Arctic Light Products AS is a Tromsø-based trading company in Norway, founded in 2010 on recommendation from Innovation Norway. The company originates from the company Northern Light Products Ltd was founded in 2009 that has developed with Omega-3, krill oil product under the brand name Nordic Light. Entrepreneur is Arild Karlsen, also from Tromsø, whom we are speaking with today.

Script

Interviewee:                       Mr. Arild Karlsen (AK)

Title:                                    Founder

Company:                          Arctic Light Products AS (AL)

URL:                                    https://www.northernlightproducts.no/english

Interviewer:                       John D. Evans (JE)

Date of interview:            17 November 2021

JE  Okay, good afternoon to the viewers of this next SEIML interview with Mr. Arild Karlsen, who is the Founder of Arctic Light Products AS, which is located in Norway. As background information, Arctic Lights is a Tromsø-based trading company that’s in northern Norway, founded in 2010 on the recommendation by Innovation Norway and Arild is its founder. The company originates from Northern Light Products Limited, which was founded in 2009 and has developed the Omega three, krill oil product under the brand name, Nordic Light. This entrepreneur is Arild Karlsen, and he is who we will be speaking with today. Like most of our first interviews, we will break this down into four sections:  will firstly speak and learn about Arild, then we’ll go on and learn about the company he founded, Arctic Light Products, then we’ll talk about the industry that he’s in which he’ll define for us. And then we’ll close off with our fourth section of him looking ahead over the next year about what his business objectives are. So, something very different for us on SEIML ventures and I hope you find it interesting. So good afternoon Arild, nice to have you here.

AK Good afternoon to you too, John.

JE  Okay, so let’s kick off and start a little bit about talking about yourself. So, start off by giving the viewers a brief personal overview of yourself.

About Arild Karlsen

AK Yes, so you said that I am living in in northern Norway in my city Tromsø.  we are calling Tromsø as a northern Paris. I was starting in the fishing boat was only 15 years old and then I jumped up to be a fishing captain. I was 21 years old and then I was captain on a fishing boat.  Then I started to do jump up and I became one fishing boat owner too. So, it was very important to me to do a good job and then all fish  which we get is only quality product. Then in my job I had three fishing boats.  I sold the fishing boats and the company in 2008.  Then I started with this product.  It is very important to me because all we have are only quality fish from  the sea.  And now I think then I sold the ship, I think oh no, now I must find the fish.  Why can I not make a product that was better than fish.  Then I started with this job and connecting with a man, who is a Professor in Omega-3. I say to the man out there you must help me to do and make one of the best fish oil products in the world. This idea and Arctic Light were started from an idea to do the best product in the market.

JE  Okay, okay. Where was this professor from will see from Tromsø as well?

AK From Tromsø, north of Norway. So, I say to him, he was from the university at Tromsø for Omega-3, I say I asked him can you help me to do this product because it’s very important to me to take the right color the color of the from the heart and color for Asia. I hope we can get the product into Asia because in 2010, we attended for export in Shanghai and we see lots of Omega-3 in China, but not quality product. So, I think I come with the quality product and the market is very, very big.

JE  Let’s take a pause for one second because you’re getting into the company. So, I just want to summarize this first part that you said so you were on the boats until 2008. And then you basically stayed in a similar line of business, related to the fish, but moved full time to the development of these new products on the land and built a factory, all the time it being in your hometown in northern Norway. Okay, so let’s go and talk about your company when you founded, Arctic Light Products AS, which you started to tell us about so you you’ve told us how it started in 2009 and you worked with a professor, so, tell the viewer who haven’t seen your product yet what is the main product that you are offering and how is it precisely different from the other Omega-3 offerings?

About Arctic Light Products AS.

AK Yes, first time I started this idea in 2006. And the job of it the first boxes was come out the factory in 2009 and 2010. I needed money, more money and then I take the contact with my boss, my wife, and I say to my wife, you have done some good business but now you can buy one of the best businesses from me. Can you buy this company? And then I must go three months before she said, okay Arild, I will start it, this. But my company was Northern Light and then she says, Arild, my companies shall have another name and is Arctic Light product.  Yes because Arctic is spelled like their name in Asia. People from English to Norway. Then we are common with the idea Arctic Light.  Then she says, Arild, the name on the product shall be Nordic Light, krill fish oil.

JE  Okay, very interesting.

AK I was very happy, then I get money to do the best product.  Then we started to make this product the other man asked me: shall we take fish oil from the liver? No, we should not have from the liver because in the liver is all bad things. So, we should take the from the fish meat. It’s very important that and then he said, Arild, then you have a very expensive product because we can buy we can buy liver oil in Norway 60, 70 crowns per liter. But shall you have the fish oil from the meat, then you must pay 155 NKR. Yes, but I say, don’t think money, we shall make a quality product.  Okay yes and then we should have the red color okay?  So, shall we have some red color in this? No, no, we shall blend it with krill oil, because krill oil is black, black red. Then we are blending with fish oil and then we get the right color.  Then I say, there we have the red color, there we have the right taste.  Because I hate the Omega-3 from the liver, it’s not good. It was very important to me we should have the red color, we should have the good taste.

JE  So, to summarize that point. So, what you’re saying is because there’s a lot of Omega-3 products out in the market, but they’re not all the same. And a lot of the cheaper ones are taking from the liver of the fish, whereas you’re taking it not from the liver because there’s other contaminants in the liver, you’re taking it from the flesh so you don’t get the contaminants from the liver and you’re also adding the krill oil which is giving it a different flavor.  So, you’ve you have an Omega-3 product, but it’s different from the others it’s a premium product, versus the other cheaper ones which come from the liver.

AK Yes, one thing it was also important to me, there was krill oil as it has this very good effect for the brain too.  So, I think the blending with Omega-3 from the meat and krill oil it was fantastic because the first customer sends a message to me.  Arild, we have eaten lots of Omega-3, but when we are starting to eat your capsules, we get an energy. I said so you not get before from another Omega-3? And then I think fantastic there we have, because it’s very important to me to help these people, some need quality product. We should not think money, because can we market this and the customer understands this is not a cheap product. This is quality product, we can get a better health.

JE  Okay, okay. Now describe to me your manufacturing plant and facilities, the number of staff who works there because it sounds like you’ve got a complicated process.  So, what are the facilities and how many people are there, describe those for us.

AK Yes, in the factory we have 20 persons and we have two persons in Tromsø, north of Norway. So, also two persons in south of Nora, some helping selling.  And we see today we have a visit from a China company and the company say, oh Arild, this is very good, but I see one problem.  Okay, what is the problem? Yes, we can see, what is your product capacity? I said no problem because we have we can make 480,000 boxes in the month. And then the man said, okay, then we have a start.

JE  Yeah, there is a large capacity there.

JE  Okay, so, inside the manufacturing plant, do you just bring in the fish and go straight from the fish out of the water to the completed capsule? Do you do the whole process yourself?

AK Yes, but we have also one person somebody that buys the krill oil.  Before we took the krill oil from Canada, it was a very good krill oil. But we switched to the best krill oil is from AkerBioMarine. This is a Norwegian company in Norway and the largest owner in this company is the name Røkke. This is a company in Norway and the biggest owner in this company is the name Raka.  He is fishing krill oil and the krill oil he has is the best in the market. We get our product into Dubai, and now we get into Vietnam, and Rusland <Russia> too.  And this is fantastic, Rusland have made the first order.  So in next week, we will send over the first order to China.

JE  Okay, so Dubai, Vietnam, Russia and now China. That’s quite a spread geographically.

AK Yes, it is. Because I had hoped we would get China first. But then the problem came when Norway gave this Peace Prize to a Chinese man and then China stopped all trade from Norway. We sold about 9,000 boxes, but then China stopped all trade from Norway. But after, China approved Norway, we can sell my product to China. We now sell products from Norway to customers in China. In 2010, we started submitting lots of documents to China China SFDA in Beijing to get the product into China. But then China stopped Norway because this Peace Prize was given to a man in China. This was madness from Norway to do so, because there were many companies that got into trouble in Norway after all trade was stopped to China.

JE  Okay, but that market is now opening back up. And so, you hope to be selling into China again, quite soon.

AK Yes, Norway is open again. So, we, maybe we will go with this too.

JE  Now, I’ve been taking omega vitamins for decades, and I just started yours on Sunday. Thank you very much for that. So, let’s, let’s talk about your buyers and your, your, your distribution system that that you work through. We’ve talked about this a little bit. So, are you looking to sell directly to individual buyers in say, China? Or are you trying to find distributors that you can sell a large volume and then they will sell it to the stores? What is your distribution strategy?

AK I wish to start to get selling more from our internet site website to the person in China. The same, we will jump if we a distributer too. But the first, we will start to sell to person from the website because it’s not a problem.

JE  And that would mean someone would go onto your website and buy it and you would ship it directly from Norway to the person’s home in China. Is that correct?

AK Yes, it’s good. We will send it directly from the factory.

JE  Is there a restriction on how many you can send directly to a person in China? Is there a limit? Or any restrictions?

AK Yes?  Inside China, we can send three boxes.

JE  Three boxes.

AK But we have some persons, customers in China, but only small.  They are buying one box.

JE  Yeah. Okay. So that that can get you started off, it can get your product known in China, but you will have to find another distribution channel, whether it’s the international online sales or a distribution partner in China to grow up the volume.

AK Yes, this is correct.

JE  Okay.  Okay. And you said the capacity is 480,000 boxes per month? And for I know for a box, because I have one on my table, there’s 120 tablets in them. And you take two a day, so basically one box lasts for about two months. Is that correct?

AK Yes. It’s so very important to me to get the boxes we can have for two months.

JE  Okay. Okay. Very good. Okay. I mean, you you’ve talked about the situation between Norway and China. Does the government in Norway, can they provide you with any assistance in growing your export business? Is there like a, an Export Development Company like in other countries that help local companies export?

AK Not sure. I have tried to job to get cooperation with this person in Norway, but they are not helping. I need I need a person in China, I think.  So to help me be there with the SFDR in Beijing.

JE  Yeah. Yeah. Okay.  Well, we’ll see what we can do. And I’ve got Jina on the case. So hopefully we can come up with something to help accelerate the process because sending three boxes a month to China is a very tiny little bit of a very, very big market. And what the, the, the visitor from China said to you about capacity from their perspective is a fair comment because with 1.4 billion people, and yours is a consumer product that you sell to individuals, so it’s a big market to cover but a lot of lot of opportunity there. Let’s talk about the industry now which is our third topic for today.  What industry do you put yourself in or is it a fish oil industry? Is it a vitamins industry, a healthy industry, what industry are you in?

About the fish oil vitamin industry

AK In the fish oil vitamins.

JE  Fish oil vitamins, which I guess are a fairly big market and vitamins are certainly a big market as well. So, being in this category, is your business heavily regulated in Norway are there as a subject to government approvals inspections or anything like that?

AK Yes, we have in Norway, Rusland and Dubai, and Vietnam. We get these documents.

JE So, in every market that you sell into, you have to meet certain requirements to be able to sell locally.

AK Yes. We wish the company will buy lots of boxes. Then we must have this document.

JE  Okay. So, you, you started off by differentiating your product.  Yours is a premium product, it doesn’t take the omega from the liver, takes it from the flesh, you add krill oil. So, who do you consider your major competition for your premium product? Or are all the others selling the cheaper Omega-3 vitamins?

AK Yes, I think, we take China.  In China, a lot of people make more money than before and the middle-class middle class that is then the day they are see artists is a quality product. Some can do some as you get a better health. The women they get stronger nails. More energy and good.

JE  Complexion facial.

AK Yes, yes. Yes. Okay.

JE  So, I can see the health benefits to it. And you know what I’ve seen in my just over 10 years of living in China, just like in other parts of the world, people are becoming more concerned about buying healthy products, even if it means they need to pay a little bit more. So, I think providing a better product, even though it’s at a higher price is certainly much more accepted these days in China than it would have been 10 or 15 years ago. So, the other question I have is, and this is important for your marketing, is anyone else, as a producer, producing the type of premium product that you’re producing? Not taking from the liver, adding krill oil or are you unique in offering this this premium product?

AK Yes, our blending is unique. Because the other make 100 omega-3 in the capsule or 100 Krill Oil in the capsule. We have seen some bad companies have tried to make the same product we have, but they use cheap oil. They have not so much Krill Oil. So, our product is unique.

JE  Okay, okay, well, go on.

AK Yes. This company in Rusland, the boss in this company is a doctor. And he said, Arild, I have eaten lots of omega-3 before and then I started eating your capsules and then I get an effect that I don’t have before when I eat other products. And then I say, okay, then you see again, how important to do only quality oil and quality product. Yes. And then he last started to say, Arild, are you taking this product into China? No, no, no take to Rusland. Yeah, I say fantastic. Because I have sold a lot of fish to company in Rusland. They hurt they are out. I have sold a lot of liver to Rusland because I know in the market, Rusland is very, very big. No, we’re we are smiling and happy as we get this company, because the boss is a very good person. And this is quality.

JE  So, you hope to replicate the success you’ve had in Russia, in China in the upcoming year. Okay, good, good to know. And so, you’ve got a unique position, you’ve got a premium product, and there doesn’t seem to be any competitor that’s providing the same sort of premium product. So, your challenge is all about marketing and getting that message out to the people so that the people who can afford to pay more know there’s a product, a better product out there. So, it’s really effective marketing, which will be very, very important. So, let’s talk about the last two points about the industry. Did the impact of COVID, the pandemic, did that have any big impact on your business, positive or negative?

AK No, only positive, because there’s some companies say, the vitamin D, B-3 are very good for the corona. Oh, fantastic. And then this only positive lesson from the customer.

JE  Okay. What about the company in say, three years’ time? You’ve got a capacity now of 480,000 boxes per month, are you likely to increase the capacity of the company in the years ahead? Are there any plans in that way?

AK Yes, we can see this, this is starting to make a big company. And we have it today we have the capacity, I say, 480,000 boxes in a month. This is no problem for us to make the double in demand. It’s not no problem.  But I say to the boss in the factory, okay, this starting slowly we must start slowly because it shall only be quality product from this company. So, to this year, we will be selling for 2-3 million. But in three years, I see if you can sustain and sell 50 million in the year.

JE  Okay. So right now, you’re producing 480,000 a month, but your existing factory could produce 960K. So, you could increase capacity with and stay with the same plant, manufacturing plant. Is that correct?

AK Yes, yeah. Okay. So that was it today the only producing …

JE  … just producing 480 today.

AK Yes, we have capacity today to do this.

JE  Okay. But you could double the output with the same manufacturing facility. So, you’ve got room to grow before you have to build a bigger or a second plant?

AK  Yes.

Looking at the next 12 months

JE  Oh, yes. Good. Good. Okay, so you’ve talked about longer term, 50 million. That could be a very, very big increase. But let’s just talk about one year, next year. What are the key priorities for your business for 2022?

AK Yes, the key is, we must get someone to help us with the marketing. Because every new customer, company, they send him a message to me. So, Arild, we have a heard of you and your capsule, but we don’t see any marketing. Yeah. And then I say, before I was a fishing man, a fishing boat Captain? I don’t, I don’t know marketing. So, I need help.

JE  Yeah, yeah. It’s, it’s interesting, I’m just going to tell a very brief story, this is an aside. But we work with a number of startups, you’re not a startup, you’re a more established business, but with startups, in the medical area, in the financial technology area, and people come out with medical knowledge or technical skills. And, and so many younger companies don’t realize how important marketing is because you have to do marketing, to get sales, you have to have sales to generate revenue. I was in the financial industry most of my life with big banks. And I didn’t really think about marketing, because it was a big, powerful bank. But now I’m working with smaller companies, I’ve come to appreciate how important marketing is to, to keep a business alive, to make it grow, and to make it profitable. So yeah, you’re absolutely correct. Marketing is difficult to do, but it’s so very important. So that’s one key objective. Are there other important objectives for next year, beyond marketing help?

AK No, because we have all the all the other. So, we have a quality product. Good name, brain. But we need help to market. Okay. So, one thing is very important for me, you know,

JE  So, as we would say, for an established SME, small to medium sized enterprise, you’re now entering a phase where you, you really want to grow the business.  You’ve got all of the fundamentals, you’ve got the good product, now you just want to expand the capacity and grow it and marketing will be very important for that. So, I hope we’ll be able to help you out. And I hope one year from now, when we do a follow up, we’ll see, we’ve already hit 960,000 boxes per month. That’s what I hope. So, thank you very much for your time. It’s been great. I mean, we’ll put on all sorts of information on the video, so people can see the product brochures and stuff like that. It’s been a very different topic for me. But one thing I’ve learned is that I started out working with health care companies, and people who invest now, they don’t just think about health care, they think about healthy living. So, they think about the food they eat, they think about vitamins, they think about exercise. It’s a much broader array and if you’ve got a good premium product, that’s a vitamin supplement that does those things, then that’s really a very important part of this healthy living movement we have today. And so, I think you’re well positioned to take advantage of that. So, thank you for your time. It was a pleasure speaking with you today.

AK Thank you the same bye bye.

End.