13 minute read
Sandy Neil
Smart money
Fish Farmer reports on the funds investing in innovative aquaculture and the projects they are investing in
BY SANDY NEIL
BY 2030, the world is expected to eat 20% more fi sh than in 2016. This increase can only come from aquaculture because we are already exploi� ng wild fi sh stocks to their limits. Mee� ng the world’s growing demand for fi sh while simultaneously sustaining our environment will require a radical transforma� on of global aquaculture. This is why investment funds focused on innova� on in the sector, such as Dutch company Aqua-Spark, exist.
Aqua-Spark, based in Utrecht, launched in 2014 with a mission to transform the global aquaculture industry into one that is healthier, more sustainable and more accessible. It invests in aquaculture companies across the value chain, spanning farming opera� ons, alterna� ve feed ingredients, disease-ba� ling technology and consumer-facing aquaculture products.
Since 2015, the fund has invested in 24 complementary small and medium-sized enterprises. Thus far, Aqua-Spark has €275m (£229m) in assets under management dedicated to investment in elements of the aquaculture industry that will make fi sh farming sustainable.
For example, there’s growing interest in seaweed farming because of its ability to absorb carbon: macroalgae such as seaweed can grow as quickly as two feet a day, sucking up CO2 much faster than trees.
While some projects aim to permanently sequester that carbon by sinking seaweed to the ocean fl oor, algae can also be used to make products from fi sh feed to human food. Grown at a large scale, seaweed could replace some of the crude oil used to make jet fuel or plas� c. Up un� l now, however, it’s been so expensive to grow that it can’t compete with fossil fuels.
In one project funded by Aqua-Spark, a “sea tractor” harvests and replants carbon-capturing seaweed at a series of fl oa� ng farms off the coast of Bali, Indonesia. The system is designed to help the � ny seaweed industry scale up.
“Agriculture on the sea is in its infancy,” says Shrikumar Suryanarayan, co-founder and Managing Director of Sea6 Energy, the India-based company
Top: Sea6 SeaCombine tractor vessel Left: Sea6 seaweed farm, Indian Ocean Opposite from top: Tilapia; Lake Harvest � lapia sign; Lake Harvest � lapia harves� ng; Lake Harvest � lapia cage site
that designed the “SeaCombine,” the tractor-like machine now in use at its Indonesian seaweed farm. In September, the company announced a new US $9m (£6.7m) funding round led by Aqua-Spark.
“Tradi� onally, seaweed produc� on is labour intensive, making labour costs the main components in the cost of produc� on,” Suryanarayan explains. “Developed to tackle this problem, the SeaCombine is a fully mechanised harves� ng and seeding catamaran. The SeaCombine can farm anywhere in the oceans.”
Another Aqua-Spark investment, Oceano Fresco in Portugal, is a sustainable seafood company using innova� ve aquaculture techniques to grow highquality bivalve species as an alterna� ve to other animal-based protein sources.
Oceano Fresco has built a state-of-the-art biomarine centre (including hatchery) and it set up the world’s fi rst open-sea clam farm off the coast of the Algarve. It farms na� ve European clams, namely of the species Venerupis corrugata and Ruditapes decussatus, both currently in decline and threatened by exo� c and invasive species, but also highly sought a� er. These, the company says, are among the most sustainable, naturally healthy and tasty foods available anywhere in the world.
In October, Oceano Fresco announced a €6.1m (£5m) Series B round, one of the largest known venture investments in the sector, co-led by Aqua-Spark and Semapa NEXT, the venture arm of the Semapa industrial conglomerate. With this investment, it will grow its opera� ons and build its fi rst storage and packaging facili� es. Ini� ally, company expansion will focus on Spain and Portugal while laying the founda� on for a global business.
Aqua-Spark has also turned its focus on � lapia and ca� ish farms in Sub-Saharan Africa.
“Substan� al investment is required in � lapia farming to both realise its poten� al and, at the same � me, ensure it plays a role in mee� ng the foreseen surge in demand for protein in sub-Saharan Africa,” says Aqua-Spark co-founder Willem van der Pijl, as the organisa� on launched its Africa Fund to ignite sustainable aquaculture in the con� nent.
The fund will close at US $50m (£37.5m) and will grow to US $300m (£225m) over the next six to eight years.
“These ini� al investments will be the basis from which to develop and scale a regional industry,” says Van der Pijl. “The fi gure of $300m is enough to fund the cornerstone investments required to build this framework—but it’s just the � p of the iceberg.
“In our pipeline for Sub-Saharan Africa, currently around 40% of the total investment need and 50% of the opportuni� es are directly related to exis� ng and greenfi eld � lapia farms and hatcheries. But there are also opportuni� es in salmon, seaweed, ca� ish, sea cucumber and shrimp produc� on. Further, across species, a number of other opportuni� es can be found, such as black soldier fl y.
“The highest priority opportuni� es in � lapia in our pipeline lie mainly in Western Africa (Ghana and Nigeria), the north of Eastern Africa (Kenya, Rwanda, Tanzania and Uganda), and the south of Eastern Africa (Malawi, Mozambique, Zambia and Zimbabwe), but there are also plenty of opportuni� es in other countries.
“The fund’s core investments will be six to eight ver� cally integrated farming hubs (over 20,000 tonnes per hub) where we envisage that about 50% of produc� on will be through outgrower programmes. The Africa Fund will also invest in small and medium-sized farming opera� ons and the broader aquaculture value chain (including feed ingredients, technology, cold chain, marke� ng and distribu� on, gene� cs and animal health).
“The ini� al $50m allows us to fi nance a signifi cant part of the immediate funding requirement of some of the top 25 companies in our pipeline,and with $300m we’ll be well posi� oned to fi nance the longer-term future of aquaculture in Sub-Saharan Africa.”
One such company, Lake Harvest Group, is one of the largest � lapia farmers in Sub-Saharan Africa, with sustainable opera� ons in Zimbabwe, Zambia (both in Lake Kariba) and Uganda (Lake Victoria), and a distribu� on network in
Eastern and Southern Africa.
Aqua-Spark, together with NORFUND, the Norwegian Investment Fund for Developing Countries, are inves� ng US $7m (£5.2m) in the growth of Lake Harvest’s � lapia opera� ons.
Aqua-Spark says: “The farm is mission-aligned, adop� ng best prac� ces that include educa� on and training programmes for staff as well as the sale of byproducts, an� bio� c-free opera� ons and gene� c improvement.”
Tilapia farming isn’t the only aquaculture solu� on for sub-Saharan Africa’s food challenge. Ca� ish (Clarias gariepinus) produc� on is increasing at a similar—or maybe even faster—pace, according to van der Pijl.
He adds: “However, compared with the produc� on of � lapia, ca� ish produc� on is concentrated in only a few places, and most notably so in Nigeria. This is mainly due to a lack of consumer familiarity with the species in most other Sub-Saharan African countries.
“But in Nigeria, ca� ish is one of the most popular fi shes. It’s therefore not surprising that the country has become Africa’s largest ca� ish producer. On its own it produces a similar volume of ca� ish to the � lapia produc� on of the whole of Sub-Saharan Africa combined.”
Once through the fi ngerling stage, the fi sh easily survives in all kinds of produc� on systems. It can be cul� vated in low-density, simple earthen ponds, in higher-density concrete or plas� c tanks, or in even
more intensive recircula� on aquaculture systems (RAS). As long as the fi sh don’t suff ocate at the grow-out stage, which is unlikely given that they’re air-breathers, van der Pijl says, the fi sh will survive in most condi� ons as they’re not so suscep� ble to viral diseases and can thrive in harsh condi� ons. They can also survive out of the water as long as their skin remains wet.
He goes on: “In Sub-Saharan Africa, ca� ish is now increasingly produced by small, medium and commercial large-scale farmers alike. Whether ca� ish farming is a profi table business, though, depends largely on how well the fi sh is fed and the gene� c source of the fi sh.
“Although most farmers of African ca� ish in Nigeria s� ll farm in ponds, the greatest produc� on volume derives from peri-urban [that is, in areas advolume derives from peri-urban [that is, in areas adjacent to ci� es] concrete tanks, raceways and RAS. All of these produc� on systems, which can be used pre� y much anywhere in the country including in backyards, could become a major part of the solu� on to mee� ng the future demand for fi sh from the growing urban popula� on in Nigeria.”
Van der Pijl believes that with Africa’s rapid popula� on growth and urbanisa� on rate in mind, farming ca� ish in peri-urban environments is a great opportunity. The fact that ca� ish, contrary to � lapia, is o� en consumed as a smoked fi sh means that also in the downstream supply chain, the ca� ish industry off ers job opportuni� es in the processing segment.
Another European investment fund, Bluefront Equity, is the only independent, Nordic private equity fi rm that focuses solely on the seafood industry. The Oslo-based fund, founded by Kje� l Haga and Simen Landmark, invests in small and medium-sized seafood companies that can make the future seafood industry more sustainable.
“Together we will iden� fy the suppliers that have the greatest poten� al to industrialise and professionalise the seafood industry in a sustainable manner,” says Haga. The company is looking to invest in supplier companies that contribute towards increased traceability, be� er fi sh health and welfare, enhanced quality of the end product, improved hygiene and digi� sing the seafood industry.
In December, Bluefront Equity announced its second investment, in Bio Marine AS, headquartered in Surnadal, Norway. Bio Marine is a specialist in oxygen diff usion and also off ers solu� ons for environmental control of pens, including monitoring and logging, ligh� ng, pumps and lice skirts. Bio Marine expected revenue growth of 40% in 2021 compared with the previous year.
“Bio Marine is a pioneer within oxygen diff usion and environmental control of pens and tanks, with an unwavering focus on fi sh welfare. We only invest in companies that contribute to a more sustainable seafood value chain and Bio Marine fi ts perfectly with our investment mandate,” says Simen Landmark, partner at Bluefront Equity.
Addi� onal oxygen in pens is important for vascular health – and fi sh health and growth generally – and it can contribute to lower mortality rates. Bluefront Equity’s fi rst investment was in Redox, which is an ozone and oxygen specialist that develops environmentally friendly technologies that improve fi sh welfare and biosecurity for the aquaculture industry.
“The demand for oxygen and oxygen competence is rapidly growing and we expect Bio Marine to play a leading role in this development,” says Haga.
In February, Bluefront Equity announced its third investment, in Bergen-based Akvasafe. This is an inspec� on and cer� fi ca� on specialist in areas such as construc� on cer� fi cates, mooring analysis, site analysis and component cer� fi cates. Including its subsidiary Sematek, Akvasafe currently has 20 employees. Sematek is an independent tes� ng and inspec� on company that off ers inspec� on, tes� ng, verifi ca� on and technical services for materials in plas� c, steel, aluminium or concrete that are used in the seafood industry.
In the midst of all this innova� on comes a new summit from the hosts of World Agri-Tech, Future Food-Tech, Animal AgTech and Indoor AgTech, taking place in London on 14–15 June, to explore the opportuni� es and challenges in scaling aquaculture produc� on while protec� ng and restoring the ocean ecosystem.
“Blue foods” includes fi sh, shellfi sh, algae and other foods derived from aqua� c plants and animals, harvested or cul� vated in marine or freshwater environments. The industry provides protein and nutrients for more than 3.2 billion people globally and demand is forecast to double by 2050 as future consumers seek new protein sources.
Global off -shore, on-shore and land-based aquaculture producers will mix with technology leaders, startups, investors and retailers looking to build new partnerships to accelerate the development of technologies that can reduce the environmental footprint of aqua� c foods, while increasing health, welfare and yield.
“With the ever-growing popula� on and increasing demand for protein, the sustainable produc� on of blue foods – fi sh, bivalves and seaweed – is more important than ever,” says Jennie Moss, Founder and Managing Director of summit organiser Rethink Events. “The Blue Food Innova� on Summit is an opportunity to hear from a cross sec� on of industry leaders and discover technologies that will be pivotal in scaling up produc� on and reducing pressure on our oceans.”
Lae� � a Gerbe, Investment Director with blue economy investors Seventure Partners, says: “Improving fi sheries and aquaculture management is indeed crucial to ensure future genera� ons con� nue to benefi t from ocean resources and ecosystem services. We need events like this where we open up, talk to the ecosystem and collaborate.”
Jonas Ska� um Svegaarden, CEO and Partner, Katapult Ocean, which invests in ocean technology start-ups, adds: “We need new protein solu� ons to feed the world going forward. Investments into seaweed solu� ons are some of the most impac� ul investments there are. They have huge long-term poten� al for direct and secondary impact on our climate and society.”
The full programme, speaking faculty and delegate registrati on are available at bluefoodinnovati on.com FF
Opposite from top: Bluefront Equity investment, BioMarine; Kje� l Haga (L) and Simen Landmark Bluefront Equity; BioMarine oxygena� on system Above: Sea6 AgroGain fer� liser is based on seaweed
