Closing the fish farming loop

Lloyd Moskalik, Managing Director of OceanEthix Photo: Alex Frew McMillan

A Hong Kong company aims to become the first to farm reef fish in a way that is sustainable as well as commercially viable

Alex Frew McMillan

Lloyd Moskalik, Managing Director of OceanEthix Photo: Alex Frew McMillan

On the 14th floor of an old godown, or warehouse, in Chai Wan, a shabby industrial neighbourhood of Hong Kong, dozens of fish swim slowly around a 7,000-litre tank under ultraviolet lights. Periodically, a feeder arm drops a few pellets into the water and the fish, a spotted yellow-brown species called mouse grouper, cluster underneath the chute, gulping the food down.

It’s a bizarre setting in which to raise fish more usually found on coral reefs – indoors and high up in a building otherwise occupied by trading firms exporting plastic products and electrical appliances. But the company breeding the fish, Marine Culture Technology, hopes its technique can help sate Asia’s growing hunger for live reef fish.

The emphasis on food being as fresh as possible, especially in Greater China, has led to soaring demand for seafood kept alive until the moment it is selected from the restaurant’s, or market’s tanks. Supplying that demand is pushing many species ever closer to extinction and the problem is worsening as more of the population are able to afford to be picky about their food all the time.

Overfishing now threatens to wipe out wild stocks of popular species such as the mouse grouper and its bright red counterpart, the coral trout or coral grouper. Hong Kong’s fisheries are now essentially destroyed, and the city’s fish come from further and further afield in the Coral Triangle around the Philippines, Malaysia and Indonesia, the richest area for sea life in the world.

Photo: CP/Lotus

There aren’t hard numbers on the exact size of the trade, since imports of live fish into Hong Kong and China aren’t currently tracked by customs. But Marine Culture Technology estimate around 40,000 tons of fish, worth US$810 million, flow into Hong Kong, Macau and China each year.

“It’s a massive problem,” Geoffrey Muldoon, the Live Reef Fish Trade Strategy Leader for the World Wildlife Fund, explains. “Basically there is overfishing of target stocks in the Coral Triangle, and it has been going on for two or three decades, and primarily for export to Hong Kong and increasingly China, as China becomes wealthier.”

The current trade is very wasteful. First, the fish are captured off the reefs, removing vital breeding stock. Many fish caught now are juveniles that never get the chance to reproduce. Then they are shipped by air or by sea into Hong Kong. They are generally sedated with drugs to prevent them becoming overexcited, and left unfed to prevent them producing waste, the ammonia in which makes the fish taste bad. A lot of fish die en route.

“A lot of them get pretty bashed about, and there is a high turnover rate,” says Yvonne Sadovy, a professor of marine biology at Hong Kong University and an expert on fisheries worldwide. “They arrive here in not such a great state.”

Nic Hopkins, a lawyer and one of the 50 angel investors backing Marine Culture Technology goes further: “The live reef fish trade would have to be the most corrupt, fragmented, disorganized trade out there,” he laments.

In recent years, fish farming has grown hugely worldwide, notably in the cultivation of salmon. It could be at least part of the solution to the trade in reef fish too but certain problems remain to be addressed.

Marine Culture Technology’s approach attempts to create a completely waste-free, sustainable system and was first developed for freshwater fish cultivation in the late 1980s by an Australian fisherman. It has taken them years to work out how to adjust his technique to work with saltwater fish.

Marketing their fish under the green-friendly brand name of OceanEthix, the company now grows out the small fish in its tanks to restaurant size. Since the fish are bulked up near their end market, the carbon footprint for shipping is lower. Many fewer fish die en route, and they’re less stressed when they arrive.

Equally importantly, the company has also worked out how to use oysters to continually filter the water and remove the fish waste which often causes problems in fish-farming, meaning that their system, which uses artificially produced seawater, is close to being a closed loop.

Environmentalists say challenges remain. “I’m encouraged by the technology,” says Markus Shaw, former president of the WWF’s Hong Kong arm. “It looks good. But there are a few questions circulating about it.”

Shaw is bothered about where the company sources the tiny fish that it grows out. “If they come from the wild, you’re removing all those fry from the food chain, and it can have a big effect,” Shaw says.

“The ideal situation would be to have adults that you are breeding in captivity – the brood stock – produce the eggs and the larvae, and raise them through the full cycle, what we call full-lifecycle mariculture,” Sadovy says. “That way you’re not impacting fish in the wild.”
OceanEthix admits it is not there yet. It buys wild fingerlings of species such as the coral trout which haven’t been raised in captivity yet, getting what it estimates is around 60% of its supply unsustainably, direct from the ocean, and 40% from its farmed fish. It also continues to buy larger reef-caught specimens saying it is impossible to farm large ‘banquet-size’ grouper of 2-3kg because they take years to grow.

The other major concern that Shaw raised is what OceantEthix feeds its fish. “They are growing carnivorous fish, so where does the feed come from?” Shaw asks.

According to the documentary “The End of the Line”, 40% of the fish caught worldwide are made into fish meal to feed carnivorous farmed fish. It takes 5kg of anchovies to raise 1kg of salmon. The problem doesn’t exist with plant-eating species of course, but almost all of the more popular food species eat other fish. At the current rate, wild fish stocks of all kinds could crash as soon as 2050.
“There is a real debate at the moment that aquaculture is not the solution because the feed is trash fish,” Moskalik concedes. “You still have to go to the reefs and the oceans to catch a lot of trash fish to feed the fish.”

OceanEthix mitigates the problem by using processed pellets that are around 20% fish. It takes around 1.1kg of pellets to produce a weight gain of 1kg in the fish, the company says, with most of the feed being grain or soybeans. A producer in Denmark is developing a 100% sustainable feed.

“We see that on the horizon,” Moskalik says. “It’s not that far away there will be a feed that is 100% free of all trash fish or any fish meal.”

The company currently only has two tanks in Hong Kong, where it has been fine-tuning the system. Each can hold around 1,000 fish at capacity, and the company says it has a market for all the fish it can raise. “To sell the product is not a problem,” Lloyd Moskalik, the company’s Australian-born Managing Director, says. “It’s not a case that the demand’s not there, it’s a question of just gearing up.”
The company plans to rent space for 10 tanks in suburban Sha Tin. When that operation is running in the second half of this year, OceanEthix should be able to boost sales around tenfold, from around US$10,000 per week. “We’re looking to get up to around US$100,000, and we can’t do that until we expand – we are running at a maximum,” Moskalik says.

At first they plan to sell mouse grouper, also known as slope-head grouper, because it fetches the highest price, as high as US$100 per kilogram. They would then add coral trout, another highly prized and highly priced species, and then fast-growing grouper such as the green  and giant groupers that  command lower prices.

OceanEthix is already stocking restaurants in Hong Kong on a trial basis but they first have to overcome some resistance to farmed fish as opposed to world-caught fish.

“We’re finding it slow for local restaurants and hotel groups to transition from one to the other,” Moskalik says. “Their main concern has got nothing to do with sustainability. They have got a problem about the image of farmed fish, that it does not taste as good as wild-caught fish.”

Yokukawa, a sushi restaurant in Tsim Sha Tsui, has been selling OceanEthix fish and believes there’s no difference. “If the fish is raised properly it’s going to taste just as good as ocean fish,” a spokesman insists.

There seems to be less of that attitude across the border. This year OceanEthix began a pilot scheme to supply fish to the grocery-store chain CP/Lotus, a Thai-owned company that runs 75 supermarkets in Mainland China, to sell in their flagship store in Shanghai. The store is just off the Bund, in Pudong’s upmarket Lujiazui neighborhood.

It is too early to tell whether the trial is a success – the program began on January 25, when Lotus opened the store. “Most days the buyers will be foreigners or very good income families,” Effie Xiang, the general manager of corporate communications for Lotus, says. “The price of the product is still high for most customers.”

But Lotus hopes to sell the fish in other stores. “We would like more people to try it,” Xiang says. There’s the environmental benefit, and some cachet, too. “It is a premium product and not every store can have this kind of seafood.”

OceanEthix is now setting up a holding tank in Shanghai where it can bulk up the fish closer to market. Moskalik hopes the chain will agree to carry its fish in Beijing, Guangzhou and Shenzhen. It would even able to breed fish in cities like Chongqing that are miles inland.

Tapping a market of 1.3 billion mouths could help the company create a truly sustainable system for raising and selling live fish. “There have been successful programs but nothing at a commercial scale as yet,” Moskalik said. “We are bringing it all together.”