Fishmeal shortages spark more mergers

SHORTAGES of fishmeal for the fifth year running have led to a spate of mergers and acquisitions as companies, including Cargill, seek to meet demand for seafood, Bloomberg Business reported last month.

Cargill acquired fish feed giant EWOS six months ago and more recently invested in feed maker Calysta. It will keep expanding in aquaculture as world demand for food protein is seen growing 70 per cent by 2050, Neil Wendover, a global marketing director at its animal nutrition unit, told Bloomberg.

US based Cargill, along with Dutch investment group Aqua-Spark and others, have provided $30 million in funds to Calysta. World output of fishmeal, usually made from anchovies, fell short of consumption in nine of the past 10 seasons and a fifth straight annual shortage is expected in this marketing year, the US Department of Agriculture said.

Apart from Cargill, the industry has also seen the $4 billion takeover of salmon feed supplier Nutreco by SHV Holdings and Mitsubishi Corp’s acquisition of salmon farmer Cermaq.

With fishmeal production unlikely to meet demand, companies are looking for alternatives, said Mike Velings, of Aqua-Spark, the fund investing in aquaculture.

‘In the next five years, there is actually going to be a structural shortage in the market for fishmeal, so everyone sees a market opportunity in the short term.’

Calysta should bring its first commercial scale factory online in 2018, he said, adding that it would probably be in the US.

The company recently appointed a vice-president, Douglas Sheldon, to report to president Alan Shaw.

Halibut farming: P44