Offshore aquaculture taking off in Southeast Asia

The development of large-scale offshore aquaculture is seen by many as the best method for Southeast Asia to meet growing seafood demand in the region – and demand for increasingly scarce marine species like grouper in particular. Believers in the bright potential of offshore aquaculture in the region include Lukas Manomaitis, an aquaculture and seafood consultant at Seafood Consulting Associates in Bangkok, Thailand. Formed in 2001, the firm’s main client is the U.S. Soybean Export Council (USSEC). Manomaitis serves as aquaculture program technical contractor for USSEC in Southeast Asia, overseeing training and promotion programs to promote the use of soy in aquaculture in key producing countries like Indonesia, Philippines, Thailand and Vietnam.

SeafoodSource: What's stimulating the growth in offshore aquaculture in Southeast Asia?

Manomaitis: There are a few reasons why we are seeing rising interest in offshore aquaculture in Southeast Asia. In short, we see that most of the wild-capture fisheries in the region are under severe stress. With the exception of Indonesia, which still seems to have some strong fisheries stocks, the other Southeast Asian nations will need to find other ways to supply their marine fish demand. If we look at Southeast Asia as a region, is a bit surprising how little marine fish are being produced through aquaculture. For contrast, look at Norway, a country with about five million people, produces over 1.5 million metric tons of marine fish per year. There are strong offshore cage operations in other places around the world – for example Scotland, Australia, Canada, Turkey, and so on – but almost all marine fish culture in Southeast Asia is produced in what we call nearshore cage aquaculture systems. As a result, what we see is that there is very limited production due to issues with disease and resource conflict.

SeafoodSource: What species have the best potential for offshore aquaculture operations in Southeast Asia?

Manomaitis: Currently, the largest marine fish produced through aquaculture in the region is milkfish, but milkfish is not a high-value species and is not well known or appreciated outside of the Philippines, Indonesia, Taiwan and maybe parts of China. The remainder of the marine fish production is geared towards live market sales, so, for example, grouper or other high-value species. This low level of production cannot continue if the industry is going to try to replace the marine fish that are no longer going to be available from the wild. Essentially, the time is coming were Southeast Asia is going to have to step up and start producing marine fish using the best available technologies and moving towards a more industrial scale of production. The only way this can happen in volume is to use offshore cage aquaculture. The way I see this is simply Southeast Asia catching up with the rest the world when it comes to marine fish production.

SeafoodSource: Is offshore aquaculture in the region state-driven, or there are key private players?

Manomaitis: The move to offshore cage aquaculture per marine fish is driven by several different kinds of players in the region. Generally speaking, we feel that commercial industry is always the one that is going to move things the most quickly. However, in this case, governments are also starting to see the value in looking at higher-volume production of marine fish. Aside from commercial interests and government, there is also interest by other organizations trying to promote the move to offshore cage aquaculture. For example my client, the U.S. Soybean Export Council (USSEC), has had an aggressive approach to helping to promote the offshore cage industry to Southeast Asia. The reason that this is the case is because it seems inevitable that offshore cage aquaculture will be the future of marine fish production in Southeast Asia and from the standpoint of an organization that promotes feed-based aquaculture, a move to a more industrial approach to fish production will result in greater use of high-quality feeds. Offshore cage and offshore cage-like operations have existed in Southeast Asia for quite some time. But there were several things holding back the industry from growing.

However, what we are seeing now seems to be a growing recognition that offshore cage aquaculture has a future Southeast Asia. For example, in Indonesia, the government is opening three offshore cage aquaculture sites to test the technology. We are also seeing private investors starting to test the waters, investigating the best approaches towards cage aquaculture both in the technology approach and what species might be the target. An example of this is Marine Life Aquaculture in Singapore, which has cages situated in deep waters near St. John's Island close to Singapore. There's also interest from other investment firms as well as companies that are in the agriculture sector that have an interest in moving into an integrated approach to production of marine fish for export.

SeafoodSource: What are the key challenges to growing offshore cage aquaculture in the region?

Manomaitis: The biggest challenge to offshore cage aquaculture in Southeast Asia can be summarized in one word: security. Offshore cage culture technology is already successfully run around the world. Although there is always room for improvement, the basics of the technology, equipment and the approach are well-known. In Southeast Asia, even nearshore cages have problems with security and theft is always a real danger. The second-largest challenge for offshore cage aquaculture is getting regional governments to understand the value of moving to this kind of approach for production marine fish. In particular, governments are going to be have to become involved in the zoning and licensing of production areas and in establishing the regulations and enforcement the go along with having these kind of areas.

So, for security and the zoning and licensing issues, government is going to have to play a very important role. Many of the regional governments still look at aquaculture as something that is for subsistence or small-scale production. Often, there is a desire to help support the many small farmers that exist. When it comes to marine fish production, nearshore cages require a lot of small farmers. But it is not an efficient way to produce marine fish. In fact, you could almost say that nearshore cage aquaculture produces more dead fish than live fish. When it comes to marine fish production, a move to offshore cage aquaculture will result in less marine fish farmers, however, as was the case in Turkey, the expectation is that the number of people employed by the overall industry will be larger. Fewer larger farms will require fewer farmers but more people to work in the associated support industries such as trucking, support services such as net-cleaning, fish processing and so on.

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SeafoodSource: Do you foresee difficulties in acquiring broodstock for mass production of marine species?

Manomaitis: If issues with governments could be taken care of, there would still be some issues that are of critical importance to moving this industry forward. The first is broodstock. When it comes to marine fish, it takes time to develop the number and quality of broodstock required to supply a commercial industry. Unlike freshwater fish, where broodstock can be developed in less than a year, marine fish at minimum take two to three years. In addition there are also many different kinds of diseases to contend with. Also unlike freshwater fish, marine fish require very specific kinds of early feeds that require very qualified staff to produce.

Generally speaking, when it comes to industrial offshore marine cage aquaculture, the hatchery issue is going to be a large one because are going to need to see the development of much larger-scale hatcheries then we have in Southeast Asia today. The current situation in Southeast Asia is the most hatcheries are very small when it comes to marine fish, and they cannot produce the quantities of the qualities marine fish fingerlings we need. Again, Turkey may be a good example in this case particularly because the government developed the initial technology for marine fish hatcheries and then got out of the industry and let commercial firms take over. This is something that Southeast Asian governments should learn to emulate.

SeafoodSource: Is convincing investors a challenge?

Manomaitis: Another important issue will be the cost of investment into these kinds of offshore cage aquaculture systems. Investors are looking carefully at the potentials for increasing the volumes of marine fish produced. Some of the concerns they have are the fact there are few large-scale operations currently operating in Southeast Asia. They would prefer to invest in existing operations and to help them expand. At the moment is also a lack of aquaculture insurance – one of the key concerns by investors is the occurrence of disease in the aquaculture industry. While insurance and reinsurance companies are looking at aquaculture, this kind of coverage is not yet commonly used by aquaculture operators. Another thing that investors looking for are vertically integrated operations that cover broodstock, hatchery, nursery, production, feeds, processing and even export. While this is possible in some countries in Southeast Asia, some countries are unable to allow outside investors to invest in the full vertically integrated chain.

SeafoodSource: What are the main species involved in offshore aquaculture? Are they higher value species?

Manomaitis: Generally speaking, there is not been a decision on which species to use for offshore cage aquaculture in Southeast Asia. Potential marine species include those that are low value to the very high-value species. Again, the issue comes with obtaining the broodstock and seed for the species. It takes a long time to develop a new species and, aside from the broodstock and fingerling resources, we also need to think about the target markets. For example, milkfish is commonly produced in Indonesia and the Philippines and is well-liked by local population, but it has a low value and a low margin, aside from the fact that there really is no significant export market for the species. There are some mid-value species, such as Asian seabass or pompano, that could be developed further and Asian seabass has potential, due to the fact that Singapore has an active genetics program for Asian seabass. Another species under consideration is cobia, which is a fast-growing fish and has a developing market. The ideal situation would be to copy what has already been done successfully in other places around the world. In many places, high-value species, such as salmon, were the first species to come into the market. If any species fits this description in Southeast Asia, it might be grouper. However, the genetics resources and the understanding of the species still far behind the other species named. If a hybrid grouper could be developed for commercial use, this might unlock significant resources to develop offshore cage aquaculture.

If we are going to develop a successful offshore cage aquaculture industry in Southeast Asia, we will have to focus on the export sector internationally. The national domestic markets and regional markets probably cannot quickly absorb dramatic changes in the volumes produced by aquaculture. This is why it is important that when governments, investors, and others interested in this industry are looking to develop, they will need to think about what the market will be and how those markets will be developed.