The money will be used to construct a two-story building to connect two existing factory units at QA Fish’s site on Blacksness Pier in Shetland.
The expansion would double the size of the factory to at least 300m2 and increase the firm’s freezing and chilling capacity.
Director Csaba Steinbach told FoodManufacture.co.uk the expansion would allow QA Fish to market its products to supermarkets.
“We process scallops and with the bigger building to do more scallops and do different packaging for them and market them for supermarkets,” he said.
‘Market them for supermarkets’
“We’d also like to start working with crabs and lobster again and exporting smoked products from Shetland.”
The company hoped to add more value to its products to capitalise on the higher level of quality of Shetland fish, claimed Steinbach.
“In Shetland, we don’t sell anything on price because we can’t compete with the mainland prices,” he added. “But the quality is better here.”
The project is currently awaiting planning permission from the Shetland Council, but Steinbach hoped the factory would be built by the second half of this year.
QA Fish processes and packs fish sourced from Shetland’s waters, before being shipped to Aberdeen and distributed to the UK mainland and the EU.
40% exported to continental Europe
About 60% of the firm’s volume of fresh whitefish and scallops are distributed to the UK, while 40% is exported to continental Europe. The company makes 70% of its sales in the UK.
Steinbach said the company was managing fine despite the Brexit vote, but it could be a problem in the future.
“Nobody knows what will happen. If its bad news and we can’t sell to the EU, that could be a big problem,” said Steinbach.
The company received a £250,000 grant from the EU towards the expansion, as part of £1.7M of funding for Scottish fish businesses.
The UK exported 443,000t of seafood in 2015, worth £1.3bn.