Kailis, Cognis hatch seafood plans

AQUACULTURE has a chequered history in Western Australia but the growth in demand for seafood from Asia, coupled with the decline in wild stocks, continues to generate new opportunities.

The latest moves come from two established players in different areas of this technologically challenging arena; local seafood leader MG Kailis is planning to list a lobster hatchery business, and multinational chemicals company Cognis has started growing food for seafood farming near Kalbarri.

In an unusual move for the private business, MG Kailis has been engaged this past week in a capital raising effort seeking $4 million in seed money for a lobster hatchery development it plans to list on the ASX in the next 12 months.

Led by Patersons Securities, the raising follows what MG Kailis CEO Alex Kailis claims is ground-breaking research and development by its joint venture with Singaporean investors called Lobster Harvest.

Mr Kailis said the joint venture partners had spent around $14 million in cash and kind developing the hatchery technology and the capital raising would value the business at $22 million.

The Lobster Harvest commercialisation plan is focused on two distinctly different products, both in lobster, which have not previously been raised in hatcheries.

The first is tropical lobster, a product popular in Asia where juveniles are caught and then grown-out in captivity. MG Kailis also exports mature wild tropical lobster to Asia.

It believes there is an opportunity to supplement wild juvenile stocks with hatchery born juveniles in the Asian aquaculture market.

The other species Lobster Harvest will concentrate on its slipper lobster, best known in Australia as Moreton Bay Bugs. While this species has little recognition in other markets, Mr Kailis believes it has considerable potential.

Mr Kailis added that MG Kailis was experienced in growing-out local lobster and the marketing of all forms of seafood.

WA has a mixed record in the aquaculture field. Listed player Marine Produce Australia has struggled to live up to expectations and in February moved to restructure debt and delist, though it plans to expand operations. Cell Aquaculture recently secured $2.3 million in capital from European investors but its track record since listing is patchy.

At the other end of the scale, WA Abalone was last month placed in the hands of external administrators, six years after launching operations on WA’s south coast. Also in March, proposed fish farmers McRobert Aquaculture Group was placed in the hands of external administrators.

Mr Kailis said the Lobster Harvest technology fitted between these traditional aquaculture business ventures, which were usually at very early R&D phase or, alternatively, based around widely known techniques.

Big chemicals company Cognis opened its artemia, or brine shrimp, production facility at the Hutt River Lagoon between Port Gregory and Kalbarri.

The facility is adjoined to Cognis’ 14-year-old betacarotene farm in which artemia naturally resides, turning a pest into a crustacean and fish feed product currently supplied by export markets.

The company benefited from $2.3 million in state-based assistance.

“What has happened is we turned an adversity in to a commercial benefit,” Cognis nutrition and health general manager Roger Taylor told WA Business News.

Mr Taylor said the company was aiming to first meet the needs of the Australian aquaculture market before going to international markets with the product.

He declined to comment on the capacity of the facility but said Cognis “should have no real problem satisfying the Australian demand.

As well as having clients in the prawn fishing market Cognis is distributing the product to the ornamental fish market.

Mr Taylor said initially the bulk of sales would come from the market, the first client being South Australian-based PosAqua – the artemia will be branded as PosAqua’s fish feed PureTrueBlue.