The hot summer sun is glaring mercilessly on this February day on the coastal town of Hermanus on the south coast of South Africa. Not the conditions one would hope for when handling light-sensitive abalone. But Abagold has been in the business for a long time, and knows its trade.
What started with a simple idea back in 1984 is today a sizeable operation with a hatchery, four grow-out farms, a canning and processing facility, which was incorporated in 2006, and a turnover of ZAR 188 million ($13.9 million/€12 million) in the 2017 financial year.
The company has more than 10 million of the small mollusks at the site, in various grow-out stages, Werner Piek, head of marketing at Abagold, told IntraFish during a tour of the premises. Around 1-2 million abalone are produced per month from the hatchery.
It has been a lot of trial and error over the years, he said. "Our biggest challenge is time and the fact that we have to keep stress levels as low as possible."
The company’s abalone have a lifespan of between three to five years at the farm before they get harvested. Reducing shell damage and ensuring good feeding and nutrition is paramount for Abagold’s farm workers.
From hatchery to processing
The life of an Abagold abalone begins at the hatchery. The company has adult abalone, also called breeding pairs. Some of them originally came from the wild, Piek said, but it is now using second and third generation selected breeding pairs.
Abalone are broadcast spawners, which means fertilization happens externally in the water column. Larvae hatch and is then settled on racks with algae, where they metamorphose into small abalone, called spat.
After moving to the nursery, the baby abalone are kept on racks for three to six months and then transferred to nursery bins with cones. They stay there until they are about nine months old and their eyes become light-sensitive, Piek explained.
After the nursery stage, the baby abalone are transferred to the grow-out farm where they are sorted and graded every four months. This continues until they are between 150 grams and 300 grams in weight, which is equivalent to a lifespan of about three to five years.
Stocking densities depend on the age of the abalone, the size of tanks and the baskets, but are always in the range between 50 and 70 kilograms per cubic meter of water.
Abagold's facility is scattered with tanks in various materials and Piek said "we are still searching and developing the perfect tank."
Farming risks
Abagold uses ocean water to supply its farm and built a water recirculation system that reduces its energy use by removing air and sand from the incoming water.
The system also focused on more efficient pumps in order to reduce energy costs, Piek said.
However, risk are a given nevertheless. Last year, around 30 percent of its abalone was killed due to red tide, which released the deadly organism Yezotoxin.
This caused losses of ZAR 55 million ($4.1 million/€3.5 million) and will take years to recover.
Growth was delayed by at least six months. Sales dropped to 50 percent of the normal volumes and will be at this level for two years, Piek said.
"We expect to be back in full production again four years after the red tide," he said.
The operation is also heavy on electricity and Abagold is currently trying out different models to cut costs.
It installed a pilot solar system, which is currently being used to evaluate different types of panels and optimal angles, Piek said.
Abagold sister company Mean Sea Level is currently busy developing and constructing its first fully operational 1,000 kW Wave Energy Converter as well as a 100 kW Hydroelectric Energy Recovery plant.
"These projects will serve as proof of technology and demonstration plants in South Africa," Piek said.
The feeding challenge
Another challenge in abalone farming is feeding. Abagold feeds its animals between three to five times a week.
“Abalone is more of a grazer and eats for prolonged periods,” Piek said. “This means our feed has to be water stable for at least 48 hours.”
To overcome this challenge, the company invested in its own feed production facility back in 2015, which is located right across the street from the main farm.
In the 2018 financial year, Specialised Aquatic Feeds (SAF) will produce 3,500 metric tons of feed, Japie Engelbrecht, general manager at SAF, told IntraFish during the visit.
"Water stability and digestibility" are the biggest challenges, he said. Around 23 percent of the feed is sold internally to both Abagold, which has a 70 percent ownership stake, and to Viking Aquaculture, which invested in a 30 percent stake in in SAF in a deal worth ZAR 9.95 million ($750,000/€638,000) last year.
Trout feed is the largest volume, which is all sold to external customers, Engelbrecht said.
"We are very serious about product quality, customer service and technical support – this will ensure marker share growth locally," he said about SAF's future plans. "We also look at exports to various countries and also supply to shareholders new ventures abroad. Increase contract manufacturing volume to fill the plant and thereby reduce overhead cost contribution to specialized formulations."
Markets are shelling out
The long grow-out time of abalone is paying off. Abagold sells its products mainly to Asia, where customers fork out between $30 (€25) and $50 (€43) per kilogram depending on the size and format.
Piek said Hong Kong is "a main market," especially for live abalone (60 percent), while the rest goes to Taiwan, Japan, Singapore and Malaysia.
Dried abalone is mainly destined for China (60 percent) and the rest to Singapore and Hong Kong. Canned abalone is mainly sold to Hong Kong with smaller quantities to China and Singapore.
"The abalone market is very dynamic," Piek said. "On the one hand its a seafood and on the other its a traditional festive and luxury food."
There are challenges, however. China has high import duties on South African abalone. In addition, sales to the EU are still an issue as exports from South Africa have not been listed yet.
"We have been working on this for over 10 years and every time the EU has another request," Piek said. "Its a slow process."
