By Greg Lutz
The early days
From 1988 through 1991, an indoor recirculating aquaculture facility in Martinsville, Virginia (USA) known as Blue Ridge Fisheries produced and processed catfish. This pioneering business was not successful in overcoming flaws in the design of the recirculating systems, nor in the particularities of channel catfish, and eventually ceased operations.
Nonetheless, several key personnel at Blue Ridge had not given up on the concept of an industrial scale indoor fish farm. Blue Ridge Aquaculture, Inc. was founded in 1993 with plans to produce tilapia, using the existing facility. Many of the same investors from Blue Ridge Fisheries participated in its formation, and a newer, stronger company emerged with redesigned equipment and processes tailored to the new production species. After modifying the 100,000 square foot facility, Blue Ridge Aquaculture began producing tilapia in 1993.
As has been the case in many, if not most, recirculating production facilities, in the following years Blue Ridge experienced a series of disease problems that threatened to shut down operations. However, in contrast to the typical experience of indoor fish farming ventures, after implementing a strict bio-secure program and operating with a culture of disease prevention, the company has been able to operate disease-free for the past 14 years.
By 2002, Blue Ridge Aquaculture was operating as a fully integrated system, including broodstock selection and maintenance, hatchery/ nursery operations, growout and distribution of live tilapia. At the time it was producing around two million pounds (907 tons) ot filapia per year. Over the next 5 years the company focused on improving its profit margins, concentrating on consistent quality, ensuring reliability of supply and establishing a stable market share. By 2007 the company had doubled production, and revenues.
Blue Ridge employs approximately 30 people and is currently the world’s largest producer of tilapia using indoor recirculating aquaculture systems (RAS). To date, the company has been in continuous operation for nearly twenty years and in that time it has produced over 22,000 metric tons of tilapia (whole fish equivalents). Annual production is roughly 4 million pounds (1,814 tons) of tilapia, with between 10,000-20,000 pounds (4.5-9 tons) of live fish harvested every day. The company prides itself on the fact that all its fish are raised without the use of antibiotics or hormones, and are free of mercury (undetectable levels from independent studies) and other industrial pollutants. Performance measures, including growth rates, production densities, Feed Conversion Ratios, and survival are all impressive by any measure. They understand the negative effects of stress on the animals and strive to maintain ideal environmental conditions for optimal and efficient growth.
The company focuses on the sale of live fish to distributors in major metropolitan markets in the North-East such as New York, Boston, Toronto and Washington, D.C. Traditional consumers are primarily Asian and Hispanic-American individuals with a cultural preference for live seafood. Blue Ridge’s management team estimates that BRA currently controls approximately 20% of the domestic market for live tilapia. To adequately service these markets, and assure more control within the value chain, transportation logistics are critical to the company’s operations. A wholly owned subsidiary company dedicated to the distribution of live product was formed, known as Rolling River Live Haul. This subsidiary allows delivery of an uninterrupted supply of live tilapia daily to live fish distributors in major metropolitan markets on the East Coast and Canada. Rolling River Live Haul makes it possible for Blue Ridge to have total control of its marketing chain.
The driving force behind Blue Ridge, since its inception and in all aspects, is William R. Martin, Jr. – known to friends and foes alike simply as “Bill.” He is currently the company’s President and CEO. His longstanding successful career in aquaculture, while overcoming medical problems and all the adversity associated with trying to establish an industry that few understood and even fewer put much stock in, can be attributed to perseverance. Or stubbornness, depending on your vernacular. Martin is a member of multiple US aquaculture organizations including the Board for the Center for Environment, Fisheries and Aquaculture Science (CEFAS), where he previously served as Co-Chair, and the National Aquaculture Association (NAA). He has served on the Board of Directors for the Southern Regional Aquaculture Association (SRAC) as well as Vice-Chair for the Virginia Marine Products Board. He is also Chairman of the Board, and a Founding Member of the US Aquaculture Coop.
The guy who makes everything work at Blue Ridge is Rocky Holley, a gentleman who has overseen the development and growth of Blue Ridge’s operations since the inception of the company. As a result, of course, he has extensive experience in facilities design, facilities management, construction, electrical systems and plumbing. His focus continues to be on improving operational efficiencies.
Key personnel also include professionals working with financial and operational management, reporting and business development, marketing, fish health, broodstock management, hatchery operations, growout operations and biosecurity. The company produces 15 million fry per year on site and subsequently grades and selects fingerlings up to a size of 30 g. New posts involve design and development of systems for recirculating production of shrimp, including management and operation of shrimp broodstock, hatchery, and algae production areas.
Blue Ridge views its workforce as an asset and an advantage, which is reflected in the benefits program it offers. As the company has become increasingly successful with predictable margins, it has been able to reward employees accordingly. The company has a strong health insurance program for qualified employees, a profit-sharing program and pay rates well above the regional average. Currently, employees hold over 50% ownership in the company, and that portion is expected to increase steadily in the coming years.
The company raises nearly four million pounds (1,815 tons) of tilapia each year at its 100,000 square foot facility in Martinsville, Virginia. An estimated 75,000 pounds (34 tons) of live tilapia are shipped from the facility to markets each week, and all of the company’s tilapia are bred, born, and grown in biosecure environments on site. Blue Ridge utilizes continuous selection for growth, coloration, shape and tolerance to stressors. Fish are uniformly silvery-white in color, very fast growing, round-bodied and highly domesticated. In fact, the fish are so tolerant of human activities that many fish will let you lift them gently by hand until they are completely out of the water.
Virginia Shrimp Farms is an integral component of the company’s strategy for the future. As shrimp is the top seafood species consumed in the U.S., in Bill Martin’s world view it represents the largest potential market for expanding high-value recirculating aquaculture. Virginia Shrimp Farms hopes to capitalize on the many issues affecting the current supply to consumers throughout the country. Since it is accessible to major metropolitan areas in the Eastern U.S., distribution to major markets and independent growers should be fairly efficient, according to the business model. Blue Ridge is committed to the success of Virginia Shrimp Farms, and has designated this project as a major priority in terms of R&D resources. The 30,000 square foot facility was completed in 2007, and includes state of the art equipment and infrastructure necessary to develop production technologies for various species. It includes dedicated space for growout systems, a hatchery and nursery room, broodstock tanks and laboratories. Growout systems include nine independent recirculating systems, each with three separate tanks and filtration, allowing for testing of multiple variables. Nursery and hatchery rooms contain equipment for live feed production, including an algae culture room, live feed tanks, and distribution systems. The broodstock rooms include a separate filtration system, and low light levels with photo-manipulation capabilities. Laboratories are also housed on site to facilitate chemical analysis and water monitoring.
Since it was designed as a multi-purpose facility for research the Virginia Shrimp Farms facility is not optimized for commercial production of shrimp or other aquatic food species. The operational goal is to address hurdles for inland shrimp hatchery development and to focus on domesticating lines of shrimp that will tolerate and adapt to recirculating culture conditions. In this way, Martin and his team hope to lay the groundwork for something entirely new.
Eventually, Martin is interested in fostering the development of an inland shrimp industry that will look something like poultry production – with hatchery operations providing post-larvae and technical support to independent growers. A major difference in his vision, however, is that the growers themselves will control their marketing options. Martin does not believe Blue Ridge or Virginia Shrimp Farms will be alone in this pursuit – in fact he is hoping there will be a number of other players supplying post-larvae. He states repeatedly that the goal of the R&D work going on at Blue Ridge is to build an industry – with multiple players on multiple levels, not to mention the support industries that will develop to serve an inland shrimp sector.
Blue Ridge is also looking to incorporate aquaponics in the future in efforts to further reduce waste streams. The company is currently growing basil, peppers, tomatoes, and different types of lettuces (butterhead, red leaf, romaine and lollo) in a closed loop RAS system, adding only feed for the tilapia. The goals of this research project are to reduce the amount of tilapia effluent normally discharged to the sewer system, creating secondary saleable organic vegetable and herb products, and achieving higher overall water quality for the tilapia grown in recirculating systems.
Apart from the long-range goals Martin and his team are pursuing through Virginia Shrimp Farms, further growth of tilapia operations in the near future is a very real possibility. Economically, the company has generated attractive returns for its owners and employees, and believes these returns will continue. The company plans to accomplish this goal by 1) sequentially expanding its tilapia production capacity to 10 million pounds (4,536 tons), then to 100 million pounds (45,360 tons), 2) developing a fresh fillet product which will provide access to larger markets, and 3) developing the production of other species in similar systems.
Clearly, not all of this production will be located in Virginia. Plans involve facilities on both sides of the country and in between as well. Blue Ridge Aquaculture has been producing tilapia in RAS systems for nearly two decades, and has proven that large-scale RAS is a viable production method. In spite of failures early on, the numbers don’t lie. Improvements in cost and performance of new systems will be based on improved components, and new facilities can be located close to markets, and away from expensive and ecologically sensitive coastal areas. Cost reductions, however, cannot simply come from ever-increasing cumulative production. And, although the classic “learning curve” theory of increasing productivity and efficiency on the factory floor might account for part of Blue Ridge’s success in Virginia, industry growth will require incorporation of improved processes (such as RAS components and their combination) and improved product (based on continuing genetic improvement of stocks to be used in RAS). Innovations will be required in both these areas of focus.
The company foresees a number of marketing advantages that will partially offset the competitive environment they will face as tilapia operations expand. Blue Ridge’s facilities do not use hormones or antibiotics of any kind. All of their fish will be domestically produced, with highly traceable raw materials, and free of mercury, pollutants and carcinogens. Maximizing water utilization and minimizing environmental impacts will also allow the company to reach out to environmentally-conscious consumers.
While all the above factors will impact future operations, the story of Blue Ridge involves much more than the simple evolution of technologies, production stocks and markets. Rather, key factors over the years appear to have been perseverance, dedication, teamwork and some degree of luck. The company continues to serve as one of very few success stories in recirculating aquaculture production in the U.S. over the past several decades.
C. Greg Lutz, has a PhD in Wildlife and Fisheries Science from the Louisiana State University. His interests include recirculating system technology and population dynamics, quantitative genetics and multivariate analyses and the use of web based technology for result-demonstration methods.