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Farm Focus: Meet Africa’s fastest-growing fish farm

From zero to 2,000 tons within only a few years while remaining sustainable? One entrepreneur shows it can be done.

Joseph Rehmann is looking back at a very eventful few years. Coming from a 'safe' job as CFO of a 700-employee fish farm in Ghana, he embarked on a risky new mission to set up the “most sustainable tilapia farm on the planet.”

And so far, things are looking good. 

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Tucked away on the shores of Kenya’s largest freshwater body – Lake Victoria – Rehmann and his business partner Steve Moran, an industry pioneer in African aquaculture, are now running a sizable aquaculture operation, which includes a hatchery, a genetics and broodstock unit, grow-out cages, a processing facility and a distribution arm.

The first fish were put into the water in June last year and by 2018 production will hit 2,000 metric tons. 

“That would make us the fastest growing fish farmer on the [African] continent,” Rehmann, who is heading the operation as its CEO, told IntraFish.

Moving fast

So how does one build up Kenya’s largest fish farm within two years only? It definitely wasn’t without hurdles, Rehmann said. 

The idea came about in early 2015, after he left his position at Tropo Farms in Ghana. “We saw there was a big opportunity in Kenya,” he said. “Lake Victoria was considered a ‘bad lake’ but it’s actually not, it’s a very interesting body of water.”

After conducting some initial tests, Rehmann and Moran, who is the chief operating officer of Victory Farms, scooped a “little grant” from an organization to write a business plan in May-June 2015. Shortly after that “we were convinced we had enough to make a go decision.”

After raising some funding in a seed round to do the initial research, as well as “hundreds of meetings with local villages and communities” to find the ideal location, the company got permission to put the first cages into the water in June 2016. 

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Victory Farms started with 50,000 pieces of Nile tilapia (Oreochromis niloticus), Rehmann said, and over the course of the past year this number grew to more than 1 million fish.

The company is backed by a group of investors, with industry veteran Hans den Biemann, a former long-time executive with Nutreco, Marine Harvest and Heiploeg, being the biggest, Rehmann said. 

Den Biemann’s support wasn’t only on a financial basis, but he also shared his insight and knowledge of the aquaculture industry with Victory Farms. “He is a really important mentor for me,” Rehmann said.

Further growth on the cards

Rehmann said there were “plenty of stumbles” since the inception of Victory Farms “but we’re growing fast.” 

The company is currently expanding its hatchery to produce 2 million fingerlings a month from September and “we expect that to accelerate quickly.” 

It is also sourcing broodstock from a local supplier, and in the future it wants to produce the fish from a “mix of Kenyan and our own fingerlings” to support the local industry.

72c3117c76a26ec324f5dbfaf654e1ed  Photo: Victory Farms

The company is investing more capital to reach the envisaged 2,000-metric ton production by next year. 

Victory Farm’s “biggest problem is the pace we can acquire land” to expand operations, Rehmann said. “It’s an extremely bureaucratic process and until recently we were only able to add bite-size pieces, before we bought a big plot from a group of people.”

Another issue is infrastructure, and especially power supply. “We’ve fried a lot of pieces of equipment because we’re so far remote in Kenya,” Rehmann said.

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But despite the fast growth strategy -- Victory Farms now has around 100 cages in the water -- Rehmann and his team are taking a “conservative” approach when it comes to stocking densities. 

“It’s a new lake for aquaculture farming, which means we have to be conservative and so far we’re not confident to take densities up,” he told IntraFish. The company is stocking 10 kilogram of fish per cubic meter, which can vary from cage to cage.

But Rehmann said the focus is not on producing as many fish as possible but on spending the time learning to do it right. And this strategy seems to be paying off, he said, adding from the well over 1 million tilapia stocked over the course of the last year, 1 million survived.

Building the African market

Rehmann said Victory Farms found “positive surprises in terms of marketing” its fish in Kenya. And that was down to Chinese tilapia producers, who started entering the market some years ago. 

Today the market is awash with cheap, frozen fish, sold at around $2 ( € 1.70) per kilogram. As a producer of fresh, locally grown tilapia, Victory Farms has a clear advantage and the company is trying to sell it at $3 ( € 2.60) per kilogram.

The company has 50 sales points at local markets, especially in the capital Nairobi and surprisingly its average customer earns less than $100 (€85.50) a month, Rehmann said.

“Anyone in a peri-urban market has the choice between our fish and imported Chinese tilapia and most of the women at these markets have adopted it very quickly,” he said, adding many call Chinese tilapia “plastic fish.” 

Victory Farms is focusing on the positives, he said, and the “significant” difference in quality is its unique selling point.

Rehmann said it’s unlikely that the company will ever be looking at export markets, apart from Ethiopia. 

“I don’t see that we’ll be competing with Regal Springs, we just wouldn’t have a cost advantage with them. I prefer to focus on this region and I believe it’s going to be the future,” he said. “Africa is going to feed itself.”

a8f500435f8e8f5020cb90735dfc2409  Photo: Victory Farms

Sustainability at the core

Victory Farm’s goal to become the most sustainable tilapia producer on the planet isn’t just a marketing gag to sell its fish. The company has sustainability at the core of its philosophy, Rehmann said. 

“It took me over a year to be confident with this but we’ve set a really high bar.”

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It aims to produce its fish in the most environmentally friendly way possible, it is socially committed with a plan for all employees to be shareholders, founded in the belief in inclusive capitalism, and it wants to be among Kenya’s leading companies in the fight to end poverty, to end hunger via food security, help people to healthier lives, do its fair share in gender equality, and in providing lifelong learning.

In addition, it wants to support the Kenyan government in strict water quality regulations for all fish farming in Kenya, and by installing off-grid and smart grid systems to run its farm. “To design it with sustainability and social impact at its core it’s the best development you can have in this area,” Rehmann said.

All this means also to provide employees with significantly higher average wages than usual for the area, provide them with healthcare, social security, long-term incentive packages and other benefits. 

And as a result of all this “people love their jobs,” Rehmann said. “That aspect is a huge motivator for us.”

But while there’s the social element and the environmental component, there’s also a third, Rehmann said, and that’s scale. 

“The business won’t work with a production of 2,000 metric tons,” he said. “It’s quite realistic that in five years we’re in four or five countries, producing close to 20,000 [metric] tons.”

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