On Site: Agrimarine Holdings (TSXV:FSH)

Read the words fish-farming, or aquaculture in the media and it’s never long before you are reading the word controversial. As little as five years ago there were just two sides debating the topic and neither was retreating. On one side were groups like GreenPeace, which has opposed open net cage fish farms for more than ten years, believing the practice to be harmful to local ecosystems. On the other side of the equation were those who believed that raising fish in captivity is no different than raising pigs or cows for consumption.

Sean Wilton of Agrimarine with a sample of the company's solid wall containment.

Sean Wilton of Agrimarine with a sample of the company's solid wall containment.

But things are changing quickly in this world, and you have to look no further than to no less than the man voted “Canada’s most trusted Canadian” in a recent Reader’s Digest poll, David Suzuki. In what was a stunning reversal to some, Suzuki recently penned an editorial in the left-leaning Vancouver newsweekly The Georgia Straight called “Salmon farming may be a good idea after all”. In the article, co-written by Faisal Moola, the two state that “Farming may be our only option—and new technology offers some hope that we can continue to have our salmon and eat it too. Raising salmon in a way that eliminates interaction with the environments where wild salmon live has long been suggested as a way to overcome the worst effects of farming fish.”

And Suzuki isn’t alone. Dr. Steven Salzberg, a Professor and Director of the Center for Bioinformatics and Computational Biology at the University of Maryland, College Park agrees. In a editorial for Forbes on August 9th, Salzberg says  “Sooner or later, we will drive wild fish to extinction, unless we make the switch to farmed fish…we should work on ways to improve fish farming techniques and make them more sustainable.”

Early in August I spent some time at the Vancouver head office of Agrimarine (TSXV:FSH) with President and CEO Richard Buchanan and Sean Wilton, a recent board appointment who has been with the company since 2004. Agrimarine’s corporate history is something of a catalogue of the collective knowledge and history of commercial aquaculture.  The company has been around for more than a decade, first as a traditional net cage operator. Agrimarine then got into land based systems after the BC government asked for help the problem, working on a project in Cedar, BC in  the early to mid 2000′s. The company now operates something unique; a self-contained floating system that operates in the marine environment and replicates natural conditions more closely than has been done before.

Agrimarine's Benxi reservoir fish rearing facility in Liaoning province, China. The Company recently transferred 50,000 Pacific steelhead trout to its farm for the 2011 harvest.

Agrimarine's Benxi reservoir fish rearing facility in Liaoning province, China. The Company recently transferred 50,000 Pacific steelhead trout to its farm for the 2011 harvest.

One has to look no further than some of the heavyweight supporters Agrimarine has recently attracted to realize they are into something. The list includes the Gordon (co-founder and Chairman of Intel) and Betty Moore Foundation, Sustainable Development Technology Canada and, yes, the David Suzuki Foundation. So what are these influential groups looking for in Agrimarine’s technology? First, they  know that open net cage farms are probably a thing of the past. Their inherent problems (open net cages can release farmed fish into the ocean, jeopardize native species, discharge waste and spread disease) seemed to now have have turned the tide of public opinion and are putting pressure on legislators worldwide.

So that leads us to land based systems. Speaking with Wilton and Buchanan, I learned that  Agrimarine’s experience with these systems shows they may simply not be good enough or economical enough to offer much help in the long run. The main problem is water, or more precisely,  the cost of water. These systems are dependent upon getting enough clean fresh water, which can be expensive. Water recycling presents cost and environmental problems because recycling causes a build up of ammonia, which needs to be treated.  Land based systems may be useful in certain situations, such as retrofitting an old mill, but in Wilton’s opinion the economics don’t add up most of the time. The fish produced for the BC Government project at Cedar were top quality -they were sold at grocery chain Thrifty’s under the brand eco-salmon- but in the end the power bill for pumping seawater into the was just too expensive.

Agrimarine’s solution is a hybrid that represents a collection of the best intellectual property the company has developed in acquaculture. Their next-generation fish farms float in inter-tidal regions or fresh water bodies, requiring much less power and offering natural environmental benefits. The energy required to move seawater into these tanks, compared to land-based systems, is dramatically reduced. Because water is not recirculated the need for an ammonia treatment is eliminated. Another benefit is that  the seawater can be taken below harmful algae blooms. Algae blooms are a major concern for biologists as they can deplete the ocean of oxygen and produce neurotoxins that can kill fish and birds.  Finally, a holdover from the Cedar project are real time automated monitoring controls that analyze water quality and dissolved gas levels.

Agrimarine's solid-wall closed containment fish farm in the Guanmenshan Power Reservoir in the Benxi Region of Liaoning Province, China.

Agrimarine's solid-wall closed containment fish farm in the Guanmenshan Power Reservoir in the Benxi Region of Liaoning Province, China.

All this theory about the future of fish farming has in fact become a reality, and we’ll know within weeks how it turns out. In the fall of 2009, The Company opened what they called the world’s first solid-wall closed containment fish farm in the Guanmenshan Power Reservoir in the Benxi Region of Liaoning Province, China.  The fish farms in China are more economical, in part because they are then times the size of alternative land-based tanks. Agrimarine has signed agreements with distributors in China servicing the five-star hotel and restaurant market, has set up permanent automated harvesting equipment at the farm, and has opened an office in Beijing to provide local support to its distributors and expand sales.

Agrimarine’s corporate history is a long one, but the wind may finally be at their back, big picture wise. The world’s third largest private equity fund, The Carlyle Group, with over $90 billion of assets under management, has begun to aggressively enter the aquaculture space because they see a growing demand for higher-quality protein sources in China and India. On August 4th, 2010, Patrick Siewert, Carlyle Group’s Senior Director told Intrafish, an international magazine covering the fishing industry that “Improving lifestyles in China and India will drive a rebalancing of food in the world”.

Additional Images

Richard Buchnanan and Sean Wilton of Agrimarine Holdings

Richard Buchnanan and Sean Wilton of Agrimarine Holdings

Cantech Letter On Site is an ongoing series of stories in which we report directly to you from the head office or production of a public Canadian tech company. Do you have an idea for this section? Send it to: info@cantechletter.com

About Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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