A new frontier
The latest wave of land-based farming projects represents an exciting new era for aquaculture, but is the ambition matched by practicality? Fish Farmer’s expert panel considered the question in our latest webinar.
THE PANELLISTS:
Thue Holm is Managing Partner at Aquafounders Capital and a director of The Black Cod Company.
Paul Howes is Manager at the Centre for Sustainable Aquatic Research, University of Swansea.
Trond Schaug-Pettersen is CEO of Norwegian land-based fish farming company Salmon Evolution.
The discussion was facilitated by Robert Outram, Editor, Fish Farmer.
An impressive amount of investment is pouring into land-based fish farming around the world, from Scandinavia and the Middle East to Florida and Japan. But can the technology and biology combine to ensure this industry has a profitable future?
This was the question we set out to answer in the latest in Fish Farmer’s series of Aqua Agenda webinars.
Thue Holm has gained experience in the course of a long career in aquaculture, including a role in the creation of RAS salmon producer Atlantic Sapphire, and now as Managing Partner of Aquafounders Capital, which he started jointly with fellow entrepreneur Ohad Maiman, who had been CEO at The Kingfish Company, another land-based fish farming business.
As Holm explained: “We had both experienced, the hard way, a lot of the issues.”
Farm in a Box
Their current projects include The Black Cod Company, which plans to produce black cod in the Netherlands, and Farm In A Box, which has developed a modular RAS (recirculating aquaculture system) farm system designed to make farm set-up quick, easy and cheaper than the typical “bespoke” approach.
Regarding The Black Cod Company, he said: “We believe that locally produced, high value species can give a price point that a RAS farm needs. You can also deliver a fantastic story to the consumers.”
For Farm In A Box, meanwhile, he said: “We wanted to create a more standardised, cheaper way of building land-based systems, and we also felt it needs to be much easier to operate these systems.”
At Swansea University, the Centre for Sustainable Aquatic Research operates 15 separate RAS systems in 13 labs, housing fish at temperatures of 8°C to 30°C and from full salinity to freshwater and anywhere in between.
Paul Howes explained: “We have three core missions: to enhance the student experience; to produce impactful papers; and to work with industry to answer industry related research and innovation questions.
“So my role is to be somewhere between academia and industry, to form a bridge between those often disparate areas.”
Salmon Evolution, Indre Harøy Phase 2
Salmon Evolution has a salmon farm at Indre Harøy on the Norwegian coast. It is a hybrid flow-through system, which as Trond Schaug-Pettersen explained, contains elements of both a RAS facility and a flow-through system.
He said: “We have tried to capture the benefits of both a full flow through system and a RAS system, where you have high recirculation.
“For us it’s all about three things, first providing a good environment so you can take the full growth potential of the salmon; secondly, reducing operational risk to a minimum; and finally, if something happens you need to be able to contain it.
“About one-third of the water in our system is a constant flow, and we recycle up to two-thirds.”
He added: “We have had very good biological results. When you are doing innovation at scale you always encounter challenges, but the big picture is that this has been working very well.
“In the first half of this year we became profitable for the first time, which was a huge milestone for the company, and we had farming margins on a par with some of the best conventional farmers.
“For us, it’s never been clearer that this is working.”
Scale has been the theme for many of the land-based projects underway around the world. So why does size matter?
Thue Holm said that scale is necessary to offset the capital costs of a RAS or flow-through farm. Also, he argued, the lack of an existing industry in many regions where these farms are being built – like Florida, or central Japan – means that issues like feed, processing or distribution can be problematic at a small scale.
Paul Howes added: “When you scale, you have the ability to have a much longer viewpoint and weather the storms when prices change. If you’re somewhere in the middle, your profit margin can quickly move into debt.”
And Holm added: “That’s also why we went for black cod because it’s a niche market, and really high value. So you can either go for scale, in a commodity, or you can go small and target a niche market.”
Another question concerned production challenges. How serious is the risk of disease, or off-flavours like geosmin?
Biosecurity should be manageable in a RAS farm, Holm argued, which should mean minimal risk of diseases or parasites, although issues such as a potential build-up of hydrogen sulphide could cause problems if not carefully monitored.
Salmon Evolution fish on ice
Trond Schaug-Pettersen said: “Off-taste is not an issue for a hybrid flow-through system, but the more water you use the more challenging it is to ensure disinfection.
“You need to start with healthy smolt. In our system we filter out particles and we also disinfect the water with UV.
“There will always be a risk that something will get through. But if you have a healthy environment and healthy fish, normally that would not be a problem.”
“One of the main benefits of our system is that you don’t have to deal with sea lice, so there is less handling and you have a stronger fish.”
There are currently competing RAS systems, but will aquaculture technology be standardised?
Thue Holm argued: “For RAS farms there are a lot of technologies but the basis for a RAS farm is very similar – there will be particle removal, some type of biofilter, some type of degasser, disinfection and oxygen injection, and it has looked like that for 40 years.
“We see diversification in agriculture and it is the same with aquaculture.”
So how aware are consumers of the increasing share in the seafood market taken by land-based farms?
Tanks at CSAR, University of Swansea
Paul Howes said: “A lot of consumers just want to look at what the price is. Budgets are tight and consumers want value for money, but they also want to know that, for example, the fish or shrimp was not grown in polluted waters or has been grown to high welfare standards.
“People in some countries are eating less fish so that’s a challenge. While in others, people have more spare cash and are looking to import seafood products.”
Trond Schaug- Pettersen pointed that this question also relates to scale. If the producer is selling fish as a commodity, the fact that there is not enough supply to guarantee its availability all year round is not a problem – but it is a problem if you are selling it as a unique brand.
He added: “Also, you need to communicate the story and this takes time.”
The panel also discussed what might constrain the growth of this sector. Availability of capital is a key issue, but so is the availability of people with the required skills to run a fish farm system. The knowledge and experience of local regulators is also an important factor, so those countries with an existing aquaculture industry have a definite advantage in the development of land-based fish farming.
So, what will the industry look like in five years’ time?
Trond Schaug-Pettersen said: “Land-based will be a big part of the way we produce salmon, over the next five years probably not so much, but more companies are heading towards a base size and you will get an inflection point. So, in 25 years, it will be quite a big industry.”
Paul Howes said he expects to see several huge companies, maybe integrating RAS aquaculture and cage farming, but alongside that a proliferation of the smaller niche RAS systems around the world, tailoring their product to local markets.
Thue Holm agreed that land-based aquaculture has a bright future: “I’m very bullish on the sector”.
To watch the whole webinar online go to: https://youtu.be/lNTW6D3MR90
