Kingfish Zeeland expanding into US with Maine RAS facility
Kingfish Zeeland, which operates a recirculating aquaculture system (RAS) in Kats, The Netherlands with an annual production of 600 metric tons of yellowtail, has chosen the state of Maine as the site of a much larger RAS facility it plans to build by 2021 to launch the company’s expansion into the United States.
The company, founded in 2015 by current CEO Ohad Maiman, the former vice president of the Merhav Group, as well as Kees Kloet of Silt Farm, and Hans Den Bieman, the director of Sealand Aquaculture and former CEO of Marine Harvest and Heiploeg, achieved “exciting results” in 2018, exceeding its total biomass production estimates, recording brisk sales, and introducing new products, Maiman told SeafoodSource at Seafood Expo Global in Brussels, Belgium, where the company’s product received a Seafood Excellence Global Award Grand Prize for Best HORECA (hotel/restaurant/catering) Product.
The leadership team considered 22 sites along the U.S. East Coast but has narrowed their list down to two sites, both in Maine, Maiman said. He declined to say where in the state the sites are located, other than that both have access to clean sea water.
“We are hopefully 60 to 90 days away from making our final site selection,” Maiman said.
Kingfish Zeeland officially opened its doors one year ago after attracting more than EUR 20 million (USD 24.7 million) from private investors and Rabobank in 2017. Its production is now between six and 12 metric tons per week, and the company is selling out its product to the point where it recently had to begin placing limitations on buyers and “optimizing on price,” Maiman said. That hasn’t stopped it from innovating new products, including cold-smoked, individual vacuum-packed (IVP) portions and split fillets, both of which hit the market in the past few months.
Additionally, the company reached the milestone of closing the full cycle of its hatchery ahead of schedule. It now grows all of its own eggs and larvae and thus has become self-sufficient for its larval rearing, Maiman said. Despite an anticipated timeframe of three years, the company was able to complete the task in two years.
Its speedy advance has enabled Kingfish Zeeland to make expansion plans. In addition to its move into the U.S., it is also planning to expand its facility in The Netherlands to accommodate 5,000 metric tons of annual production by late 2020 or early 2021, according to Maiman. To help fund the simultaneous developments, Kingfish Zeeland launched a pre-IPO in conjunction with Pareto Securities. That financing round is nearly complete, Maiman said.
Those funds will help pay to jump-start the licensing process, which Maiman expects to take 12 to 18 months to complete in both the U.S. and The Netherlands. While it waits on funding and permits, it will add a grow-out unit with 600 to 1,000 metric tons of capacity per year.
Maiman said Kingfish Zeeland’s existing operations in The Netherlands should help smooth its application process in Maine, given that it has operational data, such as information on its water discharge amounts, that it can present as evidence of its environmental footprint, if needed.
“We know we will have to make sure to explain what we do and how we do it. We will try to present the facts and hopefully that will be enough,” he said. “We have become a favorite son in Zeeland [the site of the company’s current RAS farm], and we feel like a well-accepted part of community now. We would like to achieve the same in Maine.”
While the arrival in Maine of two other larger RAS projects – those of Whole Oceans and Nordic Aquafarms – is a sign the state has many vital components required to make an RAS project successful, it did not influence the Kingfish Zeeland team in its decision, Maiman said.
“It’s very positive to see other companies selecting Maine, and it has been helpful to see how they have been received and how their permitting process has unfolded,” he said. “But for us, there were three priorities that needed to be addressed in our site selection process. The first is access to clean sea water. The second parameter is the logistics backbone in seafood. In a way, at the local industry of lobsters and fishing in general makes it a bit easier…There are a few processors and cold-chain facilities we can cooperate with. The third priority is a willingness by state and local government to do these kind of projects. We found all three in Maine, and I think that helped by the fact that there has been some similar development activity in the past year or two. I suspect initial conditions brought them there as well. It’s a great place to do aquaculture.”
Establishing a U.S. farm is “critical” for Kingfish Zeeland if it wants to make an indent on the U.S. market, where the company currently sells just 10 percent of its volume, mostly to strategic buyers who can “pave the way for the future,” Maiman said.
“Everything is bigger in America,” he said. “While on the macro, overall level, Europe is a larger seafood consumption market, it is quite a fragmented market by member-states. The relative consolidation of the U.S, market makes it attractive. I wish I had a few extra thousand tons because I would see it there right now. But what we are doing is strategic, trying to make sure demand outpaces supply.”
With Aquaculture Stewardship Council certification and green ratings from the Monterey Bay Aquarium Seafood Watch program and the Good Fish Project, the door is open to higher-end retail players in the U.S., as well as to foodservice providers, who can use it in sushi and Italian cuisine, Maiman said.
While RAS remains controversial in some U.S. communities, Maiman is convinced RAS-grown yellowtail can gain converts in the U.S.
“The best analogy I can find is that RAS should be used like a greenhouse in agriculture. If you can grow tomatoes naturally and cheap, there’s no point in building a greenhouse. But if you have to import tomatoes from far away because local conditions are not amicable, then that changes the equation,” he said. “Using RAS for yellowtail, growing it where it does not normally grow, changes the equation. If you do it right, it enables the utilization of the best that RAS can offer in terms of giving customers something they can’t normally find.”