Israeli investors plan 10,000t salmon RAS operation in Vietnam with local partner

Israeli investors and a firm specializing in recirculating aquaculture systems (RAS) are planning to build a 10,000-metric-ton Atlantic salmon farm and processing plant in Vietnam with a local partner, executives involved in the project told Undercurrent News. 

The plan is to raise over $100 million to build the hatchery, RAS farm, and processing plant on a 10-hectare plot of land in an industrial zone south of Dan Nang, to produce salmon for Vietnam and the rest of Southeast Asia, and China.

AquAgro Projects, a company based in Singapore backed by Israeli entrepreneurs, has teamed with a Vietnamese group, Dong Nam Investment and Technology Development Company, on the project, named SEA Aquaculture. Lighthouse Finance, a seafood asset-based lending firm in the process of raising €1 billion for its own fund, is involved on the funding side. 

AquaMaof Aquaculture Technologies, the Israeli RAS equipment specialist, is also an investor in the project, with 10%. AquaMaof's RAS technology and equipment will be used in the project, which AquAgro will manage. Then, AquAgro has 20% and the Vietnamese partner the remaining 70%. 

The founders of AquAgro are Hillel Milo, a seasoned start-up and venture capital executive; Erez Shalev, an agribusiness sector veteran who previously ran the Asian operations of Netafim, an Israeli manufacturer of irrigation equipment; and Rani Fischer, who has over 30 years of experience as a water, drainage and soil engineer on large-scale aqua and agriculture projects across Asia, Latin America, and the Middle East.

“I used a lot of my contacts from living in Asia for many years, Hillel has decades of experience of fundraising and floating companies and Rani has been working on aquaculture ponds for some 30 years," Shalev told Undercurrent.Vietnam RAS salmon project

The plan, after the financing has been secured, is to break ground in the latter part of the first half of 2020, Milo told Undercurrent. It’s expected it’ll be around 18 months later that the first fish can go in.

“The main effort now is raising financing for CAPEX. We haven’t just started today, this has been ongoing. I don’t want to be specific with names, but we are not doing this alone. We are working with Lighthouse, then others in Asia. There are some major financial players we are working with,” he said.

"Lighthouse Finance has been working with SEA Aquaculture since last year, and we have some experience in the region so we think that the business case is very sustainable," Roy Hoias, CEO of Lighthouse, told Undercurrent. 

"The involved partners and the Aquamaof RAS solution are well known for us. We are in the process now of setting the financial CAPEX solution together and have some good traction on this. We believe that this farm will be successful and have a huge impact on the industry in Vietnam," he said. 

AquAgro plans to build a plant for processing the bulk of production from the farm, they said. Also, the company will build a rendering plant to reduce by-products for sale to the feed industry. When the company has got to 10,000t, it will employee around 100 staff.

The processing plant will produce mainly fillets for Vietnam, China, and other Asian nations. “If you look at the growth curve of demand in China, it’s very impressive. But, so is the growth curve of every country in SE Asia. We have talked with 'off-takers' in all of these countries,” said Milo.

A 10,000t project sounds big, but “when you look at the overall demand in Asia, it’s a drop in the ocean”, he told Undercurrent.

There is room to expand the project on the site. “The 10ha size allows us to expand, as the footprint of the 10,000t is only 6.5-7ha,” Milo said.Vietnam RAS salmon project

However, the group is also looking at other projects in other countries and species, as well as one more in Vietnam.

“Another project we have coming next will also be in Vietnam, but it will be further south, in the Mekong Delta. Raising money might be easier for that as we have a commitment from a partner for offtake,” said Shalev. He declined to name the seafood company from which AquAgro has a commitment, or the species it's planning to farm in the second planned facility, however.

For Milo, the project has a circularity to it.

"The kibbutz I grew up on had aquaculture ponds and I actually worked on this as a teenager. So, I’m closing the circle,” he told Undercurrent.