September 3, 2008

"The time to make a bid for the future of the seafood industry is now."

Several items of industry news in recent days point to promising exits for the producers of novel aquaculture species in the coming years. Large, mainly European, seafood firms are going public and, with that currency, are poised to diversify species and regions through acquisition.

Aquacopia has investments in two cobia farms, Snapperfarm and Open Blue Sea Farms. Cobia is a white-fleshed fish that has been widely referenced in the trade press as "the next salmon."

The trend of initial public offerings of salmon farmers was covered on September 2 by IntraFish. SalMar, Grieg Seafood, and Lighthouse Caledonia hit the Oslo exchange in 2007. In the same year, Multiexport went public in Chile. Norway Royal Salmon is pending.

Spanish seafood giant, Pescanova, just aquired several Central American, vertically integrated shrimp farming companies.

In recent days, Marine Harvest ex-CEO Atle Eide penned an opinion piece in Intrafish exhorting Norway's investors and seafood industry towards ending a virtual boycott on further investment in the sector. He blames the endemic problems of "fluctuating prices, disease and dumping duties" for casting the irrational pall over seafood sector expansion, stating that they are expected elements of doing business.

After running the world's largest salmon farming firm, Eide joined energy private equity group HitecVision last year. He is upbeat about aquaculture, writing that "Fish farming and value-added seafood processing will be huge winners over the next decade," and predicting, specificially, "super profits" by producers and distributors.

"It is clear prime fish farming real estate and clean water are global commodities that will soon be in short supply. So companies with control over production licenses will be guaranteed good profits over the long run."

"The other obvious winner will be companies that have control over advanced value-added process production -- convenience food producers, supermarket and restaurant distributors, and possibly even brands themselves." He is less enthusiastic over the prospects for feed suppliers, equipment makers and others, consigning them to the "periphery of the industry."

Eide is also critical of Norwegian companies for being slow to engage with emerging aquaculture species. "There will never be a better time to stake out claims to the best positions... the potential upside is enormous," he writes. "In the global seafood industry, the train is departing from the station. The time to make a bid for the future of the seafood industry is now."

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