Aquaculture Innovation Workshop 2015 Eric Hobson, Kuterra LP Guy Dean, Albion Fisheries Ltd Gary Robinson, GRV Ltd THE VALUE PROPOSITION FOR LAND-BASED RAS AQUACULTURE Photo: Interaqua
Million tonnes The opportunity How to meet growing global seafood demand sustainably? 250 200 Aquaculture vs capture in global production 1950-2024 (FAO-OECD projections) 150 100 50 0
The Trends Supply Demand Consumer expectations Traceability requirements Willingness to pay premium RAS technology advances RAS production knowledge RAS production risk Feed costs Local food production Environmental compliance costs
Million tonnes TREND 1 Growing seafood demand Seafood consumption is growing. 250 200 Aquaculture vs capture in global production 1950-2024 (FAO-OECD projections) 150 100 50 0
1 Growing seafood demand Fishing is near its limits Photo: 'Namgis First Nation
Growing seafood demand 1 Ocean-based aquaculture faces challenges. Photo: NASA ISS
Rising consumer expectations 2 Factors people care about in choosing food 38% Chemicals, toxins, pesticides 31% Non-GMO 23% All natural, not artificial 18% Organic 15% Additives, fillers 11% Preservatives Source: Nutrition Business Journal Photo: Albion Fisheries
Rising consumer expectations 2
2 Rising consumer expectations MBA Seafood Watch assessment for Recirculating Aquaculture Systems for any species, grown anywhere Source: Seafood Watch
Increasing traceability 3 Source: ThisFish.info
4 Willingness to pay more for seafood that meets expectations Source: Wegmans.com
RAS technology advances 5 Technology advances through Optimization Standardization Scale Image: Akva Group
CAPEX ($/kg production) TREND 5 RAS technology advances Scale vs CAPEX 35.0 30.0 25.0 20.0 15.0 Kuterra (400 mt) $24/kg New and proposed facilities (3000-6000 mt) $10-$15/kg 10.0 5.0 0.0 Production (mt/year)
RAS technology advances 5 Key technology drivers Increasing use of RAS by primary production industries Changing economics of RAS production Incubation centres: Regions with active and connected industry, producer, supplier and research communities (eg. Denmark, Norway) Centres of aquaculture excellence (eg. Freshwater Institute) Source: Akva Group Photo: Nofima
RAS technology advances 5 Photo: Akva Group Where we Photo: Inter Aqua Advance came from
5 RAS technology advances Today Photo: Akva Group
RAS technology advances 5 Inter Aqua Advance Where we are going Photo: Akva Group
5 RAS technology advances New directions
Advancing production knowledge 6 O 2 Temp Hardness NH 3 CO 2 Lighting Density ph H 2 0 speed
Falling production risk 7 plankton super chill disease predators sea lice RAS low oxygen storms
Rising feed costs 8 3000 mt/y RAS model farm Production costs Feed Smolts (hatchery) Water treatments Energy Labour Insurance Maintenance
Rising feed costs 8 RAS offers the potential for optimized fish performance, which = maximized feed conversion. USD/t 2 500 2 000 Fish oil Fish meal Other forms of aquaculture have less capacity to do this. 1 500 1 000 As feed costs increase, RAS competitiveness improves. 500 0 Source: OECD - FAO Agricultural Outlook 2014-2023
Local food production 9 Sample freight savings from local production (USD) $1.50/kg $0.60/kg $1.80/kg Sources: Anders Gjendemsjø, Deloitte AS for Akva Group Marine Harvest Yearbook
Local food production 9 or Photo: Interaqua
10 Rising environmental compliance costs Site productivity limits Sea lice treatments Net strength limits Monitoring and reporting Licence and tenure fees Photo: BC Salmon Farmers Association
What does all this mean for the RAS industry? Photo: Akva Group
Millions of USD 70 60 Capital costs 5000 MT in Norway $32.3M Capex Licence Hatchery included in each scenario 1NOK = 0.15 USD Licence cost = $12m per 1250-1667 MT 50 40 30 $20.2M $36.0M $36.0M $56.3M 20 10 0 Open net-pens Post-smolt RAS to ONP Land-based RAS Source: Anders Gjendemsjø, Deloitte AS, commissioned by Akva Group
MT live weight (WFE) Production costs 1 400 000 6.75 6.00 1 200 000 5.25 1 000 000 800 000 600 000 400 000 4.50 4.00 3.75 3.00 2.25 1.50 Production costs (USD) 200 000 0.75 1992 1995 2000 2005 2010 2014 Annual salmon and trout production in Norway Production costs (2014 prices) USD (1NOK = 0.15USD) Source: Norway Directorate of Fisheries via Anders Gjendemsjø, Deloitte AS, commissioned by Akva Group
Growth Freshwater Institute growout trials 1-8
Leads to convergence RAS currently RAS over time Netpens over time Capital Capital Capital Traditional netpens currently Capital Production costs Production costs Production costs Production costs
THE VALUE PROPOSITION FOR LAND-BASED RAS AQUACULTURE RAS is the future of the Aquaculture Industry despite being more capital intensive than traditional approaches. RAS has major advantages such as lower water and area requirements, year-round production, temperature control and mitigation of environmental effects. RAS is species adaptable, allowing operators to follow market trends for seafood preference. RAS is also a point pollution source, enabling efficient solids waste treatment and nutrients removal, which allows reducing the impact on the environment at a reasonable cost. - Youri Gendel, Ori Lahav, Technion - Israel
Thank you Eric Hobson Chair, Kuterra LP hobsongonefishin@gmail.com Guy Dean Vice President, CSO Albion Fisheries Ltd guy.dean@albion.ca Gary Robinson Principal,GRV Ltd gary.robinson@uniserve.com