HIGHLIGHTS 2018

CHANGES TO OPERATIONS

  • The new vessels Akurey AK and Viðey RE replaced the wetfish trawlers Sturlaugur H. Böðvarsson AK and Ottó N. Þorláksson RE, which went on their last fishing expedition for HB Grandi.
  • Brim hf. purchased all the shares that Vogun hf. owned in HB Grandi and came in as a new principal shareholder.
  • Vilhjálmur Vilhjálmsson left during mid-year and Guðmundur Kristjánsson took over as CEO.
  • The new organisational chart of HB Grandi was approved by the company’s Board of Directors. The structure of the company was simplified with the goal of concentrating on core activities.
  • The fish farming company Salmones Friosour S.A. was sold around the middle of the year. HB Grandi owned a 20% shareholding in the company through Deris S.A. in Chile.
  • During the latter part of the year, the decision was made to reorganise the operation of the company’s groundfish operations in Vopnafjörður. The company intends to continue to operate in Vopnafjörður between seasonal operations, and an examination is being made of the best manner in which this can be achieved.
  • At the beginning of November, a shareholders’ meeting approved HB Grandi’s purchase of Ögurvík ehf., which operates the freezer trawler Vigri RE. Vigri RE has one of the highest catch quotas in the Icelandic fishing fleet, with 7,680 tonnes of groundfish and 1,663 tonnes of mackerel, based on its allocation in 2018.
  • In November, the Board of Directors examined the possibility of selling a new trawler currently under construction in Spain.

DAILY OPERATIONS

  • The implementation of the environmental management system of HB Grandi continued.
  • A new educational system, Eloomi, was purchased. All HB Grandi employees will have access to the system and appropriate education.
  • HB Grandi and Norðanfiskur completely ceased sending polystyrene (EPS or expanded polystyrene) to landfills, with the attendant environmental impact. Instead, all EPS is now compacted by 95% and the first container is ready for export.
  • Smart containers and smart scales had been installed in all HB Grandi sorting stations by the beginning of the year.
  • Preparations for equal pay certification continued, although the work has taken longer than anticipated.
  • The preparation of a personal privacy policy for the company was completed and published on its website.
  • Workplace, a dynamic communications and collaboration tool, was implemented at the beginning of the year to link together the operating units of HB Grandi on land and at sea and to shorten communication lines.
  • During the first quarter, a new and fully equipped packaging station for frozen products was brought into service in Ísbjörninn, the company’s freezer storage facility.
  • A new quay was opened in mid-year at the company’s fish processing plant at Norðurgarður in Reykjavík, greatly improving all facilities for off-loading catches.
  • Powerful land connections were installed in the new quay. This means that the company’s wetfish vessels can connect to both water and heating utilities when in port.
  • Some experience has now been gained in the use of the new wetfish trawlers. After a rocky start, the vessel and its equipment have met expectations, and with the arrival of these new vessels, the company can take a leap into a new and more modern future.
  • HB Grandi and Íslensk Orkumiðlun signed an agreement on electricity trading effective as of 1 January 2019. The agreement involves energy sales to all HB Grandi operating units, amounting to 65 GWh per year (corresponding to the electricity use of approximately 15,000 homes).
  • The HB Grandi Safety Day was held in November 2018.
  • HB Grandi was named outstanding organisation by Creditinfo in 2018. HB Grandi has been on this list since 2010.

ISSUES

This section addresses a number of issues that have arisen in 2018.

It is the stated policy of HB Grandi to engage in responsible marine produce value creation. This means maximising the value of the shared natural resources that the company is entrusted with and doing so in an economical and profitable manner.

The history of HB Grandi has been characterised by change, innovation and technological development. The company intends to continue to shape the future of sustainable fisheries in Iceland.

HB Grandi intends to set a good example in the community, and company staff strive to be a credit to the company in all their work. Discussions on social responsibility arise regularly when the company is faced with changes to its operations. All changes that the company decides to adopt, even if such changes prove to be controversial, are intended to strengthen the company as a whole and ensure its continued success and that of those who work there.

COMPANY REORGANISATION

HB Grandi is going through a phase of changes. Following significant volumes of share trading in 2018, a new set of owners took over the company. Its senior executive management was subsequently changed. A new CEO took over and the number of Executive Directors was reduced from six to two. At present, the Executive Management consists of three members. The new organisational chart of HB Grandi was approved by the company’s Board of Directors. The structure of the company was simplified with the goal of concentrating on core activities.

During the latter part of the year, the decision was made to reorganise the operation of the company’s groundfish operations in Vopnafjörður. The company intends to continue to operate in Vopnafjörður between seasonal operations, and an examination is being made of the best manner in which this can be achieved. When making decisions such as these, account is taken of economic, social and environmental aspects. The company is duty bound, at all times, to seek means of streamlining its operations.

At the beginning of November, a shareholders’ meeting approved HB Grandi’s purchase of Ögurvík ehf., which operates the freezer trawler Vigri RE. Vigri RE has one of the highest catch quotas in the Icelandic fishing fleet, with 7,680 tonnes of groundfish and 1,663 tonnes of mackerel during the present fishing year. The purchase significantly strengthened the core operations of the company, and its catch quota of valuable groundfish species increased by 16%, or to 55 thousand tonnes.

EXPORTATION OF EPS

During the earlier part of the year, the decision was made to invest in a special compactor to reduce the volume of EPS boxes sent to landfills. A considerable volume of such boxes is delivered to Norðanfiskur, HB Grandi’s subsidiary, due to the purchase of fresh salmon for processing for the Icelandic market. It subsequently became clear that the benefits of reducing landfill volumes would be considerable, as the compaction reduces the dimensions of the fish boxes by around 95%.

In co-operation with Íslenska Gámafélagið, an agreement was reached with a Chinese company with operating units in China and Malaysia. The Chinese company wished to purchase all compacted EPS available from HB Grandi. BM Vallá was then invited join and fill the first 40 ft. container of compacted raw material. BM Vallá in Akranes manufactures prefabricated unit houses and uses a significant amount of EPS in its operation. A considerable volume of the material is damaged in the manufacturing process and is very suitable for compacting. By the end of the year, 7 tonnes of compacted EPS had been collected, 6.5 tonnes from HB Grandi and 0.5 tonnes from BM Vallá. The container is ready for export and it will be quite exiting to follow the progress of the project.

This Chinese company recycles 50,000 tonnes of EPS every year and manufactures e.g. picture and mirror frames from the material. According to the website of the company, the company is saving over 2,000,000 trees from being felled every year and is thereby reducing carbon emissions by approximately 100,000 tonnes annually.

ELECTRONIC LOGBOOKS IN VESSELS

As of 2015, HB Grandi, in co-operation with Klappir, the Icelandic Coast Guard and the Environment Agency of Iceland, has participated in the development and adoption of electronic administration on board its vessels. To date, mandatory registrations on board vessels as regards environmental effects have always been on paper. These include registrations of waste disposal, oil use and the use of ozone-depleting substances (ODS) in a paper logbook according to the MARPOL Convention of the International Maritime Organisation (IMO). The goal is to turn these books into e-books and thereby take a large step forward in the field environmental management.

The work began in 2015 with the adoption of an e-waste log on board Ásbjörn RE 50. Other HB Grandi vessels followed shortly thereafter. Numerous types of log books have now been converted to electronic versions, including oil logs, route logs and ballast logs.

The benefits of the project are numerous and touch on the operation of a large number of parties involved in the issue. HB Grandi can now take advantage of the data stored in the log books for environmental management and can gain an overall picture of all its vessels’ environmental aspects, as well as remotely monitor registrations. Regulators, such as the Icelandic Coast Guard and the Environment Agency of Iceland, can now undertake their statutory surveillance role electronically and thereby minimise the cost and effects that monitoring registrations has on the operation of vessels. Data from the log books is streamed to port authorities who are responsible for their statutory role of accepting delivery of waste.

SAFETY AT SEA

The drowning of seamen used to be quite common. During the years between 1900 and 1975, approximately 40 seamen drowned every year. From 1975 to 1985, fatal accidents were, on average, 14 per year, and from 1986 to 2015, an average of 6 seamen died each year.

There were no fatal drownings of Icelandic seamen in the seas off Iceland in the years 2008, 2011, 2014, 2017 and 2018.

This achievement can be attributed to technological advances, i.e. better vessels and equipment, and not least to the work of the Maritime Safety and Survival Training Centre which was established in 1985. The Training Centre is responsible for education on safety issues and accident prevention. Attending training courses is a prerequisite for being legally registered on a ship.

HB Grandi is extensively involved in accident prevention, as can be seen in both its internal work, i.e. education and prevention, and by the fact that the company supports the robust work of the accident prevention and rescue work both on land and sea through ICE-SAR (Landsbjörg). At present, the Maritime Safety and Survival Training Centre is a subdivision of ICE-SAR.

ILLEGAL FISHING

HB Grandi places great importance on taking proper care of the fish stocks that form our resources. The company complies with all rules and resolutions that apply to fisheries and has no involvement in piracy (Illegal, Unreported and Unregulated (IUU) Fishing).

CATCH DUMPING

At HB Grandi, it is considered responsible fishing practice to fully utilise all catches that the fishing vessels of the company bring in to create as much value as possible. Catch dumping, moreover, is completely illegal according to the Fisheries Management Act.

WEIGHING AND REGISTERING CATCHES

The Icelandic authorities have established strict rules on the weighing and recording of marine catches, and the employees of HB Grandi make every effort to follow them to the letter. It is of extreme importance for HB Grandi, as well as for the Icelandic fisheries sector in general and the nation as a whole, that the condition of the fish stocks remain healthy and that information on catches and conduct with regard to the marine ecosystem is reliable, traceable and transparent.

FISHING WITH BOTTOM TRAWLS

The groundfish operations of HB Grandi are carried out almost exclusively with bottom trawls. The fishing operations are in all cases carried out in accordance with Icelandic laws, and all closures are respected, whether temporary closures of areas due to spawning or whether due to the fragile condition of bottom biota.

BIRDS AND A RANGE OF MARINE LIFE FORMS

Birds and a range of marine life forms are sometimes caught in the fishing gear of vessels, depending on what type of fishing is being carried out. Birds have not been caught in the fishing gear of HB Grandi, but every now and then, its trawlers have caught sharks. The sharks are taken ashore for processing. The company’s pelagic vessels have sometimes netted humpback whales, and such instances have delayed fishing while efforts are made to drive them away. Fishing operations are arranged in such a manner that every effort is made to minimise the likelihood that humpback whales get caught in the fishing gear.

PROMOTE THE INCREASED USE OF RENEWABLE ENERGY

Landsnet, Rarik, HS Veitur and Félag íslenskra fiskmjölsframleiðenda (FÍF) have agreed to encourage increased use of renewable energy in the fish meal and oil processing industry in Iceland. By means of a declaration of intent that these parties have signed, the goal is to make fish meal and oil processing even more environmentally friendly by promoting increased use of electricity in the processing and thereby reduce the use of energy sources that emit greater carbon footprints and, at the same time, increase the likelihood that the goals of the Paris Convention and the action plans of the Icelandic government as regards climate goals will be achieved.

Icelandic fish meal and oil processing manufacturers have, over past decades, used both fossil fuels and electricity in their operation. During recent years, fish meal manufacturers have purchased curtailable transmission and distribution of electricity. Due to the limited security of transmission and distribution in the electrical system, insecure availability of electricity and fluctuating demands from fish meal processors, fossil fuels have been a necessary back-up source of power in the operation and have replaced electricity when needed. This will remain the case at present.

The transmission and distribution entities, signatories to the above declaration, plan, over the next few years, to ensure as far as possible that the transmission and distribution system as a whole will be of use in as economical manner as possible. At the same time, FÍF will encourage its members to try to make their production even more environmentally friendly by using renewable energy sources instead of other more polluting energy sources. FÍF encourages its members to use surplus electricity and distribution as much as availability of such transmission and distribution allows. In 2017, 74% of the energy requirements of fish meal companies came from renewable electricity, and it is believed realistic to increase this proportion to 90% in the next few years. To achieve full electrification, however, significant investments will have to be made in the electricity transmission system in Iceland.

Further information on the energy use of HB Grandi fish meal plants can be found in the chapter on environmental issues.