Trans American fundraising to expand shrimp farm in Texas with Ecuadorian roots
Following a reverse merger with a publicly traded company, a shrimp-farming firm in the U.S. state of Texas is aiming to rapidly scale up production.
Trans American Aquaculture was founded in 2017 by the Granda family, transplants from Ecuador with a long history in shrimp farming. The family purchased an 1,880-acre shrimp-farming facility Rio Hondo, Texas, in the Rio Grande Valley, that had been shuttered for more than a decade and began to rehabilitate it. According to Trans American Chairman and CEO Adam Thomas, who is married to a member of the Granda family, the company is now looking for funding to convert the purchase from its current set-up as shrimp genetics research facility into a commercially productive farm.
“Where we are in the southernmost part of Texas, we're able to do two full cycles of shrimp harvests per year. We're in our fifth and sixth generations of genetic lines right now. We feel it's really a good time for us to start to tap into the public markets to get the funding for the growth that we're looking to achieve over the next few years to really take the farm into full-bore production,” Thomas said.
To facilitate its public listing, it conducted a reverse merger with Gold River Productions, Inc., a Palm Coast, Florida, U.S.A.-based maker of non-toxic pharmaceutical alternatives. The key, Thomas said, was that the company is listed on the Over-The-Counter Pink Market Exchange,
“The partners of Trans American LLC put in a significant amount of money, until the point where we decided that going public would be the probably the best avenue for us to fund our growth going forward. We chose this transaction with Gold River Productions because it’s a funding vehicle,” Thomas said. “Being able to tap into that market is something we've been able to successfully do over the last couple of months since we went public.”
As part of that transaction, Trans American announced the appointment of a four-person board of directors comprised of Thomas – a former vice president at JPMorgan Chase, Luis Arturo Granda, Bolivar Prieto Torres, and Jeff Sedacca. Granda and Prieto Torres are the general manager and president, respectively, of Excellaqua, one of the largest shrimp hatcheries in Ecuador, with production of more than 400 million postlarvae annually. Sedacca is the former CEO of Sunnyvale Seafood and current CEO of Sterling Caviar.
“I have a fair amount of experience over the years with this farm. I’ve bought shrimp from this farm, and I was part of a team that actually leased some of the farm at one point. So it's always been on my radar screen, and I knew someday, somebody was going to take the thing and make it work,” Sedacca told SeafoodSource. “The fact that I have experience with this farm, and that people like Adam and his group are friends of mine – I know they know what they're doing, they are experienced shrimp farmers, and it fits the model that I'm trying to work in, which is promoting American aquaculture.”
Thomas said the company hopes to soon begin stocking 500 acres of ponds at the farm with postlarvae developed onsite over the last several years in a hatchery built in 2019 and nursery facilities constructed in 2020. Once operational, Trans American is aiming for two annual harvests of one million pounds each of head-on shrimp, with a stocking density of 10 to 12 animals per square meter.
Once successful, there’s an additional 650 acres of ponds at the farm that require rehabilitation to be suitable for commercial aquaculture, and Thomas said his company plans to commence that work in 2024. By 2025, the plan is to add intensification technology including auto-feeders, auto-aerators, and other technology that can bring stocking densities to 20 to 30 animals per square meter.
Trans American doesn’t have plans to build out processing capabilities, as there are already a number of processing facilities in South Texas, including one 30 minutes from the farm. Thomas said he also sees an opportunity to sell fresh shrimp into the huge and hungry domestic market in Texas, via Austin, Texas-based Whole Foods and San Antonio, Texas-based HEB.
“I can sell [our total estimated production] to any of a number of distributors. I've had contacts who have said that they will buy everything we have up to two million pounds – that's been two independent distributors. So that gave us confidence to go full-bore on this project,” Thomas said. “With HEB specifically, you say it’s from Texas and they want it. I think they’ll buy pretty much all the farmed shrimp that they can get their hands from the state of Texas. With Whole Foods, it’s a step above in terms of quality, but that’s a potential opportunity for as well, because we use [Best Aquaculture Practices-certified] feed from Cargill and there's no live animal products in it.”
Thomas said Trans American will initially focus on larger-sized shrimp between 16-20 count and 26-30 count, where he and Sedacca said there is currently the best premium on domestic versus imported product. They said their prices typically sit between the average of the price of imported shrimp and the cost of wild-caught shrimp from the Gulf of Mexico.
“We think our shrimp is going to be worth a premium,” Thomas said. “Obviously, there is not a lot of domestically farmed shrimp in the United States. And because we own we have our own maturation, hatchery, and nursery facilities, we have full traceability. We can literally trace our shrimp back to which pond it was grown in, what nursery it was in, and who its parents were. We know that level of traceability is becoming extraordinarily important to the consumer nowadays, and the consumers willing it is starting to make that a price differentiator for it. Additionally, because we farm in earthen ponds and brackish water, we have natural productivity that gives our shrimp like a unique taste. So where most of Gulf shrimp is going to have a kind of salty taste, ours actually has a bit of a sweeter taste to it. The reception that we've gotten from taste tests has been overwhelmingly positive.”
Thomas said he sees the addition of Sedacca to the company’s board – and Sedacca’s pledge to invest in the company – as a major asset due to his longtime experience in the shrimp industry and his extensive network of contacts. For his part, Sedacca said it was an easy decision for him to get involved.
“We're talking about what amounts to not a lot of money here to buy into a going operation that is a known, proven venture. It’s not a start-up or a new concept – we put shrimp in the water, we produce them,” he said. “There's decades and decades of successful experience in the team. We’re really excited to be able to bring what we feel is probably the highest-quality product being grown from an aquaculture standpoint in the U.S. to the U.S. markets within the next six to nine months.”
Thomas said the company is seeking an initial USD 2 million (EUR 1.9 million) investment that will see it through its first harvest. It will need another USD 2 million to expand into the southern 650 acres of the farm, and another USD 2 million to USD 3 million (EUR 2.9 million) to complete intensification and equipment upgrades. That should get the farm to 11 million to 12 million pounds of production annually, Thomas said.
Sedacca said the relatively small investment required to scale up a model of aquaculture that has already been proven globally makes it a good bet.
“For the most part, the competition that’s out there is conceptual. It’s prototype-stage, change stage, or first approval stage,” Sedacca said. “We're proven already. We already know what it takes us to grow shrimp and what it costs us, and we already have the marketing outlets. Especially in this tightening capital market, this is not very big money and it’s investing in a proven product. And I think that the market for American-grown seafood that’s certified as fully sustainable – we haven't even begun to chip away at it yet.”
Photo courtesy of Trans American