American Aquafarms CEO: Local support is key to success in Maine

The U.S. state of Maine has become a hotbed of aquaculture activity, with numerous companies announcing plans to open recirculating aquaculture system farms, including Nordic Aquafarms in Belfast, Whole Oceans in Bucksport, Kingfish Zeeland in Jonesport, and Aquabanq in Millinocket.

As of Friday, 16 October, another company has arrived in the Pine Tree State: American Aquafarms, which has invested in a site in Gouldsboro as its base for a closed net-pen salmon farm, from which it hopes to produce 30,000 metric tons (MT) of Atlantic salmon by 2024.

In an interview with SeafoodSource, American Aquafarms President and CEO Mikael Rones, who is based in Norway, said after he exited the NorCod project in 2019, he locked in on Maine as an ideal location for his next venture.

“We looked at several areas over the U.S., and to us, we feel Maine is the right place based on water temperature and the potential of the industry in Maine. These are the two main reasons why we are there,” Rones said. “Maine, when we looked at the temperature of the water and the conditions we would be farming in, it was pretty similar to what we are used to [in Norway]. It will be easy to use the technology we developed over many years in Maine. The other reason we chose Maine was based on logistics. The carbon footprint of seafood is becoming more and more important, and while salmon production in the sea has a really low footprint, that disappears once you put it on an airplane and fly it all over the world.”

Producing salmon in Maine allows for a much shorter trip to market, and the ability to sell U.S.-raised salmon in the domestic market was another critical factor in American Aquafarms’ decision, Rones said.

“The U.S. today, of course, imports 90 percent of its seafood consumption. That has to change,” Rones said.

While the coronavirus crisis has created complications both in the launch of the project and in the salmon market globally, Rones said he is confident salmon prices will settle at a place where American Aquafarms can make a profit, even with its 30,000 MT of production being added to significant volumes coming online eventually from other American-based operations, ranging from Atlantic Sapphire’s 100,000 MT RAS farm in Florida, to Nordic Aquafarms’ proposed RAS in California, to the recently announced West Coast Salmon RAS in Nevada, which will produce up to 12,600 MT of salmon in coming years and 50,000 MT of salmon if the project moves through all three phases of growth.

“COVID-19 has obviously had an impact on the short-term demand and prices, but the demand for production of marine protein from fish-farming is part of a very strong long-term mega-trend, and we are comfortable that the industry will have a healthy growth over the next few decades,” Rones said.

What separates American Aquafarms from its U.S. competitors, Rones said, is its plan not to build an RAS, but rather to grow salmon in up to 30 closed net-pens, each capable of producing up to 1,000 MT of salmon per cycle.

“The whole idea is that we utilize technology that has a robust base, and while we are excited by the development of RAS technology, we have chosen to go for a technology that we feel have a lower risk," American Aquafarms Vice President Eirik Jørs told SeafoodSource.

American Aquafarms has chosen to use “Eco-pens,” which Jørs said incorporate technology that has been “tested for decades” in Norway, and which have recently also been selected for use in North America by others.

“The technology we’re suggesting is basically the same principle of open-pen except for the fact we can control a lot more of the variables, including waste treatment, and there’s a lot more security regarding escapes,” he said, describing the chance of escape as “nearly impossible.”

“The Eco-pens have such robust construction, it takes a lot to endanger the operation and security of the fish,” Jørs said.

Rones said he hopes to win over skeptics in Maine by touting the technological capabilities of Eco-pens.

“It demands a higher investment compared with open-pen systems, but we are getting to point where we need to take care of the environment. This is well-proven technology, but also, this is not traditional net-pen salmon farming. We all know the challenges with traditional fish farming when looking at sea lice, temperature control, and other problems, and that’s the reason we’re looking at the Eco-pen system,” he said. “This is the next generation of fish-farming in the sea, which is, in our view, the natural habitat for fish to grow in.”

But before the pens even get in the water, American Aquafarms has a significant challenge in front of it: winning permits and approval to use local waters – already occupied by Maine’s iconic and lucrative lobster fishery – for its own operations. Rones said company officials have already met with local lobstermen twice, and more meetings are planned in the future to avoid any potential conflicts of interest.

“We are trying to go into these communities with respect. It’s important we are humble when we are going in. We want this to be a collaborative process, but [we know] resistance can happen,” he said. “We’ve been pretty clear we’re trying to work with and not against the locals and that we want to respect their wishes [and earn] support from them. We are working closely with them so the build-up is done in a way that doesn’t harm any other industries over there.”

American Aquafarms needs both local and state permits. Rones said if and when the company receives permitting, it will then be another six months before the first pens go in the water, and that the operation will be grown out over several years, with the likely addition of 10 pens per year.

In the meantime, work will likely begin sooner on a hatchery and grow-out facility at the former Maine Fair Trade Lobster facility that American Aquafarms is purchasing from East Coast. The plant will also host processing capabilities, but those will not be added until the construction of the hatchery is completed, Rones said.

Rones declined to identify a ballpark figure for how much the project would cost, but said financing is not a concern and added he is not looking to take the company public.

“We have no plans for an IPO,” he said. “Our one and only goal is to get the project up and running.”

Rones said he’s hoping the company benefits from Maine’s growing familiarity with the aquaculture sector, which has existed in the state for decades, but has achieved a higher profile recently due to all the new projects flooding into the state.

“It’s healthy for us that the industry is already there,” he said. “We don’t feel like we are competing with [them]. In this market, we are all trying to build up the industry, and hopefully out of that we can get some synergy. We also acknowledge we need to do more training get qualified people and those efforts are already underway.”

Rones said that while the company has Norwegian backing, it intends to have American co-ownership in the future, especially from Maine, and it would seek to bring its suppliers into the U.S. or to convince them to use local contractors, so that the local economy further benefits from the project.

“We are an American company. We’re not trying to be a Norwegian company. We want to use the best technology, but we also want that to be U.S. technology. We have the passion and knowledge to try to create an American company,” he said. “COVID-19 makes this more challenging, but it’s still doable.”

Photo courtesy of American Aquafarms