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Qlice Report Summary

Project ID: 736310

Periodic Reporting for period 1 - Qlice (Qlice: Environmentally-friendly system to combat sea lice in salmon farms)

Reporting period: 2016-09-01 to 2017-02-28

Summary of the context and overall objectives of the project

Seacalx is pursuing the market rollout of Qlice, which is a novel and environmentally-friendly solution, consisting of a chemical agent and a delivery system to combat a major parasitic – i.e. sea lice – issue affecting salmon farms, which currently cause losses above 550 M€ for the salmon farming in Norway.
Seacalx’s novel solution will be the only treatment on the market capable of placing the salmon farming industry back to sustainable growth by tackling the sea lice problem, while buffering seawater acidification nearby salmon farms. Seacalx forecasts to achieve cumulated revenues of over 203M€ with an EBITDA of 96M€ within five years after market rollout. The present feasibility study represents a key step towards the implementation of our overall innovation project, the primary goal of which is to reach the market with the Qlice solution through full-scale demonstration of the technology’s benefits. Through the large number of contacts with salmon farmers, including Marine Harvest (the largest end-user in the market), the demand for the Qlice was clearly verified. Our study has shown that the above ambition is realistic if a focused route-to-market strategy is followed.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

During the feasibility study we have: • Completed a detailed market investigation for each of our envisioned initial markets, i.e. Norway, Scotland, Chile, and Canada; • In Norway, salmon producers are forced to treat the sea lice infestations if more than 1 adult female parasite per each two salmons are found; • Confirmed that the largest potential for Qlice is the Norwegian salmon farming industry. We will thus pursue Norway firstly and expand from there; • Managed to secure the commitments from Marine Harvest and Lerøy Seafood Group to demonstrate the Qlice treatment during Phase 2 implementation – these companies are leaders in most of the markets we are pursuing, which shall facilitate a future expansion of Qlice to key/global markets; • Realised that the significance of the sea lice issue and its sub-issues varies from country to country; • Observed that sea lice continue to hinder both cultured and wild salmon in all targeted markets for Qlice. Sea lice is a very real threat to the future aquaculture production of the affected species; • Documented a comprehensive regulatory/certification strategy for enabling the market authorization for Qlice; • Further updated and enhanced our business plan based on our findings during this feasibility study.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Qlice is a disruptive solution to the treatment of sea lice, which has huge impacts on the salmon industry. The total number of treatments applied to combat sea lice outbreaks has almost doubled within four years in Norway. The costs related to treatment itself rose from 164 M€ in 2014 to 273 M€ in 2015 (66.7% CAGR). Unlike any other treatment on the market, Qlice will stop sea lice infections whilst compensating a major negative impact resulting from the increased farming activity at sea – the local seawater acidification caused by leftover feed and fish wastes. It brings another positive side effect to the salmon farming activity, which is removing/avoiding biofouling formation on the net-pens. It is documented that Qlice doesn’t harm/have any negative impact on cleaner fish. At the same time, Qlice provides an attractive business case with sound and realistic economic benefits to the SME, with a range of additional, positive societal benefits such as job creation – with an expected 60 additional employees at Seacalx in 2024. The estimated addressable market size for Qlice in Norway is ~152 M€ per year. As Norway is responsible for approx. 50% of the global production of farmed salmon, the global market size amounts to approximately twice this figure. The commercialization of the Qlice solution will have the following socio-economic impact (Year – Revenue | New jobs at Seacalx):
2020 – 11.4 M€ | 8
2021 – 25.0 M€ | 12
2022 – 48.0 M€ | 20
2023 – 57.2 M€ | 10
2024 – 61.6 M€ | 10

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