Fisheries/Aquaculture
Economies of Scale
Traditionally A Mom-And-Pop Industry, Aquaculture Reeled In Record Revenues Last Year
Hawaii-based aquaculture firm Cyanotech Corp. (NASDAQ: CYAN) recommends that you do not eat between five and seven servings of vegetables every day. Eat Spirulina, instead. It’s a microscopic blue-green algae full of amino acids, protein, vitamin B and beta-carotene.
Thanks to consumers who are listening, aquaculture companies anticipate pools of green cash over the next few years. Cyanotech in fiscal year 2000 sold 331 tons of Spirulina products under the brand name Spirulina Pacifica. The result: gross revenues of $8.04 million for the 12 months ended March 31, 2001, compared with $7.4 million the previous fiscal year.
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Cyanotech this year anticipates more than $10 million in revenues, generated from sales of Spirulina Pacifica and a second microalgae byproduct called BioAstin. Researchers are conducting clinical trials to determine if BioAstin aids sunburn, carpal tunnel syndrome and other health problems.
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“We’ve been telemarketing BioAstin and Spirulina to health-food stores and increasing our nationwide coverage through health publications,” says Gerald Cysewski, president of Cyanotech Corp. “Internally, we’ve also hired two sales people and are working with a marketing group that directly represents us.” Cyanotech operates its patented Ocean-Chill drying system in a 90-acre farm on the Kona Coast of Hawaii. “Hawaii is one of the best places in the world for growing microalgae,” he says.
That, plus more than 30 different underwater species, thanks to year-round sunlight and deep oceans. In 2000, aquaculture in Hawaii generated gross revenues of $22.2 million, up from $18.1 million in 1999, according to the state’s Aquaculture Development Program. That dollar amount comprised the total wholesale value of farm-cultivated finfish, algae, shellfish, ornamentals and other species grown in Hawaii.
Algae (mainly Spirulina) constituted 38 percent of total revenues in 2000. Shellfish and finfish constituted 10 percent and 35 percent, while ornamental species (such as seahorse), brood stock and seed constituted the remaining 17 percent of overall revenues. They were used for a variety of products, from specialty chemicals and ornamental displays to jewelry, food and pharmaceutical products. Some companies involved in the industry are:
CEATECH USA, (Controlled Environment Aquaculture Technology Inc.), the Kauai-based bio-tech company that produces Hawaiian Plantation Shrimp (more commonly known as Kauai Shrimp), last year was awarded the American Taste Award of Excellence by the American Tasting Institute. The company produces between 13,000 to 15,000 pounds of shrimp each week for restaurants and supermarkets in Hawaii and on the West Coast.
Cates International last year submerged a sea cage 100 feet below the Leeward Coast of Oahu as part of an open-ocean, farming project. The $90,000 cage is Hawaii’s first. In the project’s first six months, more than $50,000 worth of moi (Pacific threadfin) was produced.
There are other companies that have made significant strides. But all told, Hawaii is home to between 105 and 140 aquaculture farms, a ballpark figure based on a statewide survey. The number however, doesn’t reflect the scope of the industry because “a significant number of those are ornamental, backyard, small-scale farms,” says John Corbin, manager of the Aquaculture Development Program. “There are a lot of mom- and-pop type of operations, selling between $30,000 to $60,000 annually in backyard operations.”
Even so, aquaculture farms – large or small – don’t produce enough to feed Hawaii, where annual seafood consumption is 45 pounds per person, approximately triple the average of the U.S. mainland. Even if local farmers were to sustain local palates, however, the cost of producing seafood in Hawaii isn’t cheap. “We have the high cost of bringing in supplies our shrimp and fish farmers need,” says Ron Weidenbach, president of the Hawaii Aquaculture Association. “They have to import the feed.” Fish feed and other supplies are flown in from British Columbia, Idaho, Utah and even as far away as Pennsylvania.
Weidenbach adds: “That is why microalgae is competitive. All it needs is sunlight and nutrient-rich water – you simply pay the cost of pumping it (algae) in from the ocean.”
Photo Courtesy of Aquaculture Development Program
