br />
The seafood sector was the single largest contributor to food exports in 2010,<br />
with international sales hitting £620 million, representing an annual value growth<br />
of 12%.<br />
Thanks to an increasing global appreciation for the product’s premium taste<br />
and quality, fresh salmon from Argyll & Bute, Highland, Western Isles, Orkney<br />
and Shetland enjoyed a 20% increase in export volumes. With high demand<br />
in many of the world’s major cities, from Paris to New York, through to Dubai<br />
and Shanghai, seven of the top 10 export markets grew in volume.<br />
With worldwide demand for fish from aquaculture growing fast and an increasing<br />
reputation for producing high quality products, Scotland is well placed to meet<br />
rising demand across established markets, such as the USA and France, as well<br />
as emerging markets, such as the Middle East, Russia and China.<br />
<strong>Scottish</strong> Development International is wholly committed to supporting the<br />
salmon industry’s development in overseas markets and to helping to deliver<br />
the <strong>Scottish</strong> Government’s ambitious target to deliver a 50% increase in exports<br />
by 2017.<br />
In Europe, the Middle East and North America, for example, we are focussed<br />
on building and strengthening links between producers and buyers for the<br />
luxury retail and catering sectors.<br />
Perhaps the greatest opportunity for expediting export performance is in Far East<br />
markets, as outlined in The Scotland Food & Drink Strategy for Asia, launched<br />
by the First Minister while on a visit to China in December 2011. The strategy<br />
aims to help provide <strong>Scottish</strong> food and drink companies with the resources,<br />
knowledge and networks to develop significant sales in the Asia Pacific region.<br />
With a supportive Government, collaborative effort across the industry and an<br />
ambitious company base, there is no doubt that sales of <strong>Scottish</strong> salmon will<br />
continue to enjoy sustained growth.<br />
Anne MacColl<br />
Chief Executive, <strong>Scottish</strong> Development International<br />
FINANCIAL CONTRIBUTION<br />
TO COMMUNITY<br />
• Gross Pay £10,429,441<br />
• Multiplied Income £47,766,840<br />
• Increase 11%<br />
18<br />
19
Case Study<br />
WESTERN ISLES<br />
• The direct employment provided by members of SSPO has risen from 163 in<br />
2008 to 264<br />
• 38 new jobs were created in the last year<br />
• The increase in direct employment represents a 17% rise on the previous year<br />
• On average, employees remain with their employer for 7.5 years<br />
• Over the last five years SSPO member companies have made almost £31 million<br />
capital investments<br />
• £22.2 million was invested in the Western Isles in the last two years<br />
• 15% of capital investments between 2006 and 2011 in the whole of Scotland<br />
were made in Western Isles<br />
• Gross pay has risen from £3.4 million in 2007 to £6.1 million<br />
• During the last three years £21.5 million local wage payments have generated<br />
almost £98.8 million of economic benefits as money earned locally is spent locally<br />
Capital Investment between 2006 and 2011<br />
FINANCIAL CONTRIBUTION<br />
TO COMMUNITY<br />
• Gross Pay £6,098,939<br />
• Multiplied Income £27,993,141<br />
• Increase 36%<br />
2006<br />
£1,351,932<br />
2008<br />
£3,004,399<br />
2007<br />
£329,698<br />
2009<br />
£4,050,010<br />
2010<br />
£12,561,191<br />
2011<br />
£9,696,439<br />
TOTAL £30,993,669<br />
Between 2008 and 2011<br />
there has been almost<br />
£1.4 billion expenditure<br />
on suppliers and services<br />
Scott Landsburgh,<br />
Chief Executive, <strong>Scottish</strong> <strong>Salmon</strong> Producers’ <strong>Organisation</strong><br />
20<br />
21