Aquaculture Magazine

Kampachi Farms plans private placement to fund Mexico farming operation

The company has approval from the Mexican government for a one kilometer by one kilometer farming concession four miles offshore from the Bay of La Paz, inside the Sea of Cortez.

USA: Kampachi Farms, which is chaired by aquaculture veteran Bjorn Myrseth, is on the brink of crossing over into the commercial realm after years of researching through its Velella project in Hawaiian waters.  Shirking off years stagnation in the US government’s efforts to support aquaculture in United States waters, the company’s co-founders — CEO Neil Anthony Sims and COO Michael Bullock — have turned to more friendly aquaculture territory for their venture: Mexico.  The company has approval from the Mexican government for a one kilometer by one kilometer farming concession four miles offshore from the Bay of La Paz, inside the Sea of Cortez.  Now is the time for investment, Sims told Undercurrent News on Tuesday. The company is preparing to issue a Series B stock offering in about a month, eyeing investors internationally.  “We need additional capital to help us scale up in Mexico,” Sims said.  Broodstock in hand, the company plans to put fish in the water this fall, putting it on track to begin selling Kampachi commercially in September of 2015 to the US and Mexico, with the US the main focus due to its size, Sims said. He declined to reveal the volumes planned for the project, reserving that information for potential investors.  Board chairman Bjorn Myrseth, a veteran of the aquaculture sector, and board members Toby Baxendale and Michael Bullock — as well as outside investors from the seafood industry — have put up initial funding for the project, and so have other investors in the seafood industry, he said.  This is arguably the second start for Sims and Bullock, who dissolved Kona Blue in 2011 after tough times in the US economy hit the company hard. At that point, Blue Ocean Mariculture acquired Sims and Bullock’s kampachi aquaculture operation, dubbed Kona Blue Water Farms, with the deal closing in 2011. Yet this may be just the beginning for Kampachi Farms, now that it is going commercial.  Sims, targeting investors internationally, reports strong interest to date thanks to the sheer quality of the fish.  The fish is consistently described as a high-grade sushi-quality species and gets rave reviews online. The Nibble, an online foodie-facing magazine with product reviews, gushes about the fish.  White tablecloth and sushi restaurants are major customer targets, particularly as the company works to grow consumer awareness, but Sims also sees opportunity in retail.  Interest also stems from increasing seafood industry awareness of the lack of seafood supply security in the United States, which depends upon imports for 91% of the seafood consumed.  Bold statements from NFI chairman Sean O’Scannlain’s, whose company Fortune Fish is propping up multiple US aquaculture operations by issuing steady distribution deals in their early stages, support the claim. The scope of these interests reach further, as evidenced by the formation of the Coalition of US Seafood Producers (CUSP), which debuted at the Aquaculture Americas Conference in Seattle this year in hopes of improving opportunities for US aquaculture ventures at a policy level.  Kampachi Farms also offers other hot-button selling points, such as production in close proximity to the United States and sustainable farming practices.  The company has a key sustainability claim under its belt, developed after years of research at the Velella project in Hawaii. It has developed a sero fishmeal feed for the fish using a combination of high protein substitutions: soy protein concentrate, micro-algae byproducts, single cell proteins and fish peptide concentrates.  Sims said the company would have started the project in the United States had there been a permitting pathway established for US aquaculture projects, but no such pathway yet exists. The closest the US government has come to establishing such a pathway is the Gulf of Mexico aquaculture plan, which has yet to be implemented.  Sims is keeping a close watch on the plan’s progress and calls the lack of aquaculture progress in the US a tragedy.  “It’s outrageous,” he said. “America is the land of innovation and entrepreneurship, and people are having to go elsewhere [to set up aquaculture projects].”  He points to a study by Conservation International and Blue Frontiers, which came out in 2012, showing aquaculture is the “least impactful of the protein raising categories”.  


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