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"Aquaculture, not the Internet, represents the most promising investment opportunity of the 21st Century."

- Peter Drucker, Management Expert & Economist

2019-11-05

CP mulls China RAS salmon, shrimp expansion

Interests controlled by Thailand's Charoen Pokphand Group (CP) are mulling a move into recirculating aquaculture systems (RAS) for salmon as well as shrimp in China

The plan is for three-to-five 10,000-metric-ton RAS systems for salmon in different parts of China, as well as a smaller 1,000t-3,000t RAS facility for shrimp. However, if the shrimp facility proves to be successful, the company is then looking to go as big as 200,000t.

The plans have been in the making for some time, but it's coming to crunch time for approval in the sprawling $60 billion-turnover group, which has over 200 companies in China alone, where it is known as "Zheng Da".

CP has remained silent on the plans and did not respond to requests for comment,  however, back in May, CP was displaying a plan for a RAS shrimp farm in Shandong province at an aquaculture conference in Zhuhai, a city in China's Pearl River delta. 

It's thought a decision on whether to go ahead with the plans could come in the next couple of weeks from the upper echelons of the sprawling feed, food, plastics, telecoms, and retail group founded by Thai Chinese billionaire Dhanin Chearavanont.

The plan is being considered by a Chinese division of the conglomerate that has nothing to do with Charoen Pokphand Foods (CP Foods), which operates its shrimp businesses in Thailand and Vietnam, sources said. CP Foods confirmed to build a small RAS shrimp farm in the US state of Florida. 

The Thai giant is not the only company looking to build RAS facilities in China for salmon. 8F Investment Partners, which is also planning facilities in Europe, the US and Japan, is looking at building five 20,000t RAS facilities in the country.

Several other big companies are also looking at similar projects in China, and also other Asian countries, in salmon and shrimp.

Global RAS boom

If CP goes ahead with the plans, the giant will become the latest entrant to the multitude of RAS projects being planned globally.

In shrimp, Nippon Suisan Kaisha-backed Seafarms Group plans to cultivate shrimp over 10,000 hectares using modern technology in northern Australia. Viet Uc Seafood Corp., Vietnam's largest shrimp post-larvae provider, also plans to build hundreds of modern covered farms. 

For salmon, there are many more projects. At the end of September, Martin Fothergill, a co-founder and partner with 8F, said the private equity is raising capital for the China portion of its $1.6bn plan to produce 260,000t of salmon in RAS farms globally.

8F has almost raised the $300m needed for the first phase of its plan, which will finance 10,000t RAS farms in Europe and Japan and a 20,000t site in the US state of Virginia, adding to its small, existing site in Poland, Fothergill told after a presentation given to potential investors in Oslo, Norway on Sept. 23. 

CP in talks with Aquamaof to build major RAS shrimp facility in China

The next phase will be to raise more capital for the China portion of the Pure Salmon plan, which will see 100,000t produced across five different sites. In China, 8F is looking to build 20,000t sites in Beijing, Chengdu, Shanghai, Guangzhou and Shenzhen, home to 21m, 8m, 24m, 13m and 13m, people, respectively. "We're looking globally at high population, high consumption, high wealth areas," he said.

At the end of August, two more new planned RAS farms was presented. 

During the Trondheim, Norway-based AquaNor trade show, Vikings Label, a Norwegian startup, announced plans for a RAS salmon farm in Saudi Arabia. Vikings' CEO Lukas Havn said his firm planned to build a salmon farm with a capacity of 5,000t in the city of Jeddah, on the shores of the Red Sea. According to Havn, the farm will cost roughly $80m to build and will be built with the intent to expand beyond its immediate 5,000t target within a few years.

A few days later, UK-born salmon processing veteran Jonathan Brown is  seeking to raise $150m and secure a partner for a fully integrated, "egg to retail pack" RAS farm on the East Coast of the US.

Brown, who sold the US Macknight Food Group smoked salmon plants in Florida and Nevada to private equity McCarthy Capital earlier this year, has purchased a 90-acre site in the state of Maryland, which is "fully licensed" to farm up to 60,000t, he said. 

Brown's American Salmon is the latest RAS salmon project to be announced in the US since Atlantic Sapphire got going with a massive farm in Florida. 

In May, in the middle of the Seafood Expo Global trade show in Brussels, Belgium, Atlantic Sapphire issued a statement to the Oslo stock exchange revealing a big increase in its volume target. Originally, Atlantic Sapphire said that it plans to supply 90,000t of Atlantic salmon from its land-based farm near Miami by 2025. That would serve almost a quarter of current US demand. The company now plans to supply 220,000t by 2030, a figure that would serve more than half of the US market.


Then, Nordic Aquafarms, a Norway-based company, is planning a 33,000t RAS facility in Maine, as well as a 22,680t operation in California. The first phase of the Nordic Aquafarms Maine operation will produce 13,000t. Nordic Aquafarms announced the Maine farm in January 2018, just before US firm Whole Oceans revealed a plan to build a 5,000t RAS salmon farm on the site of a former paper mill. The company plans to eventually scale up the site to 10,000t and then 20,000t. It ultimately wants to produce 50,000t of salmon per year.

Another firm, Aquabanq UK, has also decided on Maine for a RAS facility. On June 11, 2019, Aquabanq announced it was ready to start building after two years of development, planning, and preparations. The plan is to be able to produce around 3,600t of fresh Atlantic salmon per year by 2022. By 2025, it aims to have scaled up to 10,000t.


Pure Salmon believes RAS projects over 20,000t are too risky


Not everyone is looking to scale up in Maine. In February the owner of the first company looking to farm salmon in a RAS in Maine, Palom Aquaculture, was open to selling. 

In Wisconsin, there is a much smaller operation, Superior Fresh, which announced plans in July to increase its production volume from its current 72.5t annually to 680t annually over the next 24 months. The wealthy Wanek family, owners of US furniture outlet Ashley Furniture HomeStore, built the recirculated aquaculture system facility and aquaponics greenhouse with an investment close to $100m.

 

Reproduced with permission, source: Undercurrent news

 
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