Singapore-based Barramundi Asia has big plans for farming and selling a species of fish that the company’s CEO, Andreas von Scholten, considers underappreciated by the U.S. and European markets.
Founded in 2008 by an ex-Marine Harvest executives Hans den Bieman and Joep Kleine Staarman, Barramundi Asia now operates farms in Singapore and Northern Australia, and has announced expansion plans in Brunei. Von Scholten said on 27 January the company is mulling over an initial public offering (IPO) as it works to scale production up to 50,000 metric tons by 2030.
"To realize the vision [of Barramundi Asia becoming the leading player in barramundi farming], we're going to need capital,” von Scholten told Singapore’s Business Times. “Whether that's from an IPO, industry partners or investors, I think it's too early to say . . . We do have ideas for an IPO, but I wouldn't say it's confirmed."
Von Scholten confirmed the company had engaged in initial conversations with a stock exchange in Scandinavia, but was also considering the Stock Exchange of Singapore (SGX).
"The overwhelming growth in aquaculture for the future is still here in Asia,” he said. “Singapore, as an international financial hub, and with proximity to our key business activities in Brunei, Australia, and our local R&D and grow-out sites, also makes the SGX a strong contender.”
As it grows, the company has also restructured, with Staarman now serving as the director of sustainability, while von Scholten was hired into Staarman’s former role as CEO in November 2019. Previously, von Scholten served as the general manager of Asia Pacific and head of global marketing for Pharmaq, an animal health firm specializing in vaccines for the aquaculture sector, based in Overhalla, Norway. He said he first learned about Barramundi Asia while working at Pharmaq.
“All the time I was at Pharmaq, we were looking at, ‘What’s the next big thing?’” he told SeafoodSource. “After salmon, what aquaculture species has the potential to be attractive from the vaccinations standpoint? It would need to have scale, volume, and value. It would have to be not necessarily premium but at least at the level where farmers would be incentivized. We circled around barramundi for quite some time but never got involve because the volumes being produced were not large enough to justify the commitment to the making of vaccines.”
But the potential of barramundi was an idea he could not let go of, and when the opportunity at Barramundi Asia arose, von Scholten said he jumped.
“I was intrigued by the mission and ambition of the company,” he said. “They wanted to make barramundi the salmon of the tropics. They saw it as having a lot of the same attributes as salmon. Even though it’s a whitefish, it has the same method of farming, you harvest it at the same size, and use the same type of sea cages and technology. And barramundi has less fat but is very high on nutritional value, including omega-3’s, and is very popular with consumers who are familiar with it. So I didn’t hesitate to join the company – I am excited to help realize that vision of making barramundi a much bigger species.”
Barramundi Asia operates farms in deep seawater leases off Singapore’s Southern Isles, as well as in the Islands of the Kimberly off of Northern Australia. The company uses mostly automated farming processes, with an 18- to 24-month growth cycle, harvesting when its fish get to four to five kilograms in size.
In May 2019, the company signed an agreement with Brunei’s Ministry of Primary Resources and Tourism to invest SGD 300 million (USD 221 million, EUR 200 million) to lease more than 6,000 marine hectares at the Nankivell Offshore Aquaculture Site for marine farming and an additional 25 hectares on land in Kampung Meragang to open a recirculating aquaculture system hatchery and fish nursery. The project is expected to produce 4,000 metric tons (MT) of barramundi by 2024 and up to 36,000 MT by 2032, according to Bruneian news site The Scoop.
Andrew Kwan, a Barramundi Asia board member and group managing director of Commonwealth Capital Group, an investor in the company, told The Scoop the lease is for 30 years, with an optional 30-year extension.
“Brunei was chosen as the site for the project because of its pristine tropical water and good current flow. The Brunei government have been very supportive of this initiative,” Kwan said. “As the [world’s] population continues to grow rapidly from seven to nine billion between now to the year 2030, you will find that there will be a challenge in getting good animal protein. Barramundi fish is well loved in all of Southeast Asia, so we believe our target market is primarily [the] Asian market.”
Currently, the company’s existing production is around 4,000 MT, with around 700 MT produced in Singapore and 2,000 to 3,000 MT produced in Australia. It has around SGD 20 million (USD 14.7 million, EUR 13.4 million) in annual revenue – not enough to make it profitable yet. But that is due to the company’s aggressive expansion and its “fairly ambitious growth plans over the next 10 years,” von Scholten told the Business Times. Due to expansion of its operations across its three farming sites, Barramundi Asia is on track to produce more than 11,000 MT by 2023, he said. And that doesn’t include the potential of adding new farms, an option the company is exploring in several additional countries, von Scholten told SeafoodSource.
“We are looking at a lot of additional opportunities in Australia and all over the tropical belt. It’s natural to start looking in Southeast Asia.” he said. “When it comes to barramundi, the warmer water, the better, the fish is very robust, especially compared to salmon, where a little temperature increase could mean a significant impact on fish health. Because of that, it opens up to a whole new area of the world to commercial aquaculture. Leases are very scarce for salmon, but we are being welcomed with open arms by governments and regulators who are encouraging us to set up our farms in their countries. There’s a lot of focus worldwide right now on aquaculture as the best way to make better use of the oceans, which are 90 percent of the world’s untapped resources. When you speak to these governments, for them, it’s a hedge for global warming – not only does it use whole new area of the world for commercial purposes, but it also enables for warmer waters to be used in a better way.”
Despite its lofty production goals, Barramundi Asia is still taking caution in how it expands, von Scholten said, basing its plans on linking its decision on where to develop farms with strong demand from local markets.
“We do have a careful approach,” von Scholten said. “At this current stage, we are still exploring certain markets, but I think as we are planning a fairly significant expansion of our production, we have developed a good idea of the markets we want to serve. So far, it’s a testament to our success that almost all our product that is produced in Singapore is sold there, and the same is true in Australia. We know we have to be quite selective in the markets we decide to penetrate in the next 10 years. We see a lot of potential in China as well as select Southeast Asian countries, and in Korea and Japan. And Australia has a lot more potential – that is home country of barramundi. They’re very proud of their fish and we see a lot more potential there.”
Because of the geographic distance between its farming operations, Barramundi Asia has found it makes both logistical and financial sense to own and operate its entire supply chain, from hatcheries to farms, processing facilities and a marketing operation. It sells its barramundi via its premium online offering, Kühlbarra, as well as under its Cone Bay Barra brands. Besides Australia and Singapore, the group also has a sales presence in Hong Kong, China, South Korea, Thailand, and the U.S.
In 2012, it founded UVAXX, which provides custom animal health solutions, including vaccines and fish health monitoring, to the Barramundi Asia farms. Additionally, on 22 January, the company purchased Allegro Aqua, a Singapore-based start-up founded in 2018 by scientists from Temasek Life Sciences Laboratory to commercialize the St. John’s Sea Bass, which it helped to develop. Von Scholten said Barramundi Asia made the acquisition to gain access to Allegro Aqua’s 15 years of R&D on breeding programs, and specifically its expertise on genetics.
“We have the capability to go from fry to farm, we own proprietary vaccines and methods on nursery processes, we have a fairly sophisticated sales and marketing set-up with web shops and home delivery and good brand-building, But at the other end of the spectrum, we didn’t have genetics expertise, and that came in with this acquisition,” von Scholten said. “As part of that, we’re also getting a strategic perspective from Temasek Life Sciences, which is a nonprofit specializing in fish genomics and breeding programs.
Temasek Life Sciences Group will become a "significant shareholder" of Barramundi Asia post-acquisition, according to the Business Times, and Allegro Aqua will work with the Temasek Life Sciences Laboratory and UVAXX to develop vaccinated barramundi fingerlings. Once a steady supply can be established, the company may consider a decoupling of its farming program, allowing independent farmers to grow their own barramundi and sell back to Barramundi Asia, so long as they’ve adhered to company standards, von Scholten told the Business Times.
Von Scholten told SeafoodSource his firm will be announcing another acquisition mid-February involving a company involved in value-added processing, declining to go into further detail.
“We’re really truly bringing to fruition the idea of becoming an end-to-end company,” he said. “It’s because we all really believe in the future of barramundi as a species. Once it becomes more recognized globally, a lot of support companies will emerge, but as of now, there’s really a very limited number of companies specializing in barramundi, so we’ve had to take that on our own and do it ourselves. But the way we think it has to be done is the hard way, the right way, with very high-tech farming and sophisticated support efforts.”
Von Scholten acknowledged that both Europe and the United States must play a bigger role in the company’s sales if it is to truly succeed globally.
“For the long-term, we see both Europe and the U.S. as high-potential markets,” Von Scholten told SeafoodSource at the 2020 Global Seafood Market Conference in Orlando, Florida. “That’s why we’re here – to really understand where the market is at today and what products we would like to bring to the U.S. that would give us a competitive offering. We want always to stand out and have our own footprint in the market.”
Von Scholten said he believes those major markets will be receptive to barramundi, which is not very well-known outside of parts of Asia and Australia.
“I’m a true believer that quality and good taste will win,” he said. “We have had our fish on the market for a number of years, and it has been received tremendously positively by everyone who’s tried it.”
The company currently offers both fresh and frozen fish, both whole and in fillets, he said.
“We’re here for our customers. We do cater to customer needs and we have selection of different SKU’s we work with.”
Von Scholten said he sees enormous potential in selling direct-to-consumer via the company’s online platform.
“Think about this: You put in the order, we go out and harvest the fish – 24 hours later, you have it on your doorstep,” he said. “It doesn’t get any fresher, from a selling perspective.”
The last piece of the puzzle for von Scholten is his management team. He said the company has made efforts to bring in a more entrepreneurial mindset – people who don’t necessarily have as much experience in seafood as they do in ancillary industries.
“Our team has a very strong e-commerce background, and obviously I’m coming in from the vaccine side and there’s others who bring more of an aqua-tech perspective,” he said. “We’re quite carefully building a team that reflects different backgrounds and perspectives to create a dynamic environment for decision-making.”
The success of that dynamic will be crucial as Barramundi Asia pursues its enormous expansion.
“Can we do it? I believe so. It’s not going to be easy but we’re quite confident,” he said. “I do believe we have the capabilities in place to deliver on our expansion plans. I’m very high in confidence we can make it happen.”
Photo courtesy of Cliff White/SeafoodSource
