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Florida, the Salmon State? It could happen soon

Atlantic Sapphire salmon farm under construction in South Miami-Dade

Animation given to the Miami Herald by Atlantic Sapphire shows what the company says their massive fish farm in south Miami-Dade county will eventually look like.
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Animation given to the Miami Herald by Atlantic Sapphire shows what the company says their massive fish farm in south Miami-Dade county will eventually look like.

What was once a sprawling tomato field near Homestead is being turned over in stages for a new crop: Atlantic salmon.

Yes, you read that right. Salmon, fresh from Florida, the land of palm trees and gators.

Turns out the cold-water, protein-rich fish are well-suited for an innovative approach to salmon farming in the tropics, and southern Florida offers the ideal geological structure for this endeavor in aquaculture: the world’s largest land-raised salmon farm.

“Up to now, what has been holding up salmon from growing and feeding the world is that it has been stuck at the ends of the Earth and has be to be flown around. We’re changing that,” said José Prado, chief financial officer of Atlantic Sapphire, the Norwegian company that is constructing a $130-million, 380,000-square-foot facility to hatch, grow and process salmon — all on land. “We call it world-class local.”

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An aerial view of the Atlantic Sapphire construction site, west looking east, near Homestead. When completed, it will sit on more land than AmericanAirlines Arena does. Atlantic Saphhire

That’s just the first phase, and construction that started a year ago is well underway along Southwest 272nd Street and 217th Avenue lined with farms and nurseries not far from the Homestead General Aviation Airport. On the first 20 acres, wells for fresh water and salt water and an injection well for treated wastewater have been drilled. The beginnings of what will be more than 60 miles of pipes are being laid, while more than a hundred trucks filled with crushed rock are arriving on the site daily for construction of the facility that will house a freshwater salmon hatchery, 36 massive recirculating saltwater grow-out tanks chilled to about 59 degrees, administrative offices and a processing unit that will prepare the salmon fillets for market.

It doesn’t look like much now, just a massive construction zone, but the first salmon eggs are set to go into the freshwater hatchery in November, while construction is completed for the massive recirculating saltwater tank area, where salmon — one of the few species that migrates from fresh water to salt water — will be grown to about 10 pounds. It’s a process that takes about 22 months from the egg stage, and the company said no hormones, antibiotics or pesticides will be used.

Once the project’s 380,000-square-foot facility is complete in 2019, phase 2 will begin on the second 20 acres purchased in 2016. Atlantic Sapphire has an option to buy the contiguous 40 acres — on which papayas are now grown — that’s planned for phase 3.

For all three phases, estimated to come online by 2027, Atlantic Sapphire is predicting an annual output of about 90,000 metric tons, about 10 percent of the U.S. market. Put another way: That’s about 360 million meals produced every year.

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A photo from the company’s Denmark facility. Atlantic Sapphire

As wild salmon has become overfished, salmon farming has been growing to meet the demand accelerated by world population gains and healthier eating trends in the U.S. But 100 percent land-raised salmon is a relatively new innovation and hasn’t been done at this scale. Typically, farm-raised salmon are hatched in hatcheries on land, and the tiny fish are then transported to large net-pens in the chilly ocean off Norway, Chile or the North Atlantic. Then the full-size fish are transported back to land for processing and then flown to customers around the world.

That’s a lot of transportation piling onto the carbon footprint, and the net-farms also have their own challenges.

In the ocean nets, these fish are magnets for sea lice, which can leave them more susceptible to diseases, and they escape. In Washington state last year, 160,000 non-native salmon escaped into Puget Sound, presenting an environmental hazard to wild stocks. Microplastics in the ocean will also have an impact on the food supply, another reason land-raised farming is more sustainable.

Atlantic Sapphire’s “Bluehouse” aquaculture technology addresses all of this, the company said.

“What Atlantic Sapphire represents is the next level of sustainability,” said Atlantic Sapphire CEO and serial salmon entrepreneur Johan Andreassen, during an interview and tour at the Homestead site in late February. “We have zero impact on fish, zero impact on the ocean; we are cutting the carbon footprints, and the end result is that the consumer can buy a product that is very healthy for the consumer and appealing because it doesn’t harm the environment.”

Four years ago, the massive U.S. facility was just an idea. Andreassen and his team began scouting locations, starting in Maine. But the water structure wasn’t optimal, nor was it right along Long Island Sound or Chesapeake Bay. So the team made its way south.

Turns out the aquifer structure of southern Florida is believed to be the only area in the U.S. suitable to do this type of aquaculture farm at this scale, Andreassen said. That’s because the structure of the geology allows for ample fresh water and salt water and the separate safe disposal of treated wastewater via a 2,750-foot-deep injection well, he said.

“This was the last place I looked at because I was thinking South Florida, like the tropics, for a cold-water fish? It is pretty crazy,” he said.

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CEO and founder Johan Andreassen (left) and CFO José Prado, who heads up the Miami operation pose for a photo standing near pipes that are currently being installed at the site of the "Blue House" in South Miami-Dade County. Atlantic Sapphire, the world leader in land-raised salmon farming, is building a massive construction project. This is a salmon farm in the works like no other in Florida. Jose A. Iglesias jiglesias@elnuevoherald.com

But this crazy entrepreneur is a lifelong innovator in the salmon industry.

Andreassen has been an entrepreneur since he was a teenager. Before founding Atlantic Sapphire, he and his co-founder pioneered the use of cleaner fish in Norway in the 1990s as a natural way of fighting sea lice in net-pen salmon farming.

They launched an organic salmon farming company, Villa Organic, in Norway, the world’s largest salmon producer, and soon after secured a coveted contract from Whole Foods. They took Villa Organic public in 2007 and later sold it to the second- and third-largest industry players in salmon in Norway; today it is a billion-dollar company. That has allowed Andreassen to do it all again.

But Villa Organic was salmon-farming in the Arctic circle with the net technology. Now Andreassen is farming in Miami completely on land: “This will put an end to flying salmon around the world.”

Added Prado: “We will go from egg to harvest under one roof, and we will be to Colorado or New York in a couple of hours, fresh from Florida.”

Andreassen also has field-tested the technology the past seven years.

In Denmark, known for its water and filtration technology prowess, Atlantic Sapphire built a recirculating aquaculture facility to produce 1,000 tons annually and has farmed 25 batches of salmon to date.

“Each time, you learn something new,” Prado said.

The company is expanding it so it can produce about 3,000 tons, but that pales compared with the 90,000-ton project planned for South Dade.

Yet that Danish facility, the company’s innovation center launched in 2011, is already supplying some top restaurants, and the company has won awards for fish size and flavor. It has also received the highest rating — “Best Choice” — from the Monterey Bay Aquarium Seafood Watch.

“To produce the fish at 4 to 5 kilograms, 10-12 pounders, with perfect flavor — we are the world champions. Everyone is trying to achieve that,” Prado said.

For Atlantic Sapphire’s scale-up phase, all eyes are on South Florida.

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An image — an artist’s rendering — from the company’s video about the new facility being built near Homestead. Atlantic Saphhire

“Everyone has been fantastic — the community, the county, the regulatory, it has been very positive,” Prado said. “And there is a big economic development story here.”

According to Miami economist Antonio Villamil of Washington Economics Group, which did an economic-impact report on the project, the construction of the first phase of the project is estimated to bring 2,745 direct and indirect jobs. Throughout the construction and development of phase 3 plus operations of the entire project, the economic impact will be nearly 21,000 jobs, and the company plans a total capital investment of about $585 million, the Washington Economics Group’s report said.

When the project is finished, the facilities powered by global aquaculture technology will support 80 to 100 local jobs, including engineers, geologists, biologists, veterinarians and the workers that feed, move and process the salmon, Prado said.

To finance the project, Atlantic Sapphire went public on Norway’s stock exchange in 2017 and has raised about $102 million in equity to date. The company now is raising an additional $70 million in equity and $62 million in debt in the coming months for the Homestead area project, said Prado, a Miami corporate finance professional who consulted for Atlantic Sapphire two years and joined as full-time CFO in January 2017.

“We are now rolling it out. Our innovation center was our technology proof of concept and Miami is our commercial scale-up,” Prado said. “By the time we are cash-flow-positive in 2020, we will have over $230 million in capital invested in the company. And then [with phases 2 and 3] we will continue to scale.”

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A backhoe digs a trench for pipes at the construction site in South Miami-Date County. Atlantic Sapphire, a world leader in land-raised salmon farming, is building a massive construction project. Jose A. Iglesias jiglesias@elnuevoherald.com

The U.S. is now by far the largest salmon market and offers the biggest opportunity. That’s because the per capita consumption is relatively low compared to European countries. For instance, Germany has double the per capita consumption of the U.S., according to a 2017 Kontali salmon market report.

The big picture: The growing world population needs protein, and the economics of salmon are in its favor. It takes 4 to 10 pounds of feed for 1 pound of beef, while it takes about 1.1 pound of feed for a pound of salmon, Andreassen said. “If you look at the world three decades from now, it is obvious you can’t feed the world with beef, it’s just not going to work. Salmon will become more and more favorable in that global picture.”

Don’t expect to pay less for your salmon because it is sustainably land-raised — at first. But the company is projecting that its flavorful salmon will cost considerably less to produce than conventional salmon farming by 2026.

“It’s not going to be a product for the rich,” Andreassen said. “We want to feed the world.”

While there are entrepreneurial efforts into land-raised salmon farming, no one has achieved it at scale. Atlantic Sapphire’s plan for Homestead is the largest-known project for land-raised salmon, DNB Markets Equity Research has found.

Another Norwegian company, Nordic Aquafarms, recently announced plans for a U.S. farm in Maine, but it would have a third of the projected production of Atlantic Sapphire. Marine Harvest, a Norwegian company, is the leading producer of salmon, but it primarily uses net technology. “The technologies, the capital and the team — all the stars haven’t aligned until now. This is leading edge,” Prado said.

For now, Atlantic Sapphire is focused on its new facility, which will be built to sustain hurricane conditions and will be more than 12 feet about sea level, and on its plans for the rest of the 80 acres.

Longer-term, though, it doesn’t have to stop there, Prado said. “We could do this again — with salmon or with other species. We are under-promising and over-delivering, one step at a time. But you can see what is happening. We can do this nearby again.”

Who would’ve thought that about 15 miles from the warm waters of Biscayne Bay and in a region known for growing fruit, vegetables and ornamental plants, there would be a world-class salmon farming facility?

Andreassen said, “We want it to be as natural to buy salmon from Florida as it is to buy lobsters from Maine and Idaho potatoes.”

Follow @ndahlberg on Twitter and email her at ndahlbergbiz@gmail.com.

Atlantic Sapphire at a glance

Business: Organic salmon-farming with innovative technology. Building the largest-known land-based salmon farm.

Founded: 2010 in Norway

Corporate offices: Miami

Co-founders: Johan Andreassen and Bjorn-Vegard Lovik.

CEO: Johan Andreassen

Ownership: Publicly traded on Norway’s stock exchange since 2017; ticker ATLAS

Website: atlanticsapphire.com

Atlantic Sapphire U.S. by the numbers

380,000: Square footage of Atlantic Sapphire’s initial facility in the Homestead area slated for full operation in 2020.

12,000: Truckloads of crushed rock that will be used in the foundation.

60: Miles of water pipes that will be laid.

454,000: Number of gallons of recirculating, recycled water in each of the 36 65-foot-wide by 22-foot- deep salt-water grow tanks planned for initial facility.

59: Temperature of the tank water.

20: Tons of oxygen needed daily.

2,747: Estimated number of direct and indirect jobs created by 2020 with initial facility.

10,000: Number of metric tons of salmon produced annually when the 380,000-square-foot facility is complete.

40 million: number of salmon dinners produced annually in phase one of U.S. operation.

90,000: Number of metric tons of salmon produced annually after Atlantic Sapphire’s full buildout.

360 million: Number of salmon dinners produced annually after full buildout.

Source: Atlantic Sapphire; all numbers are estimates.

Why South Florida?

Southern Florida is believed to be the only place in the U.S. where salmon can be raised entirely on land at the massive scale planned by Atlantic Sapphire for its facilities in the Homestead area. That is mainly because of the aquifer structure, said Eric Meyer, operations manager for Atlantic Sapphire and a hydrogeologist.

“Nowhere else in the world do we have the conditions that allow us to have a disposal system that can take 20 million gallons per day of wastewater and confined above that we have zones that produce sea water all the way up through brackish, and then confined above that is the Biscayne Aquifer, our freshwater source,” Meyer said. “We have it all covered on one piece of property.”

Via wells, the Biscayne Aquifer, just below the surface, provides the fresh water for the farm. About 1,000 feet below and under a containing layer is the Florida Aquifer, providing the salt water. A $5 million injection well, 40 acres away from the other wells, releases treated wastewater to the contained boulder zone about 3,000 feet below ground. Mother Nature takes care of it from there. “We have no wastewater streams coming out to any beach or river or bay,” said Johan Andreassen, CEO of Atlantic Sapphire. “It is all contained.”

NANCY DAHLBERG

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