AquaBounty signs deal to build salmon farm in Republic of Georgia

AquaBounty Technologies has entered into a memorandum of understanding (MoU) with Noble Salmon, a company formed to build and operate a recirculating aquaculture system (RAS) salmon farm in the Republic of Georgia. 

Noble Salmon was formed by the Benish Group, a company founded by Chaim Benish in 1981 that operates in 14 countries, including Switzerland, the Netherlands, Israel, Azerbaijan, Ukraine, Malta, Georgia, Kazakhstan, Moldova, Brazil, Argentina, and Uruguay. The company’s CEO, Meni Benish, is also the co-founder of Archi, a real estate development firm in Georgia, and is the chair of the Israel-Georgia Chamber of Commerce.

AquaBounty CEO Sylvia Wulf, in the company’s Q3 2023 results, said the Benish Group will contribute expertise in engineering, material sourcing, and permitting for the project while AquaBounty will bring its experience in operating its RAS farms.

“The combination of capabilities of the two companies benefits the construction and operation of a planned state-of-the-art RAS farm focused on producing Atlantic salmon for sale in nearby markets,” Wulf said. “This project will be the first instance of AquaBounty executing its strategy to enter additional salmon markets through local partnerships in a capital-lite structure.”

AquaBounty has planned to enter a market outside of the U.S. for years, and originally told SeafoodSource in 2019 that it was pursuing opportunities in China before ultimately pulling back on those plans earlier this year.

The company also announced the updated cost estimates for its Pioneer, Ohio, U.S.A.-based RAS salmon farm. The company paused construction on the farm in June 2023 after cost estimates began to balloon past the initial estimate of USD 200 million (EUR 186 million) before it broke ground to as high as USD 375 million to USD 395 million (EUR 350 million to EUR 369 million).

Since the pause, the company selected Gilbane Building Company as a new construction firm for the project, and has been on a new estimate. Now, the company said, the total project cost is in the range of USD 485 million to USD 495 million (EUR 453 million to EUR 462 million).

“We recognize this is substantially higher than previous ranges, but the updated estimates incorporate the highly inflationary environment for labor and materials, particularly concrete and piping, that have impacted construction projects over the last three years,” Wulf said.

The company also said it has spent approximately USD 140 million (EUR 130 million) on the project to date.

Wulf said the company is continuing to collaborate with Wells Fargo Corporate and Investment Banking to secure the financing it needs to resume construction on the Ohio farm.

“Though there are significant steps and risks remaining to complete this process, we are excited to be working with our team of collaborators,” she said.

In its Q3 2023 results, AquaBounty said it generated USD 733,000 (EUR 684,000) in revenue, up from USD 653,000 (EUR 610,000) in the third quarter of 2022, but down from the USD 788,000 (EUR 736,000) it posted in Q2 2023.

Net losses in Q3 2023 reached USD 6.1 million (EUR 5.7 million), compared to net losses of USD 5.4 million (EUR 5 million) in Q3 2022. That total was a slight improvement from the USD 6.5 million (EUR 6 million) net loss posted in Q2 2023.

The results follow AquaBounty’s reverse stock split, executed in an effort to meet Nasdaq Capital Market’s required stock price of USD 1.00 (EUR 0.93). The company was first warned on 31 October, 2022, that it needed to bring its share price above USD 1.00 to remain listed.

Soon after the split, the company’s stock price dropped to an all-time low before recovering slightly, closing the day of 8 November at USD 2.96 (EUR 2.76) per share.  

Photo courtesy of AquaBounty