RAS Conference in Miami Attracting Strong Investor Interest


Investor excitement over RAS reflected in growing interest for Miami workshop
By Jason Huffman Oct. 19, 2018 17:25 BST

When it comes to the recent enthusiasm around land-based salmon production, Norwegian seafood analyst Tone Bjornstad Hanstad likes to quote Bill Gates.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10,” the Microsoft co-founder and former CEO said in his late 1995 book, adding: “Don't let yourself be lulled into inaction.”

Gates was writing then about the implications of the personal computing revolution and the arrival of the internet, which was just beginning to explode. He wasn’t wrong.

Hanstad, an equity research analyst with DNB Markets, in Oslo, is one of the 30 presenters to be featured at the Conservation Fund’s Aquaculture Innovation Workshop, in Miami, Florida, Dec. 4-6. More than 200 attendees are expected at the conference, the 10th time the event has been organized. Monday is the last day to save $150 on registration.

Organizer Brian Vinci, director of the Conservation Fund’s Freshwater Institute, said the number of registrations for the upcoming event is the highest it’s been and he’s also receiving calls weekly from personal wealth management offices with large dollar portfolios that want to know where they can gather more information about the industry or which land-based fish producers are the best to put their money in. Several of those callers have signed up to attend the event in Miami, he said.

Those are two more signs that the recirculating aquaculture system market has gained significant momentum recently in North America. The more evident sign of how hot RAS is, of course, is the simultaneous construction of three large land-based salmon facilities on the East Coast of the United States, including Atlantic Sapphire, in Homestead, Florida; Whole Oceans, in Bucksport, Maine; and Nordic Aquafarms, in Belfast, Maine.

Combined, the three facilities have set goals of growing and harvesting, in just a few years, more than a quarter of the 400,000t of Atlantic salmon consumed annually in the US, though that number is expected to increase as Americans are also growing their appetite for salmon.

Both Johan Andreassen, the CEO of Atlantic Sapphire, and Rob Piasio, the CEO of Whole Oceans, will be among the presenters expected to give updates on RAS construction efforts at the event. Andreassen's Norwegian-owned company started trading on the Oslo, Norway, stock exchange in May under the ticker symbol ASA-ME.

A field trip to the Atlantic Sapphire construction site is planned for the last day of the workshop.

Other presenters include celebrity chef and author Barton Seaver, Kingfish Zeeland COO Kees Kloet, Skretting Aquaculture Research managing director Alex Obach, Ideal Fish president and CEO Eric Pedersen, and Whole Foods Market’s seafood quality standards coordinator Carrie Brownstein. Frode Mathison, Grieg Seafood’s director of freshwater production and chairman of the board at CtrlAqua, will be a dinner speaker.

Hanstad is slated to precede Monica Jain, the founder of Fish 2.0, in consecutive sessions on financing and investing in land-based RAS projects at the workshop in Miami.

An increasing number of projects and capacity

“When we looked at the number of land-based projects and identified planned capacity two years ago we found 20 projects and roughly [150,000 metric tons] of planned capacity,” she told Undercurrent. “The number of projects identified has increased to 30, while the planned capacity has more than doubled.”

Bucksport, Maine's closed paper mill, the future home of Whole Oceans' land-based salmon farm, as visible from the shoreline. Photograph by Jason Huffman.

The US is not the only country with RAS facilities under development, Hanstad stressed. RAS facilities are being built or already constructed in Switzerland, Poland, Denmark, Canada and China, and many are achieving premium prices on their products, though none are yet producing large volumes, she said.

In September, the Spanish company Norcantabric announced that it had invested €30.0 million ($34.4m) in the development of the country's first RAS Atlantic salmon farm, to be constructed in Cantabria. The project is to be funded by the Spain-based private equity lender Santander and local government. The first harvest is expected in late 2020 or early 2021.

Also last month the Israeli indoor aquaculture technology company AquaMaof Technologies shared its excitement with Undercurrent about further RAS developments after the first two years of a facility in Warsaw, Poland, called Global Fish. The company is now growing 600t of salmon per year.

Companies that support RAS also are stepping up their investments. Fish feed maker Skretting, on Oct. 1, announced that it was expanding its salmon research facilities in Stavanger, Norway, to include a new state-of-the-art recirculation hall. The new hall will contain 12 independent systems in order to research the effects of new feeds and formulations on salmon development.

RAS 'ticks the boxes'

“All of the fundamental drivers, such as increasing demand, lack of production growth (supply), increasing production capex within traditional farming, production cost and biological challenges within traditional salmon farming is even more relevant today,” Hanstad said. “What takes time is financing, regulation and biological experience, the difficulty of raising the salmon to full harvest size should not be underestimated."

The make-up of the RAS salmon industry “ticks the boxes” for many different types of investors, including those interested in new technology, [environmental, social and governance]-friendly if control on the biology, growth, protein production, she said, adding: “But you have to have stomach for the risk.”

DNB is most focused on Atlantic salmon, but also sees RAS facilities for other species attracting investors, including especially yellowtail kingfish, “a high-value species with a shorter production cycle than salmon”, Hanstad said.

Before beginning its construction on salmon facilities in Maine, Nordic Aquafarms began growing yellowtail kingfish in its first production facility in Denmark.

Cantabria, Spain, the future location of Norcantabric's RAS salmon farm.

Jain, whose Fish 2.0 organization has been holding contests every two years since 2013 to grow innovation in seafood, agrees that the conversation around RAS has changed substantially in a very short period of time. She recalls speaking to a group of investors at an event in 2015 where half the room expressed skepticism about the future of land-based fish farms.

Today, Jain said, most of the room is on board, and the question is less about whether it is the right time for RAS and more about how to best make RAS work.

“People are realizing aquaculture is really necessary and RAS gives you the ability to address many of the issues, such as the problem with escapes. There is more control in the system. Also, there is a growing amount of technology available and the cost of the technology is coming down.”

Fish 2.0 is holding its own aquaculture-related event in Baltimore, Maryland, Nov. 7-8.

Contact the author jason.huffman@undercurrentnews.com