Challenges during the start up and development phase of private funded hatcheries involved in new sp

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Challenges during the start up and development
phase of private funded hatcheries involved in
new species

• Brian Blanchard
• Scotian Halibut Ltd.

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An Historical Perspective on Aquaculture
Development CommercializationThe Continuum
Research Development / Precommercial Commercial

• Duration of R, D, C phases vary, but
  generally decline
• along the continuum
• The level of risk diminishes along the
  continuum
• There is an ongoing development component
  (feedback)
• in commercial production in order to remain
  competitive

CAIA workshop, Ottawa, March 2003
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An Historical Perspective on Aquaculture
Development CommercializationThe Continuum

• Initial research are comparatively small
  e.g., cod
• Development precommercialization risky,
  need public /
• private partnerships (PPP)
• Ongoing development / research are needed
  from PPP
• Commercial production is strictly a private
  initiative

CAIA workshop, Ottawa, March 2003
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Alternate Marine Finfish Species Stages to
Commercial Operation

• Research
• (University and Govt Lab)
• Public
• Development
• (In Partnership with Industry)
• Public
• Commercial

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Commercialization CycleHatchery

• Private Outside forces Investment
  
• Year 1 2 3 4 5 6 7 8
  9 10
• 
  
• Sales must happen!!

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What do you know before start up
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Hatchery Startup
7 to 9 years for start up
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Land Based Culture

• Minimum 10 acres
• Flat terrain and easy to work with respect to
  excavation and site preparation
• Road access
• Electrical Access
• Fresh water supply
• Support services
• Access to labour force
• Availability

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Water Supply

• Sea water wells
• Thermally stable 70 C
• Low filtration requirements
• Low pathogen risk
• Deep water abstraction
• Relative thermal stability below thermal cline
• Low to moderate filtration depends upon water
  depth
• low to moderate pathogen risk
• Shallow water abstraction
• Thermally unstable Tidal influence
• High filtration requirement
• high pathogen risk

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Human Resources

• Training programs not specific
• Competition other sectors i.e environmental /
  it
• Competition government vs private.
• Wages and benefits not competative.
• Rural vs Urban (quality of life issues)

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Technical staff
Turn over starts Maintain gt70 staff retention
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Human ResourcesTurnover

• It takes about one to two years to train hatchery
  staff from a technical and operational point.
• Once staff is trained it is important to retain
  70 of the staff to maintain normal operations
  (this applies to turnover)

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Human Resource Development

• Invest in the staff
• Send to other sites to work
• Participate in conferences
• Encourage the building of networks
• Provide communication and management resources

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Hatchery inputs
Feed Suppliers change, new materials available,
standard items no longer available
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How to deal with Change

• Accept it
• After run workshops
• Annual summary workshops
• External audit of system
• Ask for help

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Equipment
Equipment failures and replacement becomes
common History / documentation - SOPs
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Sea Water Challenges

• Highly corrosive - Must use non- metallic
  materials
• Fouling - barnacles, shellfish, tunicates,
  invertebrates, algae.
• Highly conductive - electrical ground faults
  req..
• Buoyancy - Feed, fecal material etc.
• Solubility of gases - O2, CO2,

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Fish Health Issues
FH starts with scale up and Increased biomass
within Production tanks
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Fish Health
V
V
V
V
V
V
V vaccine available
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Fish Health Haddock Cod

• Gill disease (hatchery)
• husbandry and prophylactic treatment
• Nodavirus (hatchery and nursery phases)
• Vibriosis (ongrowing)
• relatively disease resistant
• no antibody response to vaccination
• vaccination efficacy

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Fatty Liver
HSI 18.4
Direct linear relationship between fat
consumption and hepatosomatic index
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Fish Heath - Bone Deformities
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Growth curve of production
Ideal

cull
Current production profile
0
10 gram
Size of fish
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Research Resources
Access to research resources to Assist in solving
production issues In house (how to pay for
it) External DFO, Universities
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Access to Capital

• Major constraint to growth
• Difficult to attract investors
• Banks are cautious about lending to aquaculture
• Gaps exist in programs to finance development
  activity
• Government agencies expect results to quickly
• Large fish companies are reluctant to invest

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Stages of Venture Capital Investments

• Seed/start-up stage is very early in the growth
  cycle of the business. Seed financing required
  for research and prototype development and to
  launch the business.
• Development stage refer to firms that have
  successfully implemented the project and
  completed the market research but have few, if
  any, commercial sales. Development financing is
  required to initiate full scale production.
• Expansion financing is provided for the initial
  expansion of a company that is producing and a
  saleable product that has not yet shown a profit.
  
• Mature stage companies have operated profitably
  for several years and would use additional
  investment to provide funding to further expand
  the business and to firmly establish market
  share.

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Stages of Venture Capital Investment
Venture Funding
Incubation
Investment Banking
Funding required
Profitability level
Failure Rate
Seed/Start-up
Development
Expansion
Maturity
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Access to Capital by Stage
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Biggest challenge

• Proving the financial viability
• Paper never refused ink yet!
• Demonstration is key

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Who should take the lead

• Horse Cart
• Chicken egg
• Government Industry
• Why
• long term economic prosperity based upon
  renewable resources