Marinova - offshore salmon farming re-imagined

Marinova - offshore salmon farming vessel

For those of you who read Intrafish, I was recently mentioned in an article about an offshore salmon farming project, Marinova. The article does a good job of capturing the key elements of the project. Thanks to Hanna Gezelius for the interest. Please give it a read if you have a subscription.

Marinova - current efforts

Over the past few months, we’ve been in discussions with potential investors, financial institutions, regulatory authorities, suppliers of smolts, port services etc. One of the things we have observed is that the farming approach and vessel design we are proposing, although not entirely novel, is so far out of the mainstream of current thinking about how to create growth in the salmon farming industry, that it takes a lot to overcome initial skepticism.

When you are pitching a project to an investment manager, that initial skepticism can kill you. It can be dangerous to generalize but a typical decision-maker at a VC, PE or family office will likely see dozens of investment proposals per month and is working with time constraints, and investment criteria that make their time incredibly valuable. A proposal, like ours, requires time and energy to review the operating model and consider the implications. When competing with, for example, a land-based flow-through salmon farm for investment consideration, a project like ours can be dismissed for being an unfamiliar concept and risk profile. Despite the general lack of any sustained success in the sector, quite a few funds are philosophically committed to the land-based operating model and projects outside of that scope are discarded.

I don’t think Marinova is alone in this regard. Raising capital is not easy and finding the right fit with investors and financial institutions takes time, dedication and patience.

Pan Ocean Aquaculture

When my colleagues, Mark van Leeuwen and Philip Schreven, brought the Marinova project to my attention, I was skeptical. I’ve been a salmon farmer for a long time and my initial reaction was that there was no way on God’s green earth the stars would align to make this project feasible. As our discussions progressed, 5 key elements convinced me of the merits and the 100% feasibility of the approach.

International law

Thanks, in part, to precedents established by the live marine transport of cattle, swine and sheep, international law protects our right to operate Marinova ships in international waters and to transit territorial waters for the purposes delivering salmon, crew changes, loading smolts, feed, fuel, conducting maintenance etc. Provided the vessels comply with the United Nations Convention of the Law of the Sea (UNCLOS), International Maritime Organization (IMO) regulations and the International Convention for the Prevention of Pollution from Ships (MARPOL), there is clear support for our operating model. No site-specific aquaculture permit for vessel activities will be required.  Experts in international marine law were consulted, and this understanding has been confirmed.

Bulk tankers as a working platform

I’ve posted a few articles recently about how cost effective these vessels are for doing the work we propose. Charter rates and selling prices are known and predictable, thousands of these vessels are safely navigating every ocean on the planet, and an extensive ecosystem of services and maintenance facilities exists to support their operation including crewing, port services and navigation systems. Our financial projections demonstrate that vessel operations – charter rates, fuel, maintenance and crew, will be roughly 30% of our production cost. This leaves plenty of room for feed, livestock, processing costs etc. and a competitive, profitable production cost.

Wind-assisted propulsion

Rotor sails for ocean-vessels are not new and with carbon-reduction and vessel emission targets becoming stricter in coming years, they are being installed in more vessels every year. In most applications, where vessels need to go from A to B in the most efficient route possible, they can deliver 10 – 15% in fuel savings. In our application, where speeds are slower and the primary objective is to maintain optimal temperatures and sea conditions, wind-assisted propulsion can deliver up to 90% of the forward motion required to navigate safely and move seawater through the aquaculture system. Excellent systems for route optimization are a key component of taking full advantage of the wind.

Closed-containment, flow-through seawater system

If you follow the fish media, and this blog, you’ll know that flow-through seawater and hybrid flow-through seawater systems are delivering excellent biological performance on their initial batches of salmon. While I have some concerns about long-term financial viability and scalability of these projects, it’s becoming clear that absent the challenge of having to manage the delicate water chemistry found in RAS systems, it becomes easier to manage fish performance. In our application where water is drawn from depth, filtered and disinfected and then fully exchanged 17 times per day (also filtered and disinfected on the way out), the salmon will have a protected and healthy environment in which to grow and thrive.

Remote management and monitoring

Live satelite monitoring of ocean conditions

In the past 10 years, satellite communications, AI feed monitoring, pellet-detection and camera systems have progressed leaps and bounds. These systems will allow shore-based teams to monitor daily feeding and health remotely while vessel crews focus on safe operation and maintenance of the vessel. Modern satellite systems will provide real-time temperature, wave-height and oxygen conditions for route-planning and safe navigation.

Key fish handling activities (health screening, transfers and grading etc.) will be handled in or near ports by veterinary and operating teams. While there will be a certain amount of daily maintenance required to support the flow-through system, and we will have crew on board to cover this need, the goal will be to automate to the greatest extent possible.

Summary

For anyone who reads my blog or LinkedIn posts routinely, you’ll know that my narrative tends to run in a self-deprecating direction but, if you’ll permit me a moment of shameless self-promotion, I’ll note that I have spent my salmon farming career building and/or re-building salmon farm teams and operations in remote, under-served regions. I think the basic operating model for Marinova is clear but recognize that it will take dedication, effort and experience to make it happen. On the vessel construction, shipyard and vessel management and engineering design side of things, Mark and Philip bring decades of offshore and construction experience that will be critical for effectively managing initial implementation and scaling of Marinova operations. Their experience with Pan Ocean Aquaculture over the past 10 years has been vital in progressing to this point. As a team, we are uniquely suited to delivering on this project.

Thanks for reading if you’ve made it this far. If you would like to discuss the project, let me know. Comments can be made below, via LinkedIn or email (info@alanwcook.com)