Mensis Mirabilis - The “Miracle Month” for RAS
First, what is RAS?
RAS stands for “Recirculation Aquaculture Systems” and this represents a new and unique way to farm fish. Instead of the traditional method of growing fish outdoors in net pens, open ponds or raceways, this system rears fish in indoor tanks in a controlled environment.
It is often considered the most environmentally friendly way to grow fish. No escapes. No fecal pollution on the seafloor, predators or antibiotics ever needed. Water recycling is in the mid-90s or possibly higher. Also, these farms can be located almost anywhere so you might even see this type of fish in a local farmers market near you at some point soon.
What has happened with RAS in the last month?
Quick answer, a lot. From the 4 weeks from January 28th to Feb 28th, twenty-four (24!) headlines topped the industry publications with overwhelmingly good news. That is a unique story nearly every single day. They fell into several categories including market expansion, finance and technology.
Across just 4 deals, approximately $850M was deployed into RAS projects. Of note amongst this group, the genetically modified salmon firm Aquabounty was oversubscribed on its public offering, raising $127M.
Production of salmon on land is materializing. US-based Atlantic Sapphire, which operates the “Bluehouse” in Florida is one of the most advanced facilities to date and announced expansion ahead of schedule. The company harvested their first tonnage at the end of 2020.
Perhaps the most striking headlines during this period were the multiple announcements of traditional net pen farmers making the move to RAS. Perhaps unfathomable a few years ago. These are some of the biggest, most mature companies in the business, like Oslo-listed Grieg Seafood and MOWI, that are now seeing an opportunity in this type of production system. It feels like a tipping point.
Why was last month so busy?
Why now? What exactly is happening? It's hard to know exactly what was so special about February 2021. Undoubtedly, it’s a combination of decades of technology development maturing, favorable financial markets as well as the anticipation of consumption as we near a post-pandemic world. The demand from places like China and the United States will far outstrip the production for the foreseeable future. Now add in the increasing demand for environmental stewardship to be included as part of the table stakes for doing business and you have potentially a perfect combination of forces coming into focus. Only one question remains: is this the beginning of an “Annus Mirabilis” for RAS?