Maynard, Massachusetts, U.S.A.-headquartered AquaBounty Technologies has big ambitions for the future of the company.
During a “Virtual Analyst Day” presentation by the company, AquaBounty CEO Sylvia Wulf and CFO David Frank overviewed the company’s future plans – which include significant expansion in both North America and overseas. According the company, it plans to construct new land-based recirculating aquaculture system (RAS) facilities for its salmon every two years.
“We have a very aggressive plan,” Frank said. “We expect to construct a farm every two years.”
AquaBounty announced its selection of Pioneer, Ohio, U.S.A., as the site of a new recirculating aquaculture system (RAS) facility in July 2021, and the company began construction on the new facility earlier this year. The company projects the new facility will be able to raise up to 10,000 metric tons (MT) of genetically-modified Atlantic salmon, under the company’s AquAdvantage brand.
According to Frank, as its Ohio facility is being constructed, the company will already be looking toward the next facility.
“Our plan is, before the Ohio farm is finished being constructed, we will already know where our next farm is going to be, and we will have started the preliminary due diligence on the site,” he said.
The Ohio facility, Frank said, is being built using knowledge gained from the company’s original facility in the U.S. state of Indiana – he called the facility a “transformative” step for the company. As part of that development, the final design of the building was still being worked on after site selection, and the building was always designed to be constructed in phases as the company learned how to achieve efficient production.
That phase-based design process, he said, is a result of the company responding to its realization its costs weren’t going to match original expectations.
“As we progressed with the design, that’s when we became aware of the escalation in our cost estimates,” Frank said. “Obviously everyone knows what was driving cost escalation. We’re not the only ones that experienced this.”
AquaBounty’s reaction to the increased costs, he said, was to “not panic” and to step back and understand what was driving the cost increases – and what to do about it. According to Frank, the company immediately launched a data-driven analysis of cost increases to determine what was needed to reign in costs.
“We’re not complete with that process, but at this stage of our analysis, we are feeling much better that we can start to rein that cost back in, and that we can continue forward and still produce the returns that we need to make this a successful product,” he said.
As part of the progress on the new facility, Frank disclosed that the company is still working on its bond financing with Wells Fargo, but that it expects to “move forward and complete the transaction” and start marketing the deal in mid-November 2022.
“We’re on track to do that. We just need to complete our work on the cost estimation and the timeline,” he said.
As part of its future expansion plans, the company produced a detailed map of where it thinks a new farm could be successful based on a number of factors, including water availability, electricity costs, labor availability, and more. Current top-ranked sites are in a region near New York City, in southwest California, and in parts of Mississippi.
Frank added that portions of Southern Canada aren’t out of the question either – especially as a way to target markets in the U.S. Northeast.
“Southern Canada is definitely up for review on our part in terms of being able to service the northeastern part of the U.S.” he said.
Wulf said the company's expansion wasn’t limited to North America, but that the company was aggressively pursuing operating partners in other parts of the world for new facilities. The main targets for a new RAS facility, for now, are Israel, Brazil, and China.
“The areas of the globe that we’re most focused on are those that mirror the U.S. – they’re net importers, and they’re also growing markets,” she said.
Currently, AquaBounty is in the “final negotiations” of a joint venture with a commercial operating partner in Israel, Wulf said. Brazil is next on the list, due to being a growing market and thanks to regulatory approvals the company achieved there in 2021.
AquaBounty targeting business opportunities overseas is nothing new – Wulf told SeafoodSource in 2019 that the company was having conversations with partners in China, and that it had been approved for field trials in the country. Those field trials are currently underway, and the company is preparing to submit documents for regulatory approval, Wulf said.
Wulf said a key aspect of AquaBounty’s business model is that the value of the company’s IP isn’t in a patent – it’s in its eggs, and the company is going to be the supplier of the eggs.
To that end, the company has already been working on egg production facilities in Rollo Bay, in Atlantic Canada. The company is currently working on a third building on the site, and when work is completed on the facility it plans to be able to produce more than 30 million fertilized eggs annually.
“To put that in a bit of context, each one of the 10,000 metric ton farms that we expect to build and operate, will require five million eggs annually,” Frank said.
A key aspect of the company’s egg production is that unfertilized eggs are non-transgenic – meaning they haven’t been genetically modified in any way. The female eggs only enter the realm of genetic modification when fertilized by genetically engineered males, Frank said.
Wulf added that the company also has plans to look into farming other species – including shrimp. The company said it is continuing to review its RAS technology, and is researching whether it could enter the shrimp market, or even another species like tilapia.
At its core, the AquaBounty has mainly been a research and development company for the past two decades, and is only recently entering the world of commercial sales. As such, the company has posted losses every quarter – though the gap between sales and losses narrowed in Q2 2022.
Even though the company is starting to narrow the gap, its stock price has seen steady declines – the 52-week high was USD 4.50 (EUR 4.62) per share, and the opening price as of 28 September was USD 0.73 (EUR 0.75).
The company is also still waiting on permitting for its Ohio farm. The Ohio Environmental Protection Agency held a public hearing on 12 September regarding wastewater discharge permits. An EPA official told the Hillsdale Daily News the meeting was a “receipt of application” meeting, meaning it is meant to inform the public about the permit applications. The role of the state’s EPA is to determine if the plans meet standards and to monitor the facility if it opens – permitting for groundwater withdrawal, meanwhile, is in the hands of the Ohio Department of Natural Resources.
Commissioners in Defiance County, Ohio, meanwhile have written a letter opposing AquaBounty’s request to discharge water into a branch of the Saint Joseph River, The Crescent-News reported.
“We respectfully request that any proposals to drill, pump, or sell water (including this request from Aqua Bounty) from the aquifer be denied or delayed until a hydrological study can be completed on the aquifer to determine the area encompassed by the aquifer, the amount of water contained in the aquifer and the estimated lifetime of the aquifer,” the commissioner’s letter said.
Despite the headwinds, Wulf and AquaBounty remain bullish on the future of RAS farmed salmon, and the company.
“We really do believe that we are pioneers in land-based aquaculture,” she said.
Photo courtesy of AquaBounty Technologies
