Talking about AquaBounty's next steps in an interview with WeAreAquaculture earlier this year, Board Chair and CEO Sylvia Wulf said the company was at a point where it wanted to focus more on its work as a specialist RAS farmer. "In addition to exploring sales of other species, we can take what we're doing with salmon and expand geographically," she told us. Now, coinciding with the presentation of its Q3 2023 results, she has announced that Georgia will be the first location for this international expansion. It will do so together with Noble Salmon, a company formed to build and operate a recirculating aquaculture system (RAS) salmon farm in the former Soviet Republic.
"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," Wulf stated in conclusion in announcing the project. "We continue to make progress on leveraging and expanding our operational expertise internationally," she also said.
The truth is that, in the interview mentioned above, the then CEO and now also Board Chair of AquaBounty, told WeAreAquaculture about locations such as Brazil - where they have approval -; China - where she said they were pursuing field trials -; and also about the Middle East, Israel specifically. Finally, they have gone a little further north and Georgia is the location of choice after signing a non-binding memorandum of understanding (MOU) with Noble Salmon.
"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."
Sylvia Wulf, AquaBounty's Chair of the Board and CEO
Established to build and operate a RAS salmon farm in Georgia, Noble Salmon is owned by Benish Group. Its CEO, Meni Benish, is also co-founder of Archi, a leading engineering and real estate development company in the Republic of Georgia, as well as Chairman of the Israel-Georgia Chamber of Commerce.
"Benish Group will contribute expertise in engineering, material sourcing and permitting to the project, while AquaBounty will provide its experience successfully operating RAS farms through rigorous operating procedures and incorporating the latest technologies into the design of those farms," Sylvia Wulf explained on the agreement. "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."
Last June, AquaBounty announced that it was halting construction of its Ohio farm, but remarked that it still believed in the project. Two months later, in August, the company said it was still evaluating both the cost estimate and its options for moving forward with the completion of construction, and that it had selected Gilbane Building Company as its new construction firm.
According to Sylvia Wulf, they have been working over the past few months with the project's subcontractors to estimate the remaining cost to complete construction of the facility. That work has been completed and there is already a new estimate for the total project cost which is now in the range of USD 485-495 million (EUR 454-464 million), of which approximately USD 140 million (EUR 131 million) has already been spent.
"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," admitted the Chair of the Board and Chief Executive Officer of AquaBounty.
"Consistent with our commitment to environmental stewardship, the estimate includes a water/wastewater treatment facility to return water used in the farm to the local environment in an 'as clean' condition as when it was withdrawn, and in a manner that meets or exceeds applicable local and federal EPA standards, before it returns to the river," she continued. Wulf also said the company is negotiating elements of the estimated costs with Gilbane and, once completed, will finalize the Guaranteed Maximum Price that would provide a contractual cap on the total expenditure to complete the farm.
As said, this news about its international expansion and the status of its Ohio farm was included in AquaBounty's Q3 2023 results presentation. A quarter in which the company generated USD 733 thousand (EUR 686 thousand) in product revenue, up 12% year-on-year compared to Q3 2022, but also reported a net loss of USD 6.1 million (EUR 5.7 million) compared to USD 5.4 million (EUR 5 million) for the same period last year. Cash and cash equivalents and restricted cash totaled USD 17.8 million (EUR 16.6 million) on September 30, 2023, compared to USD 102.6 million (EUR 96.1 million) on December 31, 2022.
"Our third quarter results were impacted by a decline in market prices for Atlantic salmon that began during the second quarter, even though our Indiana farm exceeded its planned output," said Sylvia Wulf, Board Chair and Chief Executive Officer of the North American land-based salmon producer. "However, we continue to be encouraged by the demand for our fish."
"Our third quarter results were impacted by a decline in market prices for Atlantic salmon that began during the second quarter [...] However, we continue to be encouraged by the demand for our fish."
Sylvia Wulf, AquaBounty's Chair of the Board and CEO
In its goal to raise funds to continue construction in Ohio, AquaBounty said it is continuing its collaboration with Wells Fargo Corporate and Investment Banking. Its plan is to place a combination of taxable and tax-exempt bonds through the Toledo-Lucas County Port Authority for up to USD 425 million (EUR 398 million). In addition, the company is exploring a wide range of alternatives with Oppenheimer & Co. to complete additional capital requirements.
"Though there are significant steps and risks remaining to complete this process, we are excited to be working with our team of collaborators," said Wulf. It is worth remembering that last October, AquaBounty approved a reverse stock split to remain on the Nasdaq, which is critical to its intention to raise more capital. "The Board believes that this is the best direction going forward for the company and shareholders," Sylvia Wulf then stated.
AquaBounty Technologies, Inc. is a land-based fish farming expert raising Atlantic salmon in a vertically integrated manner, from broodstock to grow-out, to supply nearby markets. Currently, it operates a grow-out farm located in Indiana, USA, and a broodstock and egg production farm located on Prince Edward Island, Canada. Another farm is under construction in Pioneer, Ohio, USA, and the company has just announced a non-binding memorandum of understanding with Noble Salmon to build and operate a salmon RAS farm in the Republic of Georgia.
