Rob Piasio is the chief executive officer of Whole Oceans, a Maine-based firm that announced in February it is seeking to build an indoor recirculating aquaculture system in Bucksport, Maine, to produce up to 50,000 metric tons of farmed Atlantic salmon annually. Piasio sat for an exclusive interview with SeafoodSource on Tuesday, 3 April.
SeafoodSource: Can you describe your background and how you arrived at the idea of building an indoor salmon farm in Maine?
Piasio: I grew up in the Portland, Maine area. After college, I started my career in investment banking first in New York, and later in London. When I was in London, I was working on a project involving financing for Marine Harvest, and I learned a lot about aquaculture and found the industry very compelling. I really liked the story, the economics, and the opportunities within aquaculture. So I flagged that for future reference.
In 2011, the banking industry had changed quite a bit, so I decided to take some time off, and look for an alternate career path. One of the first sectors I looked at was aquaculture. I engaged pretty aggressively in researching the sector, different species, different technologies, the major players, and really starting with some macroeconomic research from the United Nations and World Bank. Through that process, I quickly settled on Atlantic salmon and utilizing land-based RAS [recirculating aquaculture system] technologies. Once that determination was made, the next phase was locating a potential site. Given the fact that Maine water is indigenous [habitat] for Atlantic salmon, I thought it was perfect for land-based aquaculture centered on Atlantic salmon. My family was still here and I reconnected in Maine starting in 2012, when I started looking for sites and laying the groundwork for Whole Oceans in the state.
As the years progressed, the network expanded to include my business partners…but also on the regulatory side. Very early in our exploration for developing this business in Maine, we engaged the regulatory community in Augusta [Maine’s capital], with a partnership mentality to work together to develop the permitting structure. [We wanted to] navigate the regulatory environment to make sure we were respecting the process, that we understood exactly what issues there were and that we could work together to address them. That’s been going on for years, we’ve had a great rapport and relationship on that, that kicked off more formally with our public information meeting in Bucksport a couple of weeks ago. That meeting was meant for a number of purposes, one of which was very important to us – wanting to relay more information in detail about the project to the community. We had already engaged the community, but more on an individual basis, so it was great opportunity for us to share more information. It’s critically important for us to be a part of the community. These are going to be our colleagues, our neighbors, and we really wanted to develop this sense that we were neighbors, and working together, and felt reassured and encouraged by the response we received from that meeting. Another purpose of that process was to kick-start our formal permitting process, which is now underway.
SeafoodSource: How do you think the public meeting went overall?
Piasio: The meeting was great. There were about 250 people there and it lasted around 2.5 hours. I think there were some very thoughtful and challenging questions, which we appreciated. We wanted to give everyone the space and time to answer them as thoroughly as possible. We want to show them, here we are and this is what we’re up to. We want to be good neighbors and we’d like to see how we can get together and make this happen. And ultimately, if they’re going to judge us, we want them to judge us by what we do and not what we say.
SeafoodSource: What attracted you to a RAS system?
Piasio: As far as land-based technology goes, and evaluating that versus other aquaculture methodologies, each has their pros and cons. Land-based technology has been around for a very long time, and is utilized extensively for Atlantic salmon. In the past, that process has gone from grow-out to basically smolt, then the fish were transferred to offshore net pens. Relatively recently, that production cycle been extended into full production of salmon in land-based systems.
One of the driving factors for us is what we believe to be a reduced environmental footprint. Additionally, there is an evolving economic equivalency between the two technologies – previously land-based solutions for full grow-out were not cost competitive versus other methodologies. That’s changing fairly rapidly as improvements in land-based technology continues, efficiency is increased, and the [capital expenditure] for land-based systems is dropping rapidly.
The potential for expansion of offshore aquaculture is to some extent limited by the availability of new permits, particularly in respect to North American production and especially with respect to U.S. domestic production. So if you’re going to grow the domestic salmon production market, you have limited potential to do so with offshore operations. And the universe of available technologies is somewhat narrow and to some extent confined to land-based solutions. So what’s happening is this economic equivalency between land-based and offshore systems, combined with the potential for U.S. domestic production growth. That’s driving this expansion and acceleration into land-based salmon in the U.S.
SeafoodSource: Were you aware of the other two recently announced RAS projects in the U.S. – those planned by Nordic Aquafarms in Maine and Atlantic Sapphire in Florida?
Piasio: Yes, in particular Atlantic Sapphire’s. We share the same technology provider, Danish firm Billund Aquaculture. We’re very close with Atlantic Sapphire – we actively share information, and it’s just a great relationship for us. [We’re] less close with Nordic Aqua, however, we’ve been working on this for six years in Maine, and as part of that work, one aspect we’ve actively sought to develop in Maine is this sort of magnet or cluster-type of mentality for land-based aquaculture. [Nordic Aquafarms' development] will serve many advantages for our cluster, that we will be able to leverage together – leverage suppliers, feed agreements, all sorts of input costs. In addition, and very importantly, we can leverage workforce development together.
Whole Oceans’ goal is ultimately to capture 10 percent of the U.S. salmon market, so 50,000 metric tons. That’s not going to be done overnight, that’s a very long-term strategy – a multi-decade strategy, frankly. One of the challenges facing the expansion will be availability of human resources, people who know how to run and operate land-based farms. We recognize that and looking into the future 10 years from now, we need workforce development in place now. Here’s where a magnet of like-minded operators can work together to develop that workforce and in so doing, create an opportunity for the state beyond Whole Oceans, frankly, to be a magnet for all sorts of land-based production, starting with being the global center of expertise. We’ve always looked at this project as bigger than Whole Oceans, and as an opportunity for the state - we believe that market potential for production of domestic production of Atlantic salmon is so vast that it can accommodate many operators. Ultimately, on balance, we’re better having more operators in the state and having this magnet, along with information- and data-sharing, that we can all leverage.
Our vision is not dissimilar to how Norway was able to develop its Atlantic salmon industry. In the early days of that technology, there was a lot of information sharing going on, and that may be cultural, but it was used to the advantage of the entire industry in that country, and puts them in a position today where they’re in front. So it works.
SeafoodSource: Why did you select a site in Maine, versus somewhere closer to major East Coast markets? What were the major factors that made you zero in on Maine early in the process?
Piasio: First and foremost is respecting the requirements of the species. The Penobscot River was at one time one of the most dense Atlantic salmon spawning grounds in the world. The obvious explanation for that is the water is perfect for Atlantic salmon – temperature, salinity, and so on. So from a water point of view, there’s hardly a better place than Maine to grow Atlantic salmon. Additionally, once you isolate Maine as a potential water source, Maine has a multigenerational culture and history in seafood. It knows seafood, it’s engrained in the culture in the state, and so accessing that culture, that knowledge, that potential human resource pool is very attractive as well. As I mentioned, these are somewhat new skills, however, you’re not starting from scratch by any stretch. So between that, Bucksport’s existing infrastructure and access to water sources, plus the existing zoning at the site, and the fact that the town wants this business there, the community wants us there – those factors all played a role in ultimately why we settled on Bucksport for our home.
SeafoodSource: What efforts have you made thus far regarding workforce development?
Piasio: Some of the educational workforce development we're working with include the University of Maine-Orono, Eastern Maine Community College, Maine Maritime Academy and we met with Barry Costa-Pierce from the University of New England just this morning. The workforce development opportunities here, plugging into an existing culture of seafood in the industry, will be a critical part of our development.
SeafoodSource: What are you planning to use for your water source in Bucksport?
Piasio: This is a key question. Obviously, when we were looking for a site, this was one of the top questions on our list. Before we settled on Bucksport, we spent three years looking around Maine for potential sites. It’s fair to say we looked at every potential site in Maine. Bucksport, by a wide margin, was the best. One of the reasons is water supply, so with the operation of the paper mill at the site previously, they used both salt water and fresh water for their papermaking requirement. As a result, they built extensive infrastructure to access those two inputs. The saltwater comes from existing intake infrastructure from the Penobscot River, and the fresh water comes from a pipeline directly to Silver Lake. The mill used around 72 million gallons a day of saltwater and 18 million gallons of capacity from Silver Lake, which is just a phenomenally large capacity and many multiples of whatever production potential we would put in Bucksport.
SeafoodSource: Do you have plans to install any filtration infrastructure to treat the water going into the farm? There have been news reports that some local water sources have levels of contamination from previous industrial activity in the area.
Piasio: Both system inputs will have extensive water conditioning, which is essentially a firewall between those water sources and the farm. Before any of that water gets into our farm, it will be treated and any contaminants will be removed, including mercury. The mercury issue is obviously very important, but I think there’s often a misconception about how mercury accumulates in fish – it's primarily through bioaccumulation. Of course, the ambient mercury in the river’s waters is low to negligible, but we’ll have systems to remove it anyway. But the fact that we’re controlling the feed that the fish are eating is really where the mercury bio-amplification occurs, so there’s going to be zero mercury in the fish.
SeafoodSource: How are you handling your effluent?
Piasio: We’re working with our regulatory partners, one of which is the Department of Environmental Protection (DEP). We’ve been supplying the DEP with our forecasted effluent chemistry, and they’ve been working with us on developing parameters on that chemistry. I think it’s fair to say, in general, that with respect to what the discharge chemistry was previously at the site, the DEP is very excited about having a more environmentally-friendly business going on there.
SeafoodSource: Speaking of the DEP, aquaculture permitting is a complicated process in the United States, especially as individual states retain such a high level of control. Do you feel confident in your relationship with the state of Maine?
Piasio: I do. Our approach has been patient and deliberate, so from a regulatory perspective, it has been important for us to work with the state to develop long-term solutions. We intend to be the next 100-year industry in Bucksport. That requires long-term partnership, agreement, and understanding with the state. At every step of the way, we wanted to make sure everyone was very comfortable and fully on board with what was required from the regulatory environment. We’ve had the great pleasure to work with essentially every regulatory commissioner directly, including the governor and the governor's cabinet, to make this project happen. We’ve arrived at this point based on a lot of effort by Whole Oceans, but there’s been a lot of effort all around from the state, and it has been a constructive and very healthy process.
SeafoodSource: What is your funding model?
Piasio: We’re a private company, so to a large extent that’s confidential. We have a long-term strategy of 50,000 metric tons (MT) of production. That is a long-term project, and I don’t care what capital connections anyone purports to have, that’s going to take a long time. We are not fully funded to get to 50,000 MT. However, we are fully funded for all of our near-term goals in Bucksport.
To get to the first 5,000 MT, it will cost roughly USD 75 million (EUR 61.1 million). Our 20 year goal of 50,000 MT, by the time we’re out there, the cost of production will be dramatically different than where we are now, so it would be essentially a fruitless exercise to forecast its cost. But in today’s dollars, that’s in the billions.
SeafoodSource: Are you applying for any grants or incentive programs?
Piasio: We are working with the state on various incentive programs. That’s not why we selected Maine or Bucksport, although the state has been very creative and aggressive to the extent possible in helping businesses start up in the state, and has extended some of those structures to Whole Oceans, and we’re exploring their appropriate application to the project. But that’s not driving our decision-making.
SeafoodSource: What is your timeline for the different phases of the project?
Piasio: We’re starting with a 5,000-MT goal. If you’ve been to Bucksport, you’ll see that the site has some elevation. One of our first goals is to level that site to be able to build the facility. We expect to start that in August of this year, pending some site diligence that we’re conducting now. We’re working with a local engineering firm on determining the exact location of the facility, which will inform our site preparation, which is to begin in late summer or early fall of this year. The goal would be to start construction prior to the winter, so we can get our concrete in before bad weather arrives, in which case we can be erecting the building, working inside through the winter. Typically speaking, from the time you start construction, it’s approximately a year before we can start to populate the tanks with fish, and then of course roughly two years’ time once you put fish in the tanks. So all-in, three years from the time you start construction until first harvest.
SeafoodSource: Will the facility look anything like Atlantic Sapphire’s, or is the design different?
Piasio: Atlantic Sapphire is using a different phasing strategy, so they intend to build more capacity in their first phase, meaning theirs will be larger, although, scaled they will look somewhat similar. However, as we intended to illustrate in our film, Whole Oceans is sensitive to the visual impact of the facility as well, so our goal is to utilize landscaping and architecture to minimize the visual appearance of the facility, which will be in contrast what they’re looking to do in Miami. In addition, we’ll be constructing a coastal walking trail, as part of our efforts to create these natural spaces which can coexist with what we’re doing. This is aimed at public engagement in the project. We’re hoping the public comes into our facility and wants to learn more about what we’re doing there. We want them to get excited so as to generate some interest and education in what we’re doing. Of course, the public’s access to our actual production facilities will be limited to ensure they are kept very biosecure.
SeafoodSource: What’s your marketing strategy?
Piasio: This project, as a start-up, is capital intensive. We have to have some assurance we’ll be in a market segment where we can sell our product. For us, that focus didn’t stop with our comfort level being able to sell the product; we went several steps further and have signed a pre-placement agreement, a 10-year agreement with a distributor where we can sell up to all of our production to this distributor. So essentially, we have pre-sold all of our inventory, and the plan for now is to sell our fish head-on, gutted. We did retain the right for a small portion of our production over that period to sell locally under the Whole Oceans brand. Part of the reason for that is because we believe the more consumers are aware of their fish source – and the technologies used to grow it, the production methodologies, what the fish are eating, how they’re grown, etcetera – the more demand that will create for land-based production. That will be a process that will take some time to develop that awareness, but it is part of our long-term strategy.
SeafoodSource: Who is the distributor with whom you’ve signed the agreement?
Piasio: That’s confidential. However, the basis of that conversation is the attractiveness of domestically grown salmon. That’s sort of the fundamental driver of that conversation. They like the traceability, low carbon footprint, reduced transport costs, freshness, we can offer.
SeafoodSource: Are you looking at where salmon prices are at right now? Does that affect your business currently, or are you too far out for it to be of any concern?
Piasio: Absolutely – we monitor salmon prices daily. One of the attractive aspects of salmon is that it’s a relatively transparent and liquid market with Nasdaq futures available for trading and hedging and price discovery. We will be actively using hedging tools like Nasdaq futures to hedge our pricing exposure. Upwards of 25 percent of the landed wholesale cost of salmon in the U.S. is freight, so we feel that’s another driving force in the expansion of domestic production, is this freight savings, and it’s a substantial portion of the wholesale price. So we feel that we will be very competitive within the spectrum of import pricing competition.
SeafoodSource: What’s your plan for your use of aquafeed?
Piasio: We haven’t ultimately decided on the specific formula we’ll be using. There are lots of different options that run the spectrum, from organic to sustainable. There’s a misconception that conflates the two – in reality, oftentimes the most organic feeds are the least sustainable and have the worst fish-in, fish-out ratio. But to really stay on top of the latest knowledge in the field takes a tremendous amount of work invested into feed research.
The top thing we will prioritize is fish health – that has to be first and foremost. Another thing we’ll be focusing on is consumer preference, and of course factoring into that will be cost, and advances in ingredient technology. Wherein it’s proven you can substitute algae oil for fish oil, it’s digestible, the fish like it, and it’s economic, we will certainly explore that. Insect meal is another exciting sustainable feed that’s rapidly developing. So that’s a discussion that will be ongoing throughout the life of Whole Oceans, and in fact it’s an iterative process of optimization that will never end.
SeafoodSource: One other major benefit of RAS systems is that, theoretically at least, they’re naturally more biosecure than open-pen systems. What measures will you put in place to ensure biosecurity at the Bucksport facility?
Piasio: Biosecurity is absolutely of concern. Any disease is of concern, whether it occurs in a land-based system or in net pens. We are working with Kennebec River Biosciences to develop a preventative fish health and monitoring program, which we’ll be actively using on the farm. In addition, we’ll be using a firewall on our water inputs, which will be critical to mitigating disease risks and is a very important part of our engineering puzzle. We’ll also be implementing other enhanced biosecurity measures to prevent any pathogen introduction to the farm.
SeafoodSource: Why did you select Billund Aquaculture as your design partner?
Piasio: We spent a long time figuring out who our technology providers should be. I mentioned that this technology has been around for a long time for Atlantic salmon, but technology concerning full grow-out in these systems is much newer. In selecting our potential technology provider, we looked at the track record of the companies doing this. There are some wonderful aquaculture engineering and design firms around the world, but there are very few that have Atlantic salmon land-based technology experience, and there’s even fewer that have track records for full grow-out. In our estimation, the firm with the longest track record of success is Billund Aquaculture.
We have a best-in-class philosophy in every component of our business. We selected Billund because we thought they were the best for full grow-out of Atlantic salmon. Obviously, Atlantic Sapphire does as well. So while our culture or our model is perhaps is unique to Whole Oceans, the Billund connection is key to fulfilling our mission of creating an economically and environmentally sound, sustainable business to capture 10 percent of the U.S. Atlantic salmon market.
