RAS Investors’ Forum recap
Answering the important questions on investing in RAS
August 3, 2021 By Catarina Muia
As the world looks to become more environmentally-responsible, the aquaculture industry is no different, aiming to replenish at-risk natural stock in a safe, eco-friendly and cost-effective way. Because of this and numerous other reasons, companies and investors have taken recent interest in the aquaculture industry, and more specifically, in recirculating aquaculture systems (RAS).
Maggie Fried, head of the Oceans, Seafood and Aquaculture Investor Consortium (OSAIC) at CREO Syndicate, looked into a number of these reasons during her ‘RAS Reality Check’ opening keynote at the first virtual event in the RAS Connector Series, held on June 9.
A piqued interest
Featured in the RAS Investors’ Forum, which ran simultaneous to the Danish RAS Technology Seminars, Fried’s opening remarks highlighted four driving forces behind increased RAS investments: decoupling aquaculture from ocean ecosystems; the increasingly competitive CAPEX and cost of production; benefits of local production; and ongoing proof points.
“Removing aquaculture from the ocean can eliminate the risk of mass die-offs due to unforeseen ocean changes,” said Fried. “Unfortunately, evolving conditions due to climate change will only become more problematic over time. While RAS can have its own negative externalities, it does eliminate the environmental damage to the ocean due to nutrient-loaded seabed damage and escapes.”
Fried also highlighted several benefits of local production. With a land-based aquaculture facility, she said you can choose a location near end markets, providing year-round access to high-quality seafood and non-native species. For investors, this means accessing new markets.
An investor’s perspective
Part of the RAS Investors’ Forum, the Investor’s Profile panel session gave attendees a closer look at an investor’s perspective of RAS.
During the session, host Jean Ko Din, associate editor of RAStech and Hatchery International magazines, explored several topics with three guest investors, including factors to keep in mind when investing in a RAS company or project.
For some, having a knowledgeable and experienced team is of the utmost importance. “We want to understand their experience, and assess how realistic their plan is,” said Jamie Stein, co-founder of Devonian Capital.
“With the lack of specialized RAS farmers, for us, it’s important that we start with finding the right people,” added Roy Høiås, CEO and founder of Lighthouse Finance AS. “We also take a look at who is supplying the technology. We like to see suppliers who are involved, in some sense, in the business or can provide support services for the next two to three years.”
At Nutreco, investors keep to strict guidelines and typically only consider opportunities involving species that have already been industrialized and developed. “Atlantic salmon and shrimp are our preferred species. For us, focusing on these species lowers the overall risk profile for RAS, which is quite high, especially in early-stage companies,” said Erik Tveteraas, investment director at Nutreco.
When conducting business and having conversations with RAS producers, Ko Din was interested to hear what investors think is important for RAS producers to know. “Definitely do your homework. Know who your investors are and what level of knowledge they have on the business, otherwise you will find yourself in a challenging situation,” Høiås warned. “We see very wide knowledge differences, and sometimes we are advising our clients when they are talking to investors, to go back to the ABCs of farming. This way, the investors are really understanding the risk and opportunities.”
The RAS Investor’s Profile panel discussion continued to look at several topics, including specific areas of investor interest, current obstacles affecting the RAS sector, and promising species for RAS in North America.
Registered attendees of the RAS Connector Series can access the full first virtual event of the series, which includes a number of series concerning investors of RAS technology, as well as perspectives from product and solution providers and RAS producers. Visit the event’s On Demand section, which contains all sessions for both the RAS Investors’ Forum and the Danish RAS Technology Seminars events.
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