the siaf apras model - intrafish...
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The SIAF APRAS Model A Paradigm Shift in 21st Century Aquaculture
presented by
Anthony C. Ostrowski, Ph.D. Chief Scientific Officer, Sino Agro Food, Inc.
19 May 2016 · IntraFish Seafood Investor Forum · New York, New York
SIAF Overview
Company History:. Incorporated 1974 in Nevada, USA. Corporate HQ in Guangzhou, China since 2007. Quoted on OTCQX, USA and Merkur Market of Oslo Børs, Norway. Revenues = $429 M in 2015.
Divisions: Aquaculture • Plantation • Beef Cattle • Organic Fertilizer & Feed • Corporate
Target Market: Growing middle class in China > ¥60,000 RMB ($9,000) income/year, mainly urban.
Technologies: A-Power re-circulating aquaculture system (APRAS), proprietary enzymes for animal feed and fertilizer.
Competitive Edge: Focused niche products and markets; experienced management; vertically integrated operations; third party certified sustainable production practices; year-round indoor aquaculture; joint ventures; co-operative farming business model, good working relationships with Chinese authorities.
Business Model:. Vertically integrated primary producer and distributor of natural, sustainable protein and plant foods, animal feed, organic fertilizer. Value-added processor. Scalable, modular facilities. Certified & traceable, “Farm-to-Plate” brand objectives.
Strategy: Maximize economic efficiency in the protein food value chain in China.
10%
45%
65%
Why Aquaculture?
Increasing demand Stagnant Wild Capture 70 MMT more by 2050
All from Aquaculture
Aquaculture (% of world seafood production)
70 MMT
Why Seafood?
FCR Cattle 8:1 Swine 4:1 Chickens 2:1 Salmon 1:1 Aquaculture* 0.5:1
Seafood as a Protein Producer (FCR= dry feed fed/wet weight gain)
*www.iffo.net/downloads/100.pdf
+
0
10
20
30
40
50
60
1990 1995 2000 2005 2010 2015 2020 2025 2030
Growth of the Chinese Middle Class*
Urban Rural Total
0
10
20
30
40
50
60
1990 1995 2000 2005 2010 2015 2020 2025 2030
Growth of the Chinese Middle Class*
Urban Rural Total
55.0
1.0
2.1
42.5
19.6
10.1
25.3
37.5
3.4 3.5 7.1
% o
f to
tal h
ou
seh
old
s
~6 MMT more high-
value seafood needed
World Bank : ~13 MMT total more seafood needed in China alone by 2030**
Why China?
*Source: ‘Understanding China’s Middle-Class’, Song &Cui, chinabusinessreview.com, Jan-Feb 2009 **Source: World Bank. 2013. Fish to 2030.
169 m people
50%
Description:
APRAS indoor aquaculture with aquaponic vegetables, land fruit, ornamental & value-added plant production
Strategy:
Sustainable production practices; green, holistic facility management; nutrient recycling & wetland & bird sanctuary
Location:
Strategic prime agricultural land in Zhongshan, Guangdong Province, PRC
Land Area:
3,700 mu (600 acres)
Prawn targets*:
Phase I (10,000 MT) – end 2017
Phase II (70,000 MT) – end 2020
Phase III (130,000 MT) – end 2024
Tech Owner:
11th generation APT, licensed by Capital Award, Inc. (a wholly owned subsidiary)
Holistic approach
Phase I
M. rosenbergii
MegaFarm Overview
* Minimum operational target
THE PARADIGM SHIFT
[PERCENTAGE]
[PERCENTAGE]
[PERCENTAGE]
0.04%
[PERCENTAGE]
Inland & Ponds
Racks (oysters)
Net Pens/Cages
RAS
(45 MMT)
(15 MMT)
(6 MMT) (6 MMT)
(0.025 MMT)
2Data from FAO, 2014. Status of World Fisheries. www.FAO.org/3/a-i3720e.pdf
1Data from Ecoplan International Inc. 2008. Global assessment of closed system aquaculture.79p.
RAS represents only 0.04%1 of world 66.6 MMT2 aquaculture food production
World Aquaculture Methods
Low water consumption Recirculation (<5% loss/d)
Minimal land use Higher densities (50 vs. 15 kg/m3 for salmon pen)
Better hygiene and disease management Eliminates “excludable” diseases & controlled environment reduces stress on animals
Reduces environmental effects Controlled waste management & nutrient cycling
Prevents biological effects No escapees
Reduces visual effects Minimal land use
Reduces carbon footprint Can locate farm close to markets
Advantages of RAS
Indoor RAS
Ponds
Net Pens
So Why Not RAS Everywhere?
Financials (USD)
Net Pen RAS
Revenues $10,478,750 $10,478,750
Gross Profit $ 4,128,260 (39%)
$ 3,243,246 (31%)
Operating Income (depreciation)
$ 2,927,700 (28%)
$ 1,557,802 (15%)
Income (loan interest, private credit)
$ 2,641,147 (25%)
$ 381,467 (4%)
Capital Investment $ 5,000,716 $22,622,885
ROI 53% 2%
Salmon Financials* (3rd year of operation)
*Boulet et al., 2010. DFO. Canada.61 p.
Data Source: 1SIAF (May 2016, Phase II) 2 Swedbank, 2015 (10K MT)
Net Pen A. Salmon (S. salar)
RAS A. Salmon (S. salar)
APRAS Prawn
(M. rosenbergii)
Culture space (m2)
9,000 (1,250 MT/yr)
13,928 (1,250 MT/yr)
25,000 (10,000 MT/yr)
Capital Costs (Capex) (USD/kg)
$2.00 $9.05 $4.001 - $6.002
Turnover Rate (MT/m3/yr)
0.14 (15 kg/m3)
0.12 (50 kg/m3)
0.42 (<50 kg/m3)
FOB Sales Price (USD/kg)
$5.05 (fresh)
$5.05 (fresh)
$15.00 (live)
Production Costs (USD/kg)
$3.06 (61% of FOB)
$3.48 (69% of FOB)
$5.20 (37% of FOB)
ROI (% Capex)
53% 2% 163%2
The APRAS Paradigm Advantage
THE COMPETITIVE EDGE
SIAF RAS
Seed
Feed
Mortality
Gross Profit 15%
9%
16%
Open Ponds
Seed
Feed
Mortality
Gross Profit
26% 25%
9%
60%
40%
0.1-0.5 ha/1.5-7.5 mu
Asian Outdoor Open Ponds
SIAF Indoor APRAS
FCR = 0.9
FCR = 2.0
FCR = dry feed fed/wet weight gain
Year-round, reliable, consistent production
Seasonal, unpredictable, variable production
Efficient Production
21.6 M seed/cycle
High Turnover
600K (x 36 tanks)
270K (x 36 tanks) 272K
(x 48 tanks) 1,280K
(x 3 tank)
Indoor RAS (24 mu) (phased growout, partial harvest)
Outdoor Open Ponds (216 mu) (all in/all out)
10% mortality
2% mortality
2% mortality 1% mortality
6 gm
(66 gm) (17 gm) (10 gm)
4 wk 4 wk 4 wk 3 wk
114 x’s greater yield
14 cycles/yr
52 MT/c 253 MT/c $ $
273 MT/mu/yr
105 day cycle
M. rosenbergii
6,552 MT/yr
400K (x 54 ponds)
@ 150/m2
240K (x 54 ponds)
21.6 M seed/cycle
90-120 day cycle
40% mortality
20 gm
(4 mu = 2,667 m2)
518 MT/yr
2 cycles/yr
$
2.4 MT/mu/yr
L. vannamei
163 MT/c
270K (x 36 tanks)
6 gm
$
13 times greater production (MT/yr) 114 times greater yield (MT/area/yr)
APRAS Strategy =
Small APRAS Footprint
Asian 4 mu open ponds at 2 cycles/yr
30 ponds 120 mu 2.4 MT/mu/yr 288 MT/yr
SIAF RAS at 14 cycles/yr vs.
1.1 mu
Small MegaFarm Footprint
Vietnam 2015 L. vannamei production = 300,000 MT
Area is 0.2% of Tra Vinh Province
MegaFarm 2025 = 300,000 MT*
Mekong Delta Provinces = 9.6 million acres
*Master Plan theoretical maximum. Operational minimum based on historical production is 130,000+MT/yr
(¥238/市斤 = $73/kg)
(¥60/市斤= $18.50/kg)
King Crab (3-5 kg)
Giant prawn M. rosenbergii
(¥368/市斤 = $113/kg)
(¥72/市斤 = $22/kg)
Large Groupers (3-5 kg)
White shrimp L. vannamei
High Price
Pearl River Delta = 120M people eating 4 MMT seafood/yr
Sustainability Sweet Spot
Environmental Decreased pollution
Decreased land use Decreased water use Decreased fishmeal use Decreased carbon footprint Third party certification & traceability
Economic Efficient protein producer Yield maximization High gross profits High ROI
Social Heart healthy seafood
Low carbohydrate & fat Omega 3 fatty acids
Jobs creation 8,000 x 10
SIAF APRAS
Social
Environmental Economic
*Tom Vilsak, USDA 2015 Dietary Guidelines “sustainable diet” = promotes: health & well-being; food security; preserves human & natural resources
Sustainability Triad*
SIAF = 21st Century Aquaculture
THANK YOU!
Sustainable Intelligent Aqua Farming
General
This presentation has been prepared by Sino Agro Food, Inc. (“SIAF” or “the Company”) solely for informational purposes. The information contained herein has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions in this presentation. SIAF makes no representations (expressed or implied) regarding information contained in, or any omissions from, this presentation or any other written or oral communications transmitted to the recipient. Neither SIAF nor any of its affiliates, advisors or representatives, will be liable for any loss arising from any connection to, or use of, this presentation or its contents.
This presentation does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
The Company undertakes no obligation or responsibility to update any of the information contained in this document. Nothing contained in this document shall be relied upon as a promise or representation as to the past or future performance of the Company.
Forward-Looking Statements
This presentation may contain forward-looking statements relating to the business of SIAF and its subsidiary companies. All statements other than historical facts are forward-looking statements. These include statements about future results of operations and capital plans. We caution investors that these forward-looking statements do not guarantee future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties, including those described in filings we make with the SEC.