Salmon success nightmare

New Zealand King Salmon is turning away about 25 tonnes of orders a week because it can't meet the demand, chief executive Grant Rosewarne says.

The Nelson-based company is proceeding with plans for a $16 million expansion of its processing plant in Tahunanui and is now also scoping the possibility of establishing another facility in Picton.

It follows a 50 per cent increase in demand for its products this year. "In some ways, it's a nightmare," Mr Rosewarne said.

The biggest increase has been from Japanese markets, with new buyers turning to the company when they were unable to source salmon from their traditional suppliers when the volcanic eruption disrupted air services earlier this year.

The company also has a strong focus on supplying the domestic market and exporting to Australia and the United States. "All those have picked up."

It was having to tell some long-standing export customers it could no longer meet their orders because others were prepared to pay more for the limited supply, Mr Rosewarne said.

"Gee, it's difficult."

Earlier this year, the Government announced law reforms to help free up water space for aquaculture. New Zealand King Salmon currently occupies about five hectares and is keen to increase that as soon as possible.

Mr Rosewarne said it was negotiating with stakeholders around the Marlborough Sounds in the hope that it would be able to use more space once the legislation was passed.

"There's a few detractors but they're reasonable people. We'll probably work out an agreement that suits everybody."

He said the facility in Picton would be used for primary processing, while secondary processing of high-value product would remain in Nelson.

The Picton facility would be smaller than the one in Nelson, he said. "We're just starting the process off."

- © Fairfax NZ News