The Case of the Well Travelled Fish

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-By John Boley

Imagine catching fresh, tasty Australian Barramundi in the desert city of Las Vegas. At the moment it’s something of a pipe dream, according to Chris Bolger, but it’s by no means an impossibility.

Chris is General Manager of Cell Aquaculture Ltd. Headquartered in Western Australia, Cell is an international aquaculture company, publicly listed on the Australian Securities Exchange (ASX Code: CAQ), that supplies a full range of environmentally sustainable, vertically integrated fin-fish production services – encompassing everything from ‘Hatch to Dispatch’.

Developed over twelve years, the Cell proprietary system is a complete land based environmentally responsible aquaculture system developed for the production and supply of premium quality fin-fish. Cell Aquaculture has established commercial hatchery operations for Australian Barramundi at James Cook University, Queensland, and has also commenced production trials on a range of further ‘high value’ premium species for commercial production.

Cell has a number of large scale land-based re-circulating fin-fish production projects, at varying stages of development, in Malaysia, Thailand and South Africa. It supplies and installs growing systems, manages the operations, as well as processing, value-adding, branding and sales of finished product under the company’s Eco-Star brand.

Having at great expense developed its proprietary system, Cell decided it would not (as originally envisaged) market it as a standalone system. Instead, Cell is constructing projects in several countries to which it flies tiny hatchling fish which are then grown in a controlled, clean and environmentally friendly manner before harvesting. The product is then sent back to Australia for packaging and marketing. Although this sounds expensive, Chris assures that this process allows Cell to be entirely price-competitive with their finished product.

“We did most of our R&D here in Western Australia. We have grown fish and developed all our systems and proprietary equipment here, but the cost to grow fish this way in Australia was just too high. The main inputs for aquaculture are labour, power and feed. By outsourcing to a lower cost base area we’re still able to maintain pristine conditions and produce exceptional quality fish at a fraction of the cost.”

The finished packs are proving popular both direct with consumers and with restaurants and hotels. “It is a premium product that is competitively priced. We are certainly not the cheapest, but the quality that you get is far superior to anything at a comparable price.”

So the fingerlings (barramundi fry) are flown to Malaysia, Thailand and (soon) South Africa and spend the best part of a year growing, in special re-circulating water from which all waste is constantly extracted (and later sold as fertiliser). Then the fish are harvested and quickly processed (to ensure full flavour and freshness is captured) before snap-freezing.

The processed fillets are then shipped to Cell Aqua’s wholly owned food processing operations in Western Australia where they are value-added, packaged and sold into the IGA supermarket network and Farmer Jacks outlets under the company’s Eco-Star brand.

The decision not to allow other companies to take the systems and run their own operations lies partly in quality control – this is a complex and capital-intensive business, and ensuring everything is done correctly can prove challenging in developing countries without constant supervision – and partly in the demand created for the Eco-Star fish in the domestic market. Cell is looking forward to the day when it can begin volume exports, but for now it is having difficulty satisfying Australian demand.

“Our proprietary design of filtration components and the system itself is something that we are hesitant to expose to the outside market,” said Chris. “But we do get inundated with expressions of interest; there is such an appetite for what we’re doing. There’s not enough seafood and the population is growing a lot faster than the availability of seafood. So we’re getting all sorts, from little hobby farms to countries and governments, calling us and asking if we can help build them a farm in their back yard.” But Cell has worked successfully with the Malaysian government to develop its first fully scalable aquaculture system located in the state of Terengganu which was established in 2008. A second facility is being developed in the South of Malaysia at present (please see sidebar for further details). “For governments the attraction lies with creating jobs, an alternative industry to the more traditional industries, palm oil for example, and it provides a food source.”

Cell is now entering a phase it has longed for many years – commercial viability. “What we’ve done to this point is prove up all the components of our integrated business model. Everything that we’ve done has been on a smaller scale, to prove the system works and to get the dynamics right. Now we are at the commercialisation phase and we’re looking to scale it up.”

The Terengganu farm has plans to develop up to 500 tonnes a year. The company-owned plant in Thailand now being developed (just north of Phuket) will be geared for “850 -1000 tonnes per annum. Economies of scale are very important in this business so we really wouldn’t consider annual production projects of anything less than 250 tonnes.”

There is no theoretical output limit. The system is modular, with each set of tanks independent. “That allows us to maintain control but it also allows us to then replicate and expand in an identical footprint and format. We are in discussion with a consortium in South Africa to build a 2000 tonne per annum facility that will start with 500 tonnes and then another 500 tonnes and so on, that’s the first stage.”

Fish farming has developed a mixed reputation, to put it mildly, with accusations of pollution to add to indifferent product quality in comparison with wild-caught fish. Cell’s system overcomes these hurdles. “We have done blind tasting with award winning chefs and our fish has come up trumps against ocean caught fresh Barramundi. Our system and our growth procedure means that the fish are fed a high protein diet consistently with no stress, no predation and with no disease. All of those factors have an impact on how the fish tastes. We’re reducing or eliminating all of those variables which ultimately allow us to produce a premium quality product.”

As for the environment, the Cell process uses no chemicals, antibiotics, antimicrobials or growth promotants, in its feed or production process. The system maximises water re-use through recycling and there are no unpleasant odours.

Cell is now hoping to attract more funding to grow the business. “We’ve tried to keep under the radar somewhat and develop the business,” said Chris. “Now that we’ve done that, we’re looking to increase the awareness of what we’re doing and how we’re doing it, being able to control each element of the process, producing a premium quality product which is consistently available 12 months of the year and doing it in an environmentally responsible and sustainable manner. Additional funding is required to develop the projects that we have on the table at the moment to a large scale, which will then ultimately mean that we can grow the business.”

As far as the Nevada desert? “One of our pipe dreams is to maybe build a large scale land-based aquaculture system somewhere like Las Vegas, right next to all the casinos, where we can supply fresh farmed fish consistently every day of the year, straight into hotels and restaurants. It’s certainly possible, it’s a vision we’ve done some research on and it’s not impossible. It’s just that we’ve got enough projects under development at the moment and we just don’t have the capacity to be able to entertain that one as well.” But stay tuned for the concept of fish flying back from the casino to your plate.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

June 19, 2018, 10:27 AM AEST