Eco Blue Seafood targeting Chinese mud crab demand with new Indonesian RAS
An ambitious new aquaculture enterprise is aiming to produce mud crab in a sustainable manner using European technology in Indonesia for the Chinese market. Roskilde, Denmark-based Eco Blue Seafood is planning on commencing construction of a recirculating aquaculture system facility in Indonesia next year. The firm is working with the Technical University of Denmark (DTU) and their Aquaculture department on nutrition during the hatchery and nursery phases, while also engaging Danish Hydraulic Institute (DHI) as consultant on water resources and technology. The project’s ‘turnkey partner’ is Danish company Alpha Aqua. In an interview, Eco Blue Seafood CEO Martin A. Pedersen told SeafoodSource the firm is hoping to tap private and public investors in Asia, Europe, and the U.S. to finance the project.
SeafoodSource: What is the basis for your profitability thesis in targeting the mud crab market in China?
Pedersen: We know from our global seafood trading partner and their people in China that premium-quality, live, extra-large mud crabs are in high and continuously increasing demand, which is also reflected in market prices. Furthermore, we follow what is going on in the Southeast Asia region and where most of the supply of mud crab is being exported to mainland China, Hong Kong, Korea, and Singapore. Whether demand is high or supply is low is in the eyes of the beholder, but there is definitely a huge gap between the two, and Eco Blue Seafood intends to fill it.
SeafoodSource: Who is your retail or distribution partner in China?
Pedersen: Our trading partner in China is the Sirena Group from Denmark. They have been trading primarily frozen seafood to Chinese customers for more than 30 years and enjoy great brand loyalty and recognition. Live mud crab from Eco Blue Seafood will be sold to the highest bidder, but the primary focus is modern fresh seafood supermarkets.
SeafoodSource: In what part of Indonesia is your project located?
Pedersen: The Eco Blue Seafood sustainable production setup will be located in the southern part of the Riau Islands, very close to Batam and Singapore, the latter being both a strategic trading and R&D hub for aquaculture seafood in the region. Being a primarily export-focused company, easy logistics and being close to the market is key. China is by far the largest consumer of live mud crab, but with the Singaporean national dish’s primary ingredient being mud crab, this is definitely a very interesting market, too.
SeafoodSource: What is the investment in this project and what are the main sources of this investment?
Pedersen: The full investment to develop a total land area of approximately 1,000 hectares is USD 8 million (EUR 6.9 million). Eco Blue Seafood is open to different funding options. We are currently in dialogue with the Asian Development Bank, Danish Industrial Funds, private investors, accelerators, and venture capital. These represent anything from loans to equity investments. Finally, we have potential investments from strategic [sales and marketing and technology] partners, which would be the optimal investment partners for our company. We are looking for investors who are willing to commit to a minimum of seven to 10 years, and in return, they will get a very interesting return on their investment.
SeafoodSource: How unique or different is your RAS technology in Asia in mud crab production?
Pedersen: We are currently working closely with our Danish strategic RAS technology partner in order to determine exactly which technologies will have the biggest positive effect on the hatchery, nursery, and grow-out performance. Different RAS setups are being tested, but a floating RAS solution could be the end result. The most important thing is biosecurity and easy scalability. There is no doubt that Eco Blue Seafood will be bringing in much more technology for monitoring, traceability, power consumption, etcetera, and a much different laboratory approach to mud crab farming. But what we believe will be the biggest game-changer is our overall sustainable approach to aquaculture and our “Hatchery2Harvest” concept.
SeafoodSource: What is uniquely sustainable about your Hatchery2Harvest model; Are there similarly vertically integrated aquaculture models already in China?
Pedersen: High-quality, disease-free, live, extra-large mud crab is our brand, and for us to be able to guarantee this, we must be in control of every step from broodstock to harvest, packaging, and transportation. At Eco Blue Seafood, we even work on horizontal integration as well, with our production concept creating several related spinoff opportunities. Chinese consumers prefer to eat imported seafood, because of the lack of trust towards local manufacturers. Denmark is a pioneer within organic food, and mud crab from Eco Blue Seafood will be grown according to the very same principles. We will be bringing the world’s best mud crab to consumers, and we will be doing it with respect for the environment, our climate, the wildlife, and the local communities where we operate. This in the end is what makes Eco Blue Seafood and our Hatchery2Harvest concept unique, because no one combines a healthy business and an urge to do good like we do.
SeafoodSource: Is renewable energy still a big part of your plan?
Pedersen: Renewable energy and green energy consumption are absolutely still part of our concept. We are working closely with solar power developer German ASEAN Power on utilizing some of our land area for solar parks and potentially floating panels. Eco Blue Seafood has an ambition to run the entire hatchery and grow-out process on solar power and even feeding excess power production into the local grid, thereby helping the local community make the change to renewable energy sources.
SeafoodSource: Will you aim to obtain any ecolabel or sustainability certification recognized in China?
Pedersen: It is one of the company’s main ambitions to build a concept and a company worthy of especially the Aquaculture Stewardship Council certification. Our sales and marketing partner enjoys a very strong brand in China, having been present in the market for more than 30 years. This will of course rub off on Eco Blue Seafood, but we want to establish a new standard within commercial mud crab aquaculture which the world has never seen before.
SeafoodSource: Have you encountered any hesitance from investors in Asia worried about the technology, species, diseases, insurance, or other issues specifically related to aquaculture?
Pedersen: We think that many investors all over the world are very keen to invest in aquaculture, but we also experience that most investors, if already involved in aquaculture, tend to stick to one species. If you are into salmon, you are into salmon; If you are into shrimp, you are into shrimp. That being said, we do see a tendency towards more Asian investments into aquaculture in general. Asia represents some of the largest and fastest-growing populations, who on top eat a lot of seafood. With seas being increasingly overfished, aquaculture is the only solution. But again, most new investments are made into the most dominant cold- and warm-water species. Aquaculture in Asia is primarily warm-water, which is a catalyst for viruses and diseases if broodstock, water quality, biosecurity, and monitoring is not under control. Attempts to improve Asian aquaculture are being made as we speak, especially within shrimp. But technology does not change the fact that shrimp are very vulnerable animals. We encounter all the same risk-related questions from investors all over the world, but we have answers ready for all of them, and we have absolutely no doubt that our concept, our species, and our technology will be a great success and a thing of tomorrow.
SeafoodSource: Will you work with e-commerce or traditional retailers in China?
Pedersen: The initial plan is to sell solely through the retail channels of our sales and marketing partner. They have an extensive network amongst high-end fresh supermarkets demanding premium-quality, live, extra-large mud crab on a continuous basis. But there will be many other potential buyers and client segments both within China and across the Asian region. Furthermore, mud crab is in demand in Southern Europe and North America, both live, frozen, and processed, so market possibilities are endless. At Eco Blue Seafood, we also have several commercial “next steps” involving selling directly to luxury hotels and high-end restaurants, which have their own “vertical farming” setup in order to provide their guests the ultimate fresh mud crab experience. With the proper logistics setup, e-commerce and home delivery could even become an option, but this is further down the line.
Photo courtesy of Eco Blue Seafood