PE fund envisions global network of land-based salmon farms

Now is the ideal time for investing in land-based salmon farming, and 8F Asset Management — headquartered and regulated in Singapore with group offices in London, New York and Tokyo — is putting its money where its mouth is.
The company manages a private equity fund that invests solely in vertically integrated salmon production and processing facilities, using land-based sustainable recirculating aquaculture system (RAS) technology. The operating company and brand is known as Pure Salmon.

“It is not a traditional PE fund in the sense of investing in other companies, but instead we invest in our own facilities, which we build ourselves,” Martin Fothergill, co-founder and partner at 8F Asset Management, told IntraFish.
Most recently the company announced a $162 million (€141.9 million) investment to create “Soul of Japan,” a 10.000-metric ton land-based Atlantic salmon farm in Japan’s Mie prefecture.

The project is fully integrated with a hatchery, grow-out systems, and processing facilities. It will be located in Tsu city on a site of approximately 137,000 square meters and will employ 130 staff, Fothergill said.

Construction will begin in 2019 and the facility will become operational in 2021, with the first products being available from 2022.

Soul of Japan will be majority owned by 8F’s private equity fund and use proprietary technology from Israeli firm AquaMaof Aquaculture Technologies — which is the preferred and exclusive technology partner to 8F’s projects.

8F also owns a 50 percent share in the 580 metric-ton production RAS facility Global Fish in Poland, along with AquaMaof, which owns the other 50 percent.

Salmon from Global Fish will be ready for harvesting and sold to the market by early-to-mid 2019.

“The project in Poland is strategically very important and is really a proof of concept facility, doubling up as a research and development (R&D) and training facility,” said Fothergill.

Since operations commenced in 2016, the Global Fish facility has successfully grown several large batches, now ranging from eggs to smolts to 5-kilogram harvest-size fish.

The product from Poland will be sold locally but also sent to other markets such as Japan, ahead of the Japan facility being finished.

“Ultimately, though, the goal is about local production for local consumption, but in the growth phase it makes sense to explore other markets,” said Fothergill.


Land-based the way forward

Despite mixed views on the subject, Fothergill and 8F are fully behind the development of land-based salmon farming, and committed to turning it into a large-scale, commercially viable industry.

“We think land-based is a key component in the future of salmon farming,” said Fothergill. “The maturity of technology is there, and the economics work for larger-scale facilities.

“We genuinely believe now is the time to industrialize the technology. There are other projects out there. We are not alone in this, and it is clear to us the time for scaling up RAS is now.”

In the past couple of years, land-based salmon farming is being seriously discussed more often and becoming more and more mainstream, he added.

“There are projects leading the way on this – everybody knows RAS works on a small scale, but now is the time to industrialize. There is a profound change and the industry needs to show it can be done,” said Fothergill.

With this bullish attitude, the project in Japan is just one of several 8F is looking at.

According to the company, it plans to reach a production target of 260,000 metric tons per year across a global network of facilities.

Along with the facilities in Poland and Japan, the next facilities will be in North America (20,000 metric tons), France or Italy (10,000 metric tons) and China (100,000 metric tons).

More will then follow around the world, it says.

“We’re looking at other RAS projects in the USA and Europe, which are already well progressed, but now we are at the asset raising stage,” said Fothergill.

It makes sense to build these farms in countries that are large consumers and importers of salmon, and which are a fair distance away from incumbent producers, Fothergill said.

Pure Salmon is grown near local markets to keeps carbon emissions from aspects such as airfreight low. The farms have no fish escapes, no release of chemicals, antibiotics or organic waste and no negative impact on marine ecosystems.

“Local production for local consumption also results in longer shelf life and reduced wastage,” said Fothergill.

This sustainable and local production is attractive to buyers and from an environmental perspective.

“We are committed to globally scaling up land-based RAS technology through a network of smart-tech facilities in major consumption centers around the world: Europe, North America, Japan and China,” the company says.

“Our land-based salmon is produced only hours away from major consumer markets and is days fresher than salmon flown in from Chile or Norway.”

Pure Salmon is able to make other well-known land-based arguments: the fish will be free of any chemicals, antibiotics, hormones, mercury and microplastics, and the fish is grown in a controlled, bio-secure environment where the water is free of parasites or pathogens.


Land-based as sustainable investment

8F Asset Management was established two years ago and the company spent a lot of time looking at impact investing and sustainable investing and considered a lot of opportunities. It settled on the RAS sector.

“All we do is land-based aquaculture, that is our full focus: said Fothergill.

“It may have been considered niche in the past – but we are convinced it is now going mainstream and we will be at the forefront of that change and will have the first mover advantage.”