There are just eight aquaculture companies listed on the ASX. This article will give you an overview of all eight of these companies. If you are looking for ASX listed agriculture stocks more broadly click here and if you are looking for ASX listed food stocks, then click here [coming soon].
As you can see in the pie graph below, the ASX listed aquaculture space is dominated by Tassal Group, who accounts for 45% of the market capitalisation of all aquaculture companies. Coming in behind Tassal is Huon Aquaculture Group and NZK Salmon Limited, with 20% and 18% of the total capitalisation of the ASX aquaculture market respectively. Making up the rest of the capitalisation of aquaculture companies are Seafarms Group, Clean Seas, Murray Cod Australia, Ocean Grown Abalone and Angel Seafood.
The Australian aquaculture industry is dominated by Tassal and Huon Aquaculture (NZK Salmon is excluded as it is located in New Zealand). As you can see in the pie graph below, the only private aquaculture company of decent size is Petuna Aquaculture in Tasmania. To put Petuna Aquaculture’s size in perspective, they are approximately 1.5 to 2 times larger than Clean Seas. The rest of the industry consists of smaller operations which are often family owned. According to IBISWorld, over 35% of aquaculture enterprises in Australia earn less than $50,000 annually.
Here is the list of all aquaculture companies on the ASX:
|Company||Approximate Market Capitalisation|
|Tassal Group Limited (ASX: TGR)||$885,000,000|
|Huon Aquaculture Group (ASX: HUO)||$394,000,000|
|NZK Salmon Limited Foreign Exempt NZX (ASX: NZK)||$350,000,000|
|Seafarms Group Limited (ASX: SFG)||$150,000,000|
|Clean Seas Limited (ASX: CSS)||$80,500,000|
|Murray Cod Australia Limited (ASX: MCA)||$73,400,000|
|Ocean Grown Abalone (ASX: OGA)||$26,200,000|
|Angel Seafood (ASX: AS1)||$15,400,000|
Tassal Group Limited (ASX: TGR)
Tassal Group was listed on the ASX in late 2003 after going into receivership. Tassal is the largest salmon grower in Australia and is the largest vertically integrated salmon and seafood processor in Australia.
Initially Tassal sold primarily to export markets. Then around 2010/2011 the company implemented a $200 million five year investment program aimed at improving and increasing their hatching, growing and processing infrastructure. This allowed Tassal to increase salmon production and focus on the domestic Australian market. This reduced their dependence on the export market, in which Tassal was a price taker rather than a price maker. Tassal has recently begun to export its salmon products again.
Tassal has recently implemented a diversification plan with its acquisitions of De Costi Seafoods in 2015 and Fortune Group in 2018.
Tassal acquired De Costi for $50 million and up to 10 million Tassal shares over three years. De Costi Seafoods is the largest independent seafood supplier in New South Wales and sources and processes seafood from Australia and overseas. Commenting on the acquisition, Managing Director and CEO Mark Ryan stated that:
“The proposed acquisition of De Costi Seafoods will further build on our domestic salmon
capabilities, increase Tassal’s vertical integration in salmon, drive increased scale and provide Tassal with access to the broader seafood market. This increased scale will drive further efficiencies and benefits to both Tassal’s salmon offering as well as seafood, and uniquely position Tassal for its next phase of growth.”
Tassal acquired Fortune Group in 2018 for $31.9 million. Fortune Group is a prawn grower who produces approximately 450 tonnes per annum. Tassal plans to increase this production to 3000 tonnes per annum through operational improvements. Commenting on the acquisition, Tassal Managing Director & CEO Mark Ryan said:
“The acquisition of the land, assets and inventory of Fortune Group is strategically compelling to Tassal. It allows us to expand our vertical integration from salmon to include prawns, and unlock further synergies in the seafood supply chain through a highly earnings accretive acquisition.”
“We currently process and sell prawns through De Costi Seafoods and we are conscious of the fact that our customers are demanding more prawns than we can currently supply. We estimate that for FY19 we will have around 700 tonnes of prawns for sale from the inventory acquired once fully grown out. Our focus is to grow over 3,000 harvest tonnes per annum in the next three to five years.”
“We are experienced in aquaculture with the success of our salmon farming operations, and in the seafood industry with the successful acquisition and integration of De Costi Seafoods. We are placing experienced people into our prawn business, and I am extremely pleased to
announce that we have been able to assemble what we consider to be a best practice lead team in prawn aquaculture in Australia. The team will be led by Ben Daley, our Head of Supply Chain and will consist of an on the ground team of Mark Porter, Head of Aquaculture – Land Based [ex CEO at Petuna Seafoods], David Wood, Senior Manager – Commercial Performance [ex CEO and CFO of Petuna Seafoods], John Maloney, Senior Manager – Prawn Operations [ex Pacific Reef Fisheries], Nick Moore, Technical Specialist [ex Gold Coast Marine Aquaculture] and Courtney Remilton, Prawn & Hatchery Performance Manager [ex Seafarms Group].”
“We are confident of our ability to deliver on the potential we see for prawns. The assets we have acquired are substantial and geographically diversified, the industry dynamics are
attractive with demand for Tiger Prawns in Australia outstripping supply, and we have a highly experienced team on the ground.”
Huon Aquaculture Group Limited (ASX: HUO)
Huon Aquaculture was first admitted to the ASX in October 2014. The company was founded in 1994 as an extension of a family agriculture business. Huon is majority owned by Surveyors Investments Pty Ltd, a company controlled by Huon Aquaculture CEO Peter Bender.
Huon Aquaculture is Australia’s second largest vertically integrated salmon producer and the largest family-owned salmon producer. The company has recently been investing in expanding its production.
Like Tassal, Huon Aquaculture owns its own hatcheries, marine farms and processing operations which are located throughout Tasmania.
Throughout 2018 Huon conducted trials in Queensland and Western Australia to assess the commercial viability of Yellowtail Kingfish farming. The company now plans to set up farms on the east and west coasts of Australia. The Yellowtail Kingfish Trial’s are part of Huon’s strategy to diversify into other high value fish species.
New Zealand King (NZK) Salmon Limited Foreign Exempt NZX (ASX: NZK)
New Zealand King Salmon is a producer of King Salmon. King Salmon is a premium salmon species of which New Zealand King Salmon is the largest producer. The company operates seven farms. NZK Salmon sells its salmon under the Ōra King, Regal, Southern Ocean, Omega Plus and New Zealand King Salmon brands. NZK Salmon is 40% owned by Oregon Group, an investment holding company of the Tiong family of Malaysia. The company is dual listed on the ASX and NZX.
The company derives the majority of its revenue from exporting its salmon overseas, with 52% of revenue derived outside New Zealand.
Seafarms Group Limited (ASX: SFG)
Seafarms Group is the largest producer of farmed prawns in Australia, with current production capacity of 1800 tonnes. The company markets its prawns under the Crystal Bay Prawns brand. Seafarms Group owns prawn farms throughout Queensland which have been in operation since 1988. The farms produce banana and black tiger prawns. Additionally, the farms are also used to conduct R&D activities for the company’s Flag Ship Project: Project Sea Dragon.
Project Sea Dragon
Project Sea Dragon is the company’s major development project located throughout the Northern Territory and Western Australia. The Grow-Out Facility where the prawn ponds will be, are located at Legune Station in the Northern Territory. The Project will consist of 10,000 hectares of ponds. Stage 1 of the Project involves the development of 1,120 hectares of ponds, with Step 1 of Stage 1 consisting of 400 hectares which is currently being developed. The Project has two major cornerstone partners: Nissui and Sealord.
Nissui is a large Japanese seafood company with a market capitalisation of $USD 1.7 billion. They have made a $25 million equity investment in Seafarms Group constituting 15% of Seafarms Group. Additionally, off-take agreements have been signed with Nissui equating to 15% of Queensland prawn production and 10%-20% of future Project Sea Dragon production. Nissui can increase its stake in the company up to a maximum of 25%.
Sealord provides exclusive sales and marketing services in Australia and New Zealand. Sealord is 50% owned by Nissui, has an extensive supply chain and exports to 40 countries around the world.
Clean Seas Limited (ASX: CSS)
Clean Seas is a producer of Yellowtail Kingfish at Port Lincoln in the Spencer Gulf, South Australia. Clean Seas was admitted to the ASX in late 2005. The company plans to expand its presence throughout the Spencer Gulf in Arno Bay, Wallaroo and Fitzgerald Bay, which will likely increase production.
The company used to be focused on Southern Bluefin Tuna but has instead decided to focus on Yellowtail Kingfish.
Clean Seas also owns a propriety process for freezing fish called Clean Seas Rapid Freezing. Clean Seas Rapid Freezing freezes fish 22 times faster than conventional methods. This improves the fishes texture, colour, aroma and flavour.
Murray Cod Australia Limited (ASX: MCA)
Murray Cod Australia produces pond grown Murray River Cod (Aquna Cod) in the Riverina region of New South Wales. The company was listed on the ASX in 2011. Commercial fishing of wild Murray River Cod is illegal so the only way for consumers to gain access to the fish is via farmed Murray River Cod, most of which is provided by Murray Cod Australia. Murray Cod is native to the Australian Murray Darling region and does not grow in any other region. Murray Cod is a premium product, often fetching wholesale prices of $23 – $25 per kg compared to $12 – $14 per kg for pink salmon.
Murray Cod Australia operates its business using a land based model of fish production. This is less capital intensive than ocean and lake based models.
Ocean Grown Abalone (ASX: OGA)
Ocean Grown Abalone is a abalone sea ranching business. The company has developed the world’s first commercial greenlip abalone sea ranching facility using their own artificial abalone reefs. These reefs are located on the company’s leases in Flinders Bay, Western Australia. The company plans to implement this technology in more lease areas to increase production. As stated by Ocean Grown Abalone:
“We place hatchery reared juvenile abalone on [our artifical abalone reefs] – then let nature (with a little help from our divers) do the rest to produce this marine delicacy. A totally natural, ‘wild-harvest’ product. Because we have some control of the process we can harvest to market demand to whatever size the market requires. We call this aquaculture technique sea ranching.
Ocean Grown Abalone was admitted to the ASX in November 2017. In HY1FY19 the harvest volumes were 28.7 tonnes, a 37% increase over H1FY18.
The company has a number of projects under development. These projects include the Wylie Bay Joint Venture Project, a new processing facility in Augusta, Western Australia, the Flinders 3 project which could result in an additional 5000 abitats, subject to successful trials, and the Esperance land based grow-out and hatchery facility.
Angel Seafood (ASX: AS1)
Angel Seafood is an oyster producer based in South Australia. Angel Seafood operates in Coffin Bay, Smoky Bay, Cowell and Haslam. The company sells its oysters domestically and internationally. Angel Seafood was admitted to the ASX in February 2018. The company plans to expand through consolidation of oyster operations in the region.
As you can see there are a broad range of aquaculture stocks available on the ASX for an investor to choose from. If you like aquaculture stocks, you might also like these food stocks [coming soon!] and agriculture stocks articles which I have written. If you liked this article don’t forget to subscribe!