Aquaculture UK
Follow the smart money
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HE rapid growth of aquaculture has produced some bottlenecks but the sector’s solutions to those are ‘investable opportunities’, Rabobank’s senior seafood analyst Gorjan Nikolik told the conference. Among these were novel feed ingredients. Aquaculture uses 70 per cent of fish meal production and 73 per cent of fish oil production. But fish meal production has declined due to the impact of El Nino and the scarcity has created a response. The salmon industry has introduced alternative ingredients, three of which were attracting the ‘smart money’: • Algae – this could be very low cost, though prices are currently double those of fish oil, plus companies of the stature of Cargill had invested and therefore there is potential. ‘We’ll keep an eye on it’. • Bacterial proteins, such as Calysta’s Feekind – ‘we’re seeing many projects coming our way,’ said Nikolik. They are of scaleable structure, and although there is a huge capital cost up front, methane is fairly cheap now and the companies involved (including Calysta and Cargill) are impressive. If the smart money is interested so are the investors. • Insect protein – this is very much the junior partner to the other two. Companies tend to be small start-ups but they seem to achieve low cost and there’s been a proliferation of projects worldwide. ‘We were missing a major player but then the Swiss company Buhler entered the market.’ Rabobank itself also entered the market recently, investing €45 million along with Aqua-Spark and various private investors, in Netherlands based insect breeder Protix. Nikolik warned though that credit analysts always look at the downside. All these alternative feed products were created in a time of scarcity and that is now over, with the marine ingredients sector picking up.
Learned friends WHY do academics collaborate with industry, asked Sam Martin of Aberdeen University in a session about what different aquaculture players want from partnerships. A fish biologist all his working life, Professor Martin said he had spent the past 15 to 20 years in industry related projects. From the industry’s point of view, academics can offer a valuable resource- the kind of facilities and expertise that would be too expensive for individual companies to develop alone. Therefore, collaboration presented good economic value for the industry. On top of this, an academic’s track record in research, correct skill sets, and the reputation of his institution are all important to an industry partner. But what’s in it for the academics, who are driven by their own research agenda? Martin
Above: Sam Martin
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Typically, three years of very bad El Nino is followed by maybe four years of good El Nino so current price levels were likely to remain. Investors need a long term view and after this period Nikolik predicted there would be fewer but stronger players in the alternative ingredients sector. He has been in the business since 2005 and in the past few years has seen a huge growth of interest from every side, including venture capital and private equity – which thought aquaculture was too risky but is now ‘knocking on our door Above: Gorjan Nikolik constantly’. ‘People want more aquaculture companies. The wind is at your back now.’ However, it remains a risky investment. In Asia aquaculture is performed largely by smallholders and it’s difficult to put biosecurity measures into place. The shellfish industry is too fragmented with no economy of scale, and the disease risk and environmental risk is too high to attract large scale interest from investors. And he was cautious about the prospects of growing salmon to harvest in land based farms. Not only was there a very big up front capital expense, but the risk doesn’t seem to be lower in practice than in open systems. What particularly holds the sector back is the very poor recent history; too many investors have lost money, as have tax payers, on poor projects. ‘Too many dice are being thrown and you only need one thing to go wrong for it to go wrong. But never say never.’
We need to have a shared vision but it must be of mutual benefit
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said his sector tends to do work well ahead of what the industry believes is relevant – sequencing the salmon genome, for example, which scientists had been involved in for 15 years and was only now being picked up by the industry. ‘We need to have a shared vision but it must be of mutual benefit and interest or it is a non-starter,’ said Martin. ‘The science must work for us too.’ From the outset of collaborative projects both sides must understand the expectations, something that becomes clearer the longer academia and industry work together. For a university, research is about generating scientific knowledge. Scientists are judged on their scientific outputs and their published work in respected scientific journals. Universities must also consider other factors, such as their impact on society, and their training of PhD students, not just for the industry but also for the next generation of academia. The industry also wants to generate new knowledge but its principal driver is to improve production and gain economic advantage. Aquaculture companies also gain from the training of PhD students as their skills could be of future use
in the industry. Martin offered some advice to academics trying to establish a relationship with possible industry partners which, he admitted, could be ‘quite daunting to start with’ and takes time and effort: • Go to conferences (but choose the right ones) to present the results of your research; • Attend focus groups and meetings run by industry bodies, such as the Scottish Salmon Producers Organisation (SSPO), the Scottish Aquaculture Innovation Centre (SAIC) and funding providers such as BBSRC and Nerc; • Understanding the industry makes it easier to do proposals for funding calls for partnerships; • Blind emails – sometimes these are necessary to ‘beg’ for money. The question of who owns the research is also crucial as scientists will want to publish their findings. While he said he had never been prevented from doing so, this is a potential concern, presumably if companies were to insist on confidentiality clauses. While doing research worthy of publication was the big driver for academics, collaborating with industry brought other advantages, including funding. SAIC funding, for instance, is for industry led schemes. And aquaculture companies also contribute to PhD funding, often as much as 50 per cent which is, said Martin, ‘a very cheap way of getting research done’.
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06/07/2017 14:44:40