Tightened funding situation for RAS projects not deterring The Kingfish Company’s Ohad Maiman

The Kingfish Company will report its 2021 year-end results along with its Q1 2022 results on Thursday, April 21, with the company finishing up an expansion of its recirculating aquaculture system (RAS) farm in Kats, the Netherlands, and pressing forward with its North American RAS farm in Jonesport, Maine, U.S.A.

In January 2022, it reported sales of EUR 10.4 million (USD 11.7 million), up from the EUR 5 million (USD 5.6 million) it earned in 2021. That was based on a doubling of sales volumes, from 467 metric tons (MT) to 902 MT. It did not report earnings.

On 8 April, the company announced its promotion of Kees Kloet from chief operating officer to the newly created role of chief technology officer. The Kingfish Company said it will expand its executive committee to include the CEO, CTO, CFO, and COO on 1 May, with the company seeking to appoint a new COO and CFO soon.

“The Kingfish Company is pleased to strengthen and re-align the focus areas for the various management team roles and has decided that it is time to move to an expanded senior management set-up,” the company said in an announcement posted on the Oslo Stock Exchange, where it is listed. “With this new set-up, The Kingfish Company is confident that it will support and contribute towards its ambitious growth plans for the years to come.”

The company is in the process of expanding production in its Dutch facility from its current capacity of 1,500 MT annually to 3,500 MT by the second half of 2022, thanks in part to a EUR 10 million (EUR 10.8 million) bridge facility provided by Rabobank, which it announced in January 2022. Additionally, it said in its update that in the U.S., permitting for the company’s 8,500-MT-capacity facility “is progressing as planned.”

In an interview at the 2022 Seafood Expo North America in March, Kingfish Company CEO Ohad Maiman told SeafoodSource while the company has received all its compulsory permits to begin site work, is still waiting on permits from the U.S. Army Corps of Engineers and the Jonesport Planning Board to build the RAS unit. In the meantime, Maiman said, it is advancing work on the project where possible.

“We are already clear for groundwork and we've selected a subcontractor for it. But we're now working on additional pre-construction, identification of more subcontractors, and funding to line up groundwork straight into construction,” he said, adding the company is working with existing kingfish Broodstock in Maine and is preparing to fly in additional broodstock from the Netherlands.

However, the company is still seeking additional funding for the project, Maiman said.

“I would say funding for growth right now is not optimal,” he said. “We are working still with several banks and continue to have investor relations and incoming approaches, but we need to find efficient funding and the right moment in time to move it forward. And then we will be better ready to execute efficiently. So we have patience but we’re working hard to expedite where possible.”

The long-term outlook for the project’s success is still positive, Maiman said. With the COVID-19 pandemic pushing Americans to try new types of seafood and eat more fish overall, the business proposition for the farm is strong, he said.

“We made a decision as far back as 2018 to allocate about 20 percent of our Netherlands output … to first gauge and then confirm the business case to operate in the U.S. We’re building that runway to eventually replace our Dutch product with supply from the U.S. And we hired Lauren Enz in August of last year and her job is particularly to nurture these strategic lines that we start with now in smaller volumes. We have the expectation set on both sides and the runway to ramp up as the volumes increase,” Maiman said. “I think the combination of the earlier focus on retail that we started doing in 2020, as well as the increased consumer interest in home-cooking and culinary experimentation, along with our presence nationwide in Whole Foods, will now be a key strategic account for us to build this long-term familiarity with the American consumer.”

Despite an initial warm welcome from the Jonesport community, The Kingfish Company is facing an additional obstacle in the form of stiffening opposition from some local lobstermen who fish near the company’s planned discharge pipe, and environmental groups, including The Sierra Club. Several local residents raised concerns about the project at a recent Jonesport Planning Board meeting, according to Spectrum News.

“Our approach from the beginning was to leave it to the town to decide if they want us there. If they do, we'll build there. If they don't, we'll find somewhere else,” Maiman said. “We have tried very hard to engage with the community and listen to their concerns. There were concerns about the temperature of our discharge, so we added the heat exchangers to make sure that our discharge is in a very narrow limit close to ambient temperature. I think that went quite far. And we made the pipe shorter to address concerns that it might interfere with local marine operations.”

Maiman said he tells those with concerns about the project that “the onus is on us to operate responsibly.”

“If we don't, we'll be shut down. The risk quite uniquely sits with the operator. Because first you have to make a substantial investment that you cannot move. And then you're – rightfully – constantly monitored. But even if we weren't, we cannot afford to foul the water from which we raise our fish,” he said.

In March, Maiman, Kloet, and other Kingfish Company executives made their first visit back to Jonesport since 2019. But the Kingfish Company has tried to build its ties to the local community, even though its executives have been stuck in the Netherlands through the COVID-19 pandemic, Maiman said.

“We want to have people get more familiar with what we're doing and our culture. We were lucky to have our local team there on the ground regularly engaging with the community [through the pandemic]. We built a small tilapia RAS system at the high school, so the students there are getting familiar with aquaculture – and for us, that is very important, because that would be the first place we will look for future employees,” Maiman said. “We feel a lot of familiarity between operating in Zealand and operating in Washington County. It may be [they speak] a different language, but people have a very similar mentality.”

Even with so much still uncertain about the future of the project, Maiman said he tries to remain confident and levelheaded.

“I can't imagine living the ups and downs – that would get me too much. Some calmness is needed. Some stubbornness is needed,” he said. “I think that we're we've grown more confident as we've been able to build the system through the market. Now the only question is whether the development will be faster or slower, but the thesis of farming and selling a high-value species in an import-dependent market has proved itself for us, both in Europe and the U.S. And other than the excitement of wanting things fast, I’m okay with the process. It doesn't really matter if it takes us three or five or seven years to reach these goals.”

Photo courtesy of Cliff White/SeafoodSource