NZ King Salmon finally gets green light to build its salmon farm Blue Endeavour in the Cook Strait

What NZ King Salmon's open ocean project would look like.

It has taken nine years, but NZ King Salmon has finally achieved resource consent to build its salmon farm - Blue Endeavour - in Cook Strait.

The NZX-listed company said it had won final Government approval to proceed with the project, which it says will be a New Zealand first.

It will also be a world first in farming the king salmon species, also known as Chinook, in the open ocean, where conditions are cooler and more conducive for growth.

NZ King Salmon chief executive Carl Carrington said it had been a “very robust” process to gain Fisheries NZ approval and to find common ground with, iwi, non-government organisations, and the community.

The company will now complete its 18-month programme of seabed, seabird and marine mammal monitoring.

The next step will be a “proof-of-concept” phase, which will mean the installation of trial pens from June 2025.

The company will then start with a small-scale pilot farm.

“We will dip our toes into the open ocean, to carefully realise Blue Endeavour’s potential, while continuing to talk to local communities, iwi and others who also have key interests, rights and values around the ocean,” he said.

Blue Endeavour, when fully operational, could generate $300 million in new revenue a year, Carrington said.

Grant Lovell, the company’s general manager of aquaculture, said the open ocean was the next logical step for New Zealand’s aquaculture industry.

“When we look to the open ocean we are looking at the future for salmon farming in New Zealand – in cooler, deeper waters,” he said.

In Cook Strait - 7km off Cape Lambert - the company will be working in a hostile environment, with waves up to 10 metres and very strong currents.

The farm, 7km off Cape Lambert, will require 54 anchors, weighing 3 tonnes apiece.

It will comprise two blocks of 10 circular pens and the total farm will be less than 12 surface hectares in size.

When operational, Blue Endeavour will have the capacity to produce 10,000 tonnes of salmon.

NZ King Salmon has farmed salmon for more than 35 years in the Marlborough Sounds, and with nursery, hatchery and processing land-based operations in Nelson, Tākaka and Canterbury.

The 2022 year was a disaster after warmer-than-normal weather caused a mass fish mortality event at its inner Marlborough Sounds farms, plunging the company into a $73.2m annual loss.

As Carrington puts it, the company “really blew up” as a result of the 20 million fish deaths that year, but it has been recovering ever since.

Last year, NZ King Salmon reported a six-month profit of $10.6m, against a $24.5m loss in the previous corresponding period.

At the time, the company issued an earnings guidance range of $23.5m - $27.5m Ebitda for the January 2024 year.

The past two years have seen the company concentrate its efforts at its facilities in the cooler Tory Channel, where 95 per cent of its fish are now grown, away from its warmer sites in Queen Charlotte and Pelorus Sounds.

“It’s worked for two summers in a row, and we need to consistently do that for the third and fourth time to help bring back market confidence,” he told the Herald.

In addition, NZ King Salmon has for years been working on “thermo-tolerance” - breeding fish that can withstand warmer temperatures.

From 2026 the company could be getting zero to 500 tonnes of fish from Blue Endeavour.

Carrington said the company was working on costs and plans to release details on how it would be funded when it reports its annual result later this month.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.