PE fund plans ‘global roll-out’ of industrial-scale RAS salmon facilities
By Dan Gibson Nov. 8, 2018
As the market for land-based salmon farming continues to grow worldwide, investment firm 8F Asset Management has announced plans for a new, industrial-size Japanese farm, intended to be the first of many across the globe.
Headquartered in Singapore, 8F manages a private equity fund that specializes in fully-integrated terrestrial salmon farms utilizing recirculating aquaculture system (RAS) technology. The new facility will be operated by a company created by the fund, known as Pure Salmon.
The new production and processing plant, named ‘Soul of Japan’, will be built in Tsu, Japan on a site of approximately 137,000 square meters – making it the largest RAS facility ever built in Asia. Fish hatcheries, grow-out systems and processing facilities will all be present at the site, which 8F intends to have an annual production capacity of 10,000 metric tons.
It’s a $162 million investment which should be operational within the next few years, according to 8F co-founder and partner Martin Fothergill.
Artist's rendering of Japanese facility.
“We start building next year, and then it becomes fully operational in 2021, so we’ll be having the first harvests in 2022. And we’re not going to increase capacity in phases – it will be built full-size on day one,” Fothergill told Undercurrent News.
The new plant is effectively a scaled-up version of the 580t “proof of concept” RAS facility in Poland, a company that 8F’s private equity fund operates as joint 50/50 partners with Israel’s AquaMaof Technologies.
The operation, named Global Fish, has successfully grown several batches of harvest-sized salmon since it opened in 2016 and plans to begin selling its product to market by early-mid 2019.
It is understood that the technology developed by AquaMaof at Global Fish -- which created an indoor environment devoid of chemicals, pesticides, antibiotics and other pollutants -- will now be used on a larger scale at the Soul of Japan facility.
“Everything we’re doing is really an industrialization of the facilities that we’ve seen already,” Fothergill said.
“We believe from an economy of scale perspective that it makes sense to be larger, but also that RAS is now at the point where it can be industrialized this way; after all, to meet the demands of the retailers and distributors, you need to be able to produce a large, sustainable supply of fish.”
8F intends to make the fully-integrated facility the first of many across the world, all operating under the Pure Salmon brand. The firm says that it has set itself a target global production volume of 260,000t per annum.
According to Fothergill, Japan’s relative geographic isolation made it the ideal location to set Pure Salmon’s global plans in motion.
“Japan to us was a very obvious place to go because they’re a large consumer of salmon and that salmon is flown a very long way to reach them -- from Norway, for example,” the 8F co-founder said.
“We can produce our salmon much more cheaply because of course, we’re not having to fly it anywhere, and likewise our consumer gets a fresher fish, because it hasn’t been transported very far at all.”
The company has also planned additional facilities across the globe. The next stop is the US, where 8F intends to invest in an even larger RAS plant with a production capacity of 20,000t – double the size of Japan's.
Various domestic commercialized RAS enterprises have already been set up in the country, but Fothergill has no doubts about existing demand.
“It’s a very deep market in the US. A large amount of their consumer demand there is imported, so we have no doubts about finding a place in the market,” he told Undercurrent.
Future facilities are being planned for Europe and China, according to Fothergill, and likely to be built at a similarly impressive scale.
“We expect that everything we do will be either 10,000t or 20,000t depending on the market,” Fothergill said.
Leading the drive for RAS salmon
Despite the existence of RAS facilities for other species such as tilapia or rainbow trout, 8F has no plans to diversify from its initial product range – hence the company name, Pure Salmon.
“We’re focusing on salmon because it works well in RAS, it’s a well-known, globally recognized fish, and people understand the health benefits of eating it,” Fothergill told Undercurrent. “Since we’re running a global business, it would be much more complicated if we were producing different species for different countries.”
It’s been a big year for land-based aquaculture – Norwegian firms have reportedly begun shoveling hundreds of millions of dollars into massive RAS facilities on the Norwegian coast to slash their ocean pen farming cycles.
Meanwhile, Nordic firm Atlantic Sapphire has completed the first phase in the building of its very own giant RAS salmon-farming facility near Miami, US, which aims to have an annual production capacity of 10,000t by the start of 2019.
Fothergill hopes that Pure Salmon will ultimately become market leaders in this growing industry.
“There are people looking at doing big individual facilities in it, especially in the US, but no-one else is looking at it globally like this; so we expect to be leading the charge, with respect to a global roll-out of industrial-sized RAS facilities.”
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