Funding the future of aquaculture
Aquaculture can be a risky business, in part due to the natural volatility of the sector and the potential for losses due to disease, said Rabobank’s Gorjan Nikolik during a panel discussion at the 2017 Global Aquaculture Alliance's GOAL Conference last week in Dublin, Ireland.
“And there have been a few high-profile bankruptcies in the past,” Nikolik said. “However, we should not rely too much on historical events, as technology is developing fast. What the aquaculture sector needs is specialised investors who dedicate time and effort to understanding its complexities and help it to develop.”
Discussing how to make wise investments in innovative technologies and services that enable the responsible growth of aquaculture, Nikolik was joined by Michael Donner from Tinicum Incorporated and Pontos Aqua Holdings, a private equity impact investor; Carsten Krome from Alimentos Ventures, which invests in fish nutrition, health, technology and genetics; and Jamie Stein from Devonian Capital, which has an interest in land-based aquaculture.
Acknowledging that aquaculture investment requires considerable knowledge of the arena in order to reduce risk, panelists agreed that there is long-term value to be gained from investing in environmental sustainability. Recirculating aquaculture systems (RAS) in particular were seen as being a promising area for investment.
“A larger percentage of fish and shrimp are now grown indoors, for part or all or their lives, which brings confidence to the space. However, better transparency and understanding of failures is vital if we are to attract more investors. Fish dying is a powerful deterrent, and too many failures has left a legacy of caution,” said Stein.
Donner said he believes that as RAS technology develops and becomes more adaptable and affordable, that greater interest will be shown by investors in this exciting sector. An understanding of the optimum scale of RAS farms was also required.
Krome admitted that his company prefers to focus on technology and stay away from funding farming operations. “At present we see them as too unpredictable, and too reliant on people who may not be reliable, whereas we understand technology, and there is much work to be done there,” he said.
Offshore farms have the potential to be a game-changer for the marine finfish industry, but such developments are also new, with technological problems and licensing issues still to be overcome. However, growing fish in open waters has been shown to have beneficial biological implications, which was welcome news to potential investors.
“Experimental farms in for example Mexico, Baja, Norway, and the Caribbean still need to prove their economic viability as fully commercial ventures, but the potential is very exciting,” said Donner.
Solutions for two problem areas that would boost confidence in aquaculture are improvements in pest management and greater advances in sustainable feed.
“We urgently need more sources of EPA and especially DHA from innovative sources and work is being done in this field, but more breakthroughs and a greater understanding of the cost implications would be most beneficial,” Krome said.