QUARTERLY UPDATE - JULY 2008
AQUACULTURE DEVELOPMENT COUNCIL
The Aquaculture Development Council (ADC) is focused on furthering the aquaculture industry in Western Australia through funding various projects.
Abalone Aquaculture South Coast Feasibility Study
The ADC contracted the Ord Group Pty Ltd in late 2005 to conduct a feasibility study regarding abalone aquaculture on the south coast of Western Australia. The Study was completed in July 2006.
The objective of the project was to determine the feasibility of the financial and operational viability of abalone aquaculture operations at a non-specific site situated on the south coast of Western Australia.
The study was conducted in two parts:
Part 1 was specific to the Bremer Bay abalone aquaculture precinct. This part of the study provided an assessment around the specific scenario of a merger between three farm operations at the existing Bremer Bay sites.
Part 2 built on the knowledge gained in Part 1 but also considered the scenario of the development of a similar large scale operation elsewhere on the south coast of Western Australia.
The outcomes of the project determined the feasibility and viability of:
• Characteristics of a general site and approval process
• Sales and marketing
• Land based facilities and production of post-larvae and juveniles
• Management of Risk
• Capital costs and operating expenses
• Characteristics of models
• Sensitivity analyses
• Project financing
Barramundi Hatchery Requirements
The ADC considered a project regarding barramundi hatchery requirements in mid 2006.
The objective of the project was to provide an assessment of the options and requirements for the establishment of a commercial hatchery to provide barramundi seed stock to meet the development needs of the barramundi aquaculture industry in Western Australia.
The project was not progressed due to lack of interest by the industry.
Processing Study (Remote Regions)
The ADC contracted Marine Produce Australia Pty Ltd in mid 2006 to conduct a pre-feasibility study regarding establishing suitable processing infrastructure to handle the proposed barramundi farm production from the Kimberley region of Western Australia The Study was completed in August 2006.
The objectives of the project were to provide a detailed analysis of the movement of fish from the farm gate through to processing, and to identify and define the best and most economically practical solution for processing fish produced by aquaculture in the Kimberley region.
The outcomes of the project determined the feasibility and viability of:
• Possible location of a processing facility
• Land component – size and cost
• Facility design and indicative cost to construct
• Plant and Equipment options including an indicative cost.
• Fixed and variable costs to process barramundi based on various budgeted product inflows.
Aquaculture Audit and Opportunity Study
The ADC contracted the Ord Group Pty Ltd in September 2006 to conduct a study into aquaculture audit and identify future opportunities. The Study was completed in November 2006
The objectives of the project were to receive an independent audit of the extent and outcome of aquaculture research and development activities in WA over the past 10 years by identifying all Western Australian private and publicly funded aquaculture R&D undertaken, and to assess the adoption of outputs from that R&D by the Western Australian aquaculture industry.
The outcomes of the project concluded that significant public and private benefits have accrued from this R&D and recommended that future public funding through the ADC needs to be actively managed as innovation support, rather than passively administered R&D grants.
Shark Bay Salt Aquaculture Feasibility Study
The ADC contracted RSM Bird Cameron to undertake a financial feasibility study of farming in a salt mining tenement at Useless Inlet, Shark Bay. The Study was completed in November 2007.
The objectives of the project were to undertake the first stage of an aquaculture development strategy to determine the commercial viability of sea-based aquaculture within the salt mining tenement of Shark Bay Salt Pty Ltd. If the financial feasibility looked attractive it was intended that a business plan would be prepared for a pilot scale aquaculture development.
The outcomes of the report concluded that the salt mining tenement at Shark Bay Salt was found to be unsuitable for profitable finfish farming. On the basis of the analysis performed by the consultant, it was determined that there were significant issues that needed to be addressed before the proposed project could become viable.
Rock Lobster Puerulus Aquaculture Economic Feasibility
The ADC contracted the Department of Fisheries Research Division to undertake an economic feasibility study of growing out rock lobster puerulus. The Study was completed in early 2008.
The objectives of the project were to identify which parameters, in a hypothetical Western Rock Lobster puerulus grow out farm, are likely to have the greatest impact on the profitability of such an operation. The study also aimed to assist both researchers and potential investors by identifying the most important profitability drivers for consideration in future research.
The study concluded that whilst rock lobster puerulus growout operations had proven to be economically viable in Vietnam, with average profit margins of 50%, there is uncertainty that similar economic returns would be found in countries where the cost of labour is much higher. The study indicated that profit margins in a Western Rock Lobster growout operation would need to overcome high labour and capital costs. Additionally, improved methods of gathering puerulus were required as was the development of a high growth, low cost feed formula and research into optimizing survival rate.
Market Study for Marine Finfish
The ADC contracted Synovate to undertake a market study of marine finfish. The study was completed in early 2007
The objectives of the project were to undertake a market study for selected fish species that could be produced by marine aquaculture projects located off the west coast of Western Australia
The study was undertaken in two parts. The first part provided an overview of the market factors with reference to the species under consideration, mainly in respect of supply, demand and value in export markets. The second part undertook the marketing research needed to develop more detailed information about key, identified market issues including product size and form, supply and demand factors in export markets, prices, competition and consumer preferences. The study also included consideration of the scale of production.
The outcomes of the project concluded that each market could be compared on consistent market selection criteria. The study also identified suitable export markets and species that offered the most compelling opportunities.
Inland Aquaculture
The ADC, in collaboration with Challenger TAFE, undertook a pre-feasibility study to examine the development of inland aquaculture in Western Australia. The study was completed in early 2006.
The objectives of the project were:
• To identify suitable water bodies in WA that could be used for the development of a commercially-viable inland aquaculture industry
• To determine if any identified water bodies could offer competitive advantages for aquaculture
• To identify any opportunities for a scale of aquaculture production that could overcome problems associated with supply chain management in remote areas.
• To identify potential markets, or the potential to develop markets for the products
• To identify whether the Semi Intensive Floating Tank System technology would be suitable for the commercial production of fish in identified inland water bodies.
The outcomes of the project determined the feasibility and viability of:
• Inland aquaculture site requirements
• Markets and marketing
• Financial feasibility; and
• Financial parameters and assumptions.
Current ADC Projects
Aquaculture Sites
The ADC in conjunction with the Department of Fisheries is undertaking a review of current and potential aquaculture sites in Western Australia.
This project involves two separate stages. Stage one outlines the process for assessing and allocating marine based aquaculture sites. The aim of the first stage is to review the existing site assessment and allocation processes for other states of Australia, and to make recommendation for the process of marine site assessment and allocation with consideration to WA legislation.
The second stage outlines the potentially suitable marine-based and land-based aquaculture sites. The aim of the second stage is to define selection criteria applicable to identifying suitable land-based or marine-based sites, and to list potential sites based on the identified criteria.
The two stages of the project are now complete, with the associated Report near finalisation.
Marine Finfish Innovation Roadmapping
The ADC is in the process of undertaking innovative strategic planning to further promote the development of aquaculture in Western Australia.
The Food and Agriculture Organisation has projected a rapidly increasing global demand for fish as a food source that is unlikely to be met through wild fishery capture.
This presents an exciting opportunity for Western Australian companies to secure a significant share of the growth in fish production required to overcome the global fish gap.
By utilising Innovation Roadmapping, a form of strategic planning for innovation, a number of workshops will be held to facilitate expert input into aquaculture market and technology analyses, augmented by innovation tools and resources. The market and technology analyses will lead to innovation insights capable of transforming the productivity of global aquaculture.
The workshops are scheduled throughout August and September 2008.
Open Ocean Aquaculture
The ADC in conjunction with the Department of Fisheries, as part of its strategy to develop a marine finfish aquaculture industry in Western Australia, is determining the feasibility of production in the open ocean.
This open ocean aquaculture project comprises a staged development strategy for the establishment of a new aquaculture industry producing large quantities of marine finfish in exposed or “open ocean” waters off the Western Australian coast.
The aim of the project is to identify the design parameters and basic operational and equipment requirements of a commercial scale open ocean aquaculture project. It will provide relevant specifications and costs in order to determine a preliminary economic feasibility of open ocean aquaculture off the Western Australian coast.
The development strategy for the open ocean aquaculture project comprises three stages:
Stage 1: Feasibility Study.
Stage 2: Demonstration Farm.
Stage 3: Commercial Farm
Stage 1, the feasibility study, was completed in December 2007. Ongoing work is now being undertaken for Stage Two of the project, development and operation of the demonstration farm. A major milestone for Stage Two, splashing cages in the water, is scheduled for June 2009.