Building lives through aquaculture, sustainably
LIM Shrimp Organization has the accolade of many firsts, including building the world's largest shrimp farm, and first introducing Pacific white shrimp to Indonesia. But its name is a misnomer.
In a review of the state of world aquaculture in 2012, the Food and Agriculture Organisation (FAO) of the United Nations reported that the average annual growth rate of aquaculture was over 6%, with the Asia-Pacific region accounting for nearly 90% of production volume. These figures bring aquaculture to the forefront, indicating that it is the fastest growing livestock sector, and the most important animal food source in Asia.
Aquaculture can help provide livelihoods for local producers and farmers, but only if it is truly sustainable, according to the World Bank. Sustainability, as it defines, is founded upon three tenets - environmental; economic; social and community.
LIM Shrimp Organization (LSO), a social enterprise consultant and developer for the aquaculture industry in the developing world, in fact models its business around these three tenets of sustainability. And yes, this organisation's ventures have moved beyond shrimp.
Penaeus monodon - hatching a new business idea
Originally property developers, with support from the Malaysian government at the end of the 1970s, the Lim family was engaged in a private joint venture to build Penaeus monodon (aka giant tiger prawn, black tiger shrimp, Asian tiger shrimp) hatcheries around Malaysia, including Johor, Port Dickson and Langkawi, with the help of Professor I Chiu Liao, 'The Father of Modern Aquaculture'. LIM Shrimp Organization (known formerly as Tiger Prawn Hatchery Sdn Bhd) was thus formed.
Djames Lim, current chief executive officer of LSO, began his first stint in Malaysian shrimp farming in the mid 80's after graduating from the University of Miami, Florida. Starting as a junior hatchery technician, he worked his way up to become the technical and marketing manager of Tiger Prawn Hatchery Sdn Bhd, which was known to be the largest monodon hatchery in the world during the 80's.However, for Lim, this was only the end of the beginning of his illustrious career in aquaculture. In 1987, the Lim family was approached by the Indonesian government to develop a shrimp farm in the province of Lampung on the southern tip of Sumatra. The objective of the government was to solve the transmigration problem from Java by providing the migrants a livelihood. Employing a farming system which Lim referred to as 'Aqua FELDA', the government was trying to emulate the FELDA scheme in Malaysia, where the rural poor were resettled into newly developed areas.
The project fulfilled the three tenets of sustainability of the World Bank, and the Indonesian government succeeded in getting a US$2 billion loan through Bank Indonesia. The loan allowed a fully integrated shrimp farm to be completed, which boasted its own power plant, telecommunications system, schools, hospitals, town halls, feed mills, processing plants, cold storage, port, customs office, and security forces. By the 90's, the Lampung shrimp farm had grew to become the world's largest aquaculture township, occupying a massive 110,000 hectares (nearly twice the size of Singapore), and employing and providing livelihoods to more than 300,000 Indonesians. The farm exported to destinations worldwide including North America, Europe, Japan and Australia.
Lampung shrimp farm
In terms of environmental sustainability, the world's largest aquaculture township also featured environmental best practices such as the use of fishes and oysters which consumed the excess nutrients in the water. A 150-metre greenbelt of mangroves (the site of the Lampung shrimp farm was originally a swamp) along the entire shoreline of more than 100 kilometres was also maintained, and the sludge at the bottom of the ponds were re-purposed as fertiliser.
Then in the mid 90's, Lim's father met Professor Chen Siu Nan of National Taiwan Ocean University and National Pingtung University of Science and Technology. Through his father's contact, Lim became Prof Chen's understudy for Litopenaeus vannamei (aka Pacific white shrimp, whiteleg shrimp) culture research. This led Lim to Hawaii in 1999 to source for vannamei broodstocks for introducing them to LSO's Lampung shrimp farm.
Small is the new big - for how long?
Lim then returned to join as Procurement General Manager, Special Project Director, and International Marketing Director of the Lampung shrimp farm. The huge commercial success of the farm when vannamei was introduced was far from coincidental. Prof I Chiu Liao once discussed in a report the superior aquaculture traits of the smaller-sized vannamei in comparison to the large monodon. These include higher availability of genetically selected viral-pathogen-free domesticated broodstock, higher larval survival, faster growth rate, better tolerance to high stocking density, lower dietary protein requirement and more efficient utilisation of plant proteins in formulated diets (hence lower feed costs), stronger adaptability to low salinity, better tolerance to ammonia and nitrate toxicity, and lower susceptibility to viral pathogens infecting monodon.
Globally, production volume of vannamei overtook monodon between 2003-04, according to FAO statistics. Vannamei production continues to grow at the expense of monodon. "The global market is now more acceptable towards smaller shrimp sizes, led by the increasing demand from China," Lim explains. However, not all markets share a similar preference for small shrimp. "A shortage of bigger sizes is seen in Japan, therefore I also see a comeback of monodon. In my opinion, no matter which species is grown, there are definitely takers," adds Lim.
World aquaculture production of shrimp, 1991-2013
Regardless of the future growth of vannamei or monodon, both species remained threatened by Early Mortality Syndrome (EMS), a bacterial disease which has adversely impacted shrimp producers in China and Southeast Asia in recent years. While a panacea for the disease remains elusive, for those countries which lack the experience in dealing with EMS outbreaks, LSO's solution is to have a buffer zone of at least 30 kilometres between each farm. In fact, this is the first criteria for their projects to start. That said, in developing countries where land competition in coastal areas is stiff, this criteria is not easy to meet, Lim admits.
From aquaculture to aquapolis - exporting the LSO model worldwide
The success of the LSO model for sustainable aquaculture in Indonesia naturally attracted the attention of governments and companies in other developing countries worldwide.
In 2006, LSO was engaged by Vitarich Corp. of the Philippines as a consultant for restructuring their contract aquaculture business and the operation of their feed mills. Their cooperation involved the farming of vannamei shrimp, catfish, tilapia, and milkfish, and saw Vitarich at that time, regain their position as one of the top producers of aqua feed in the Philippines.
Lim believes that the development of the aqua feed sector in developing countries cannot be separated from the holistic development of aquaculture in those countries. "Developing countries need feed mills to support the smaller farms. Therefore many of them provide subsidies, including tax free status and zero import tax for raw materials, to feed mills to encourage their support. In fact, it is very important to have the following three supporting industries - feed mills, hatcheries, processing plants and cold storages - operating in tandem with one another. And that is why every single development in our organisation will involve all three, be they vertically integrated or on a contract basis."
"In Indonesia we practise vertical integration. In Vietnam we produce our own feed and supply to contract farmers. In Taiwan we produce and sell to individual farmers and provide technical support. As for China we produce our own feeds via OEM vendor for internal use. For upcoming projects we will likewise have our own feed mills."
More recently this year, similar to the Lampung Dipasena aquaculture township concept, LSO together with Omani partners began construction of a US$120 million integrated aquaculture township in Qurun, Oman, dubbed Qurun Aquapolis. As a result of the (Phase 1) 700-hectare project, joint venture company Arabian Marine Development Llc was established by the original owner of Arabian Marine Developments, Bank Sohar of Oman (under the support of the Oman Development Fund), and LSO. The aquapolis expects to produce annually about 4,000 tonnes of Fenneropenaeus indicus shrimp (aka Indian prawn) and 2,000 tonnes of a native species of sea cucumber, which will be processed and exported to the Gulf States, the European Union and Japan.
When asked why LSO decided to produce the native Fenneropenaeus indicus instead of the more commercially popular vannamei or monodon, Lim explained that they wanted to avoid unnecessary cannibalism and breaches in biosecurity often associated with the introduction of foreign species. Again, Lim's experience offers us further insight into sustainable aquaculture practices.
"For all new projects we will work with the local governments to help promote the local species and avoid importing any foreign species to keep diseases at bay. Although we are the first to introduce Specific Pathogen Free (SPF) and Specific Pathogen Resistant (SPR) vannamei broodstocks to China, the Philippines and Indonesia, we cannot control others who don't import such broodstocks and thus breach the biosecurity rules," Lim further explains.
Separately, with the current issues of antibiotic use in animal feeds, LSO states that it has never used antibiotics in any of their farms since the 80's, using instead probiotics and enzymes all along.
Most recently, a sense of coming full circle probably came to Lim when Chew's Group, a chicken egg processor from Singapore (and a most unlikely partner) wanted to produce freshwater fish in Singapore and a friend recommended them to Lim. "We managed to convince Chew that the bigger potential is in China and not Singapore. We set up a joint venture in 2013 and we have just completed a show unit for a high-tech vertical farm for sea cucumber in Haikou, Hainan. Our project will ultimately have 3000 units, and its production volume will be a thousand times greater than normal farms."
Vertical farm in Haikou, Hainan
Growing of Liaoning sea cucumber
Controlled vertical farming of sea cucumber in recirculation aquaculture system (RAS)
China - a market worth separate mention
LSO's foray into 'vertical farming' comes at a pivotal point when the Chinese government is beginning to understand that agriculture, including aquaculture, is extremely important to China's economy. According to the Central Government's 12th five-year plan (2011-15), China is cutting excess and outdated production bases and clusters while it aims to become a major exporter of aquaculture products. At the same time, local governments are funding production bases for increased efficiency.
As China targets the modernisation of the aquaculture industry for profitability, it will also be further promoting eco-friendly aquaculture developments, a direction which LSO is currently heading towards in the Chinese market.
"Finding coastal land is much easier now, but the project needs to be high-tech in order for us to secure a long-term lease. The Chinese government is phasing out farms with low productivity and replacing them with high productivity ones like ours. The greatest challenge for aquaculture in China now is tackling pollution and cross-contamination. As aquaculture becomes increasingly lucrative, farms are built closer to each other, leading to the rampant spread of diseases," Lim says.
Apart from LSO's joint venture with Chew's Group in Hainan, the organisation is also collaborating with companies supported by the Norwegian government to build and operate cod and salmon farms in China (and Southeast Asia), together with a consortium of companies. The companies include AquaOptima from Norway. The company is a supplier of recirculation aquaculture systems (RAS) and has designed and supplied hatcheries and grow-out land-based farms worldwide for a variety of cold and warm water species. RAS systems operate by filtering water from the fish tanks so it can be reused within the tank. This dramatically reduces the amount of water and space required to intensively produce fish, a technological development China's aquaculture industry is keen to pursue. The company also has special experience in the farming of Atlantic Cod and Salmon.
Further, in terms of research and expert knowledge, the cod and salmon project has the backing of SINTEF, University of Bergen, and many other industry experts from Norway, according to Lim.
Diverging a bit, the cod and salmon project naturally raises the question of the increasing Chinese demand for Western fishes. "Salmon has been widely accepted because of its widely known name. Cod is a rich-man fish, which most parents would save to buy for their kids. China is the same and cod and salmon have been selling very well in China. Demand has seen a double-digit growth yearly," Lim explains.
Other than the above projects in China, LSO also maintains current joint ventures in Wanning, Hainan; Xiamen and Jiangsu. As a note, the Chinese government has local five-year plans for aquaculture development in all three provinces.
Moving forward, back at his home in Singapore, the Singapore government recently sought Lim's advice on the feasibility of high-tech salmon farming on the island, as the country seeks higher self-sufficiency in food supply. LSO is working closely with the Economic Development Board, International Enterprise Singapore, Agri-Food and Veterinary Authority of Singapore (AVA), National Environment Agency and NTUC FairPrice on this project. AVA is currently in the process of land allocation.
All rights reserved. No part of the report may be reproduced without permission from eFeedLink.
