Case of investor ignorance
IN the early 1990s Andre Bok left university as an aquaculture graduate and ran a touring company in Malawi, which was good experience in seeing how investment potential can be undermined by ‘deception lurking around the corner’. In 2008 he led a pilot scale land based dusky kob farm in East London. At the time there was great excitement in the emerging industry and investors initially were willing to lend enterprises like his money.
The fact that every single farm set up in this period failed cannot be
of information and the ventures produced on average just 25 per cent of what had been predicted.
His own operation, Pure Ocean East London (part of Pure Ocean Aquaculture), was no exception. It has endured many challenges, some tragic, such as when the CEO was shot and killed by his former business partner who then committed suicide.The company that bought them out was subsequently implicated in a Ponzi scheme.
Bok, a marine bioloigst, said investors generally had been easily fooled who have learnt from past mistakes and proven their business creden
He advised farming entrepreneurs that due diligence must be ‘very strong on the technical front – they must understand the farm’s true production potential’. He admitted that when he started out he ‘knew enough to know I didn’t know enough!’
Ideally, one or two technical consultancy teams should be hired by investors and only when the technical risks are understood should productivity milestones be agreed.
Farm production milestones such as feed conversion ratios and stocking densities are, said Bok, ‘the beating heart of a farm’.
Prior to investment a farm’s technical plan should be audited, including the farm production indicators.
And having invested, the farm should report on its production indicators and continue to be independently audited.
‘Over the last 10 years we’ve learnt a huge amount and now this is the strongest position ever to invest in the industry,’ said Bok.
As for his business today, he lost all his funding four years ago but managed to continue with growth trials and is now ready to commercialise his operation.
on planning’ and has made ‘internationally ground-breaking’ advances, but what he has farm has achieved technically.
Asked by Aqua-Spark investor Mike Velings how long he thought he could carry on from month to month’ and that it was a ‘blur and traumatic’. He had freed up his retirement he believed in what he was doing.
‘It’s a pioneering industry and we’re still learning a lot of things.’