OCEANS ECONOMY: AQUACULTURE · Expansion - Jacobsbaai Sea Products - Abalone Note: 4 Projects moved to business opportunities Ventersdorp catfish Algoa Bay Yellowtail Adz Vantersdorp

OCEANS ECONOMY: AQUACULTURE

Belemane Semoli

Aquaculture Division

Department of Agriculture Forestry and Fisheries

South Africa - Norway Science Week

02 November 2016

2

1. Background on Operation Phakisa

2. Aquaculture focus area of Operation Phakisa

3. Overview of Initiatives

4. Progress on Initiatives

5. Investment Opportunities

6. Registration of projects on Operation Phakisa

3

1. Background on Operation Phakisa

Operation Phakisa was first publicly mentioned in

the

State of the Nation Address response…

The first implementation of Operation Phakisa

will be led by the Department of Environmental

Affairs. It will focus on unlocking the

economic potential of South Africa’s oceans,

which are estimated to have the potential to

contribute up to one hundred and seventy

seven billion rand (R170b) to GDP by 2033

compared to fifty four billion rand (R54b) in

2010.

H.E. President J.G. Zuma, July 2014

…

BRINGING TOGETHER Government, State Owned Entities,

Industry, Labour, Civil Society and Academia to collaborate in

unlocking the economic potential of South Africa’s Oceans.

…DELIVERING on the aspirations of the

National Development Plan 2030

…UNLOCKING the economic potential

of South Africa’s Oceans

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Operation Phakisa: Oceans Economy

Focus Areas

▪ Marine Transport and Manufacturing 1

▪ Aquaculture 3

▪ Marine Protection Services and Ocean Governance 5

▪ Small Harbours Development

6 ▪ Coastal and Marine Tourism

▪ Offshore Oil and Gas Exploration 2

Focus Areas

Enablers Skills Development and Capacity Building

Research, Technology and Innovation

4

DEA, DPME, DOT, DPE, DTI, DMR, DOE, DAFF, DST, DHET, DPW, DRDLR, DOL,

DHA, NT, DSBD, DOD, EDD, DOW, NDT, DIRCO, NDTourism

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2. Aquaculture focus area of Operation Phakisa

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Globally, Aquaculture contributes to almost half of total supply

Global total fish production – wild catch and farmed

(reported)

0

20

40

60

80

100

120

140

160

2012 1990 2000 1970 1980

Aquaculture

Wild catch

Share of

Production

44 %

56 %

Mn tonnes

+0.9% p.a.

+7.2% p.a.

▪ Aquaculture production has shown strong growth of 7.2%

p.a. from 1970 to 2012.

▪ Of the 141 million tonnes of fish consumed, over 70 million

tonnes come from aquaculture which about 50%

▪ An additional 50 million tonnes of fish is required to feed the

world population by 2030 and this production will come

mainly from aquaculture

Factors influencing supply

Supplementing

wild capture

within

maximum

sustainable

yields

▪ The need to employ sustainable fishing

methods has become more important due to

dwindling stocks of certain species

▪ FAO has classified most wild fisheries as

either fully exploited or over exploited

▪ Increasing demand for fish products

Better

technologies

and production

methods

▪ New technologies and breeds e.g. RAS

system and GIFT strain for tilapia has

enabled better yields and lower long term

input costs

▪ Higher stocking capacity for shrimps which

allows for higher yield

▪ Investment in research and development

Food Security

▪ Governments have a responsibility to ensure

that everyone has enough to eat.

▪ Food needs to be available, accessible and

affordable through a resilient and reliable

supply system

▪ Fish is regarded as an essential part of a

healthy and nutritious diet

SOURCE: FAO State of World Fisheries and Aquaculture 2014; FishStatJ

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HEADLINES 2019: SA economy reaps the rewards of Operation Phakisa

“Jobs in Aquaculture sector seen

as quality jobs,

improving livelihoods

in rural communities….”

““…exciting momentum built in Operation

Phakisa evidenced by

Aquaculture’s inclusive

growth…”

“…experts estimate the revenue

contributed by Aquaculture

to South Africa’s economy to be as

much as R 3 Bn…”

“…The Aquaculture sector in

South Africa now employs

15,000 people in direct

and full time jobs….. “

“…to Aquaculture in South African has

shown strong growth in 5 years, with

production from 2014 up 5

fold to 20,000 tonnes…”

Abalone

Oyster

Finfish

Mussels

SOURCE: Aquaculture Lab

The Lab aspires to catalyse growth in the sector by scaling up the sector as

an initial step to sector development

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The Aquaculture sector in South Africa has incredible potential and yet

remains at a small-scale leading to many challenges for producers


Difficulty in accessing financing

Under-representation in the sector

Inefficient regulation and governance systems

Limited market footprint

Small-scale

Fragmented research and development

“…It’s taken 28 months to get a single permit to expand my farm…”

“…we should be supplying salmon and trout instead of importing 1000s of tonnes…”

“…our R&D should focus on meeting market demand in South Africa…”

Small pool of skills

“…PDIs only make up less than 10% of the sector…”

“... The way the banks price risk is crazy… few people really understand the nature of our business…”

“…I lost all my fish since there was no fish vet…”

Challenge in sourcing quality input s

Rural infrastructure underdeveloped

“…High set-up costs are a huge barrier to entry in this sector…”

“…We don’t have the economies of scale to get quality feed from suppliers…”

“…We don’t have the economies of scale to be commercially viable …

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3. Overview of Initiatives

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Regulations

Skills

Market

Funding

Solutions developed focuses on priority initiatives that support

the implementation of the of projects

Quick wins

Selection and Implementation of Catalyst Projects

1

Inter-Departmental

Authorisations Committee 3

2

Capacity building and Skills Development

Legislative reform 4 Globally recognised

monitoring and

certification system

8 Preferential

Procurement

Coordinated industry-wide

marketing efforts 7

Aquaculture Development Fund 5

6


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Overview of Initiatives

Phase 3: Implementation of

initiatives in 2 to 4 years

Phase 2: Implementation of

initiatives in 12 to 24 months Phase 1: Implementation of

initiatives in 6 to 12 months

Quick wins

▪ Implementation of 9 initial

projects 1a

Establishment of an Inter-

Departmental Authorisations

Committee

3

5 Establishment of an

Aquaculture Development

Fund

Coordination of industry-

wide marketing efforts 7

2 Legislative reform to

promote Aquaculture

development

▪ Implementation of 6 ready-

to-operate projects and

selection of additional

projects

1b

▪ Implementation of 12 ready-to-

operate projects and selection

of additional projects

1

4 Establishment of a globally

recognised monitoring and


6 Capacity building and skills

development

6 Capacity building and skills

development

8 Preferential Procurement

of Aquaculture products

Initial short-term targets

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4. Progress on Initiatives

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Progress on Initiatives

Implementation of initiative 1

▪ Implementation of projects 1a

Quick wins

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Really Useful Investment Aqua Food

Blue Sapphire Pearls Southern Atlantic sea farms

Imbaza Mussels West Coast Oyster Growers

Hermanus Salmon Requa Mussels

African Olive Trading Chapmans Mussels

Oystercatcher Oysters Vaal fisheries Tilapia

Location and Species of 32 Aquaculture Projects

Inland Provinces

Phase 1 Phase 2 Phase 3 Coastal provinces

1

Western Cape

Eastern Cape

Kwazulu

Natal Free State

Northern Cape

North West

Mpumalanga

Limpopo

ELIDZ

Amatikulu

Paternoster Saldanha

Hamburg

Ventersdorp

Overberg

Hondeklip Bay

Algoa3

Doring Bay

Richard’s Bay

Gauteng

12 New Projects

Original 24 Projects

Hatchery expansion- Paternoster- Oyster

Expansion- Hamburg cluster- Oyster

Expansion- ELIDZ Oceanwise- Kob

Expansion - Roman Bay – Abalone

Expansion - Abagold

New - Amatikulu - Kob

New- Hamburg cluster - Kob

Expansion - DST Abalone Hatchery

New- Saldanha Molapong Cages - Trout and Salmon

Expansion - HIK Abalone

Expansion - Amatikulu - Ornamentals

New- Wild coast abalone ranching cluster - abalone

Expansion - Doring Bay Abalone - Abalone

Expansion- Saldanha Blue Ocean Mussels - Mussel

Expansion- Saldanha Bay Oyster Company - Oyster

New- Richards Bay Sea Cage Farming - Dusky Kob

New- Diamond Coast Abalone Ranching - Abalone

Expansion - Wild Coast Abalone - Abalone

Expansion - Marine Growers - Abalone

Expansion - Jacobsbaai Sea Products - Abalone

Note: 4 Projects moved to business opportunities

Ventersdorp catfish Algoa Bay Yellowtail

Adz Vantersdorp Southern Atlantic

SMME’s

(12+)

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Saldanha Bay Molapong Trout and Salmon

PROJECT PROGRESS

• For the first time in SA, salmon has been

grown to market size

• First experiment in SA to grow trout in sea

water

• 18,000 fish in 2 cages which are planned to

grow to 2-3 kg each by next year

• Underway with commercial application to

be followed by market research of the final

product.

Current operations

Grown out abalone

James with

3kg ocean

trout

ocean trout fillet Transfer of the trout

fingerlings to the

grow-out cages in

Saldanha

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2 Legislative reform to

promote Aquaculture

development

Quick wins Progress on Initiatives

Environmental Impact Assessment (EIA)

– Basic assessment required (2 years to

8 months)

Alien Invasive Species (AIS) regulations

published for oyster and mussels (green

zones)

Strategic Environmental Assessments –

project has commenced

General authorisation for aquaculture

coastal effluent in process, criteria being

refined.

Aquaculture Bill – developed and under

going stakeholder engagement

To promote the development

of an equitable, diverse,

viable and competitive

aquaculture sector; to create

a harmonised enabling

regulatory environment

within a framework of

sustainable development and facilitate investment

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Establishment of an Inter-

Departmental Authorisations

Committee

3

Quick wins

Interdepartmental Authorisations Committee

WG established on the 8th of September 2015

Depts represented at the meeting: DAFF,

DPW, DEA, DWS, DRDLR, DPME and

DPE/TNPA

Progressive engagement with TNPA and

DPW established to unblock issues access to

land and sea space

Detailed analysis of business process being

undertaken. This will be followed by

recommendations of streamlined business

processes.

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4 Establishment of a globally

recognised monitoring and


NRCS (National Regulator for

Compulsory Specifications) will

undertake sampling - MOU in place

between DAFF/NRCS

The SANS 2879 (Live and chilled

raw mussels & oysters) standard

was published on 12th of April

2016

Shellfish Monitoring and Control

Programme implemented.

Finfish Monitoring and Control

Programme to be implemented

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Fund

• Working group established

• Next step is to sign MoC

• 40 institutions identified and 26 engaged on a one-on-

one basis

• International investment missions undertaken

• Applications currently assessed through working

group

• GTAC is assessing model and mechanism for

Aquaculture Development Fund

• Inclusion of the Aquaculture Development Fund in the

draft Aquaculture Development Bill

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Fund

• Available funding towards aquaculture include:

• Debt or loan funding (e.g. Land Bank, Standard Bank)

• Equity funding (e.g. AgriBEE)

• Government grants (e.g. CASP)

• Government incentives (e.g. ADEP)

• Feasibility studies conducted on Marine Finfish,

Oyster and Mussels Other individual aquaculture

species feasibility studies still to be undertaken

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ESTABLISHMENT OF THE AQUACULTURE DEVELOPMENT FUND

Funding only required

for new projects

Where ADF will operate

ADF will

receive

financing

requests

from

projects and

disburse

funds to

projects via

identified

DFI

The Aquaculture sector faces difficulty in accessing finance as the sector is small and not well

understood by financing institutions.

ADF aims to fast-track growth, while meeting transformation objectives

▪ Funding pool to assist end-to-end Aquaculture projects

▪ Coordinates funding from various government departments and DFIs through an MoC

▪ Initial proposal for ADF to be managed by Land Bank/DFI

▪ Key focus of ADF to drive transformation / inclusivity by providing new entrants with

access to funding in pre-production phase

Phase 2 Phase 3 Phase 1 Phase 4 Project

lifecycle

ADF involvement and leadership

▪ Apply for permits,

approvals etc..

▪ Business plans

▪ Develop concept,

consult technical

advisors

▪ Acquire and set-

up primary and

supporting

infrastructure

▪ Begin production Description

of support

provided

The

“Business as

usual”

support/

funders

▪ DST/the dti

▪ NAMC

▪ SMME

department

▪ Seda

▪ The dti

▪ NEF

▪ IDC/

▪ NYDA

▪ Private investors

▪ other

▪ DAFF

▪ the dti


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6 Capacity building for

support services

Aquaculture Skills Working Group operational

SAIMI in collaboration with DAFF and DHET, will

shortly do a skills audit and needs analysis of

the sector.

DAFF has met with Sterling University to

discuss training of Vets and aquaculturist

South Africa-China training centre

Collaboration with Norway and France explored

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Coordination of industry-

wide marketing efforts 7

Quick wins

Received interest from Iran to supply 500 tons/month of tilapia.

Taiwan has also expressed interest to source oysters from SA.

Engaged various industry bodies regarding the establishment of

AquaSA (statutory body under the Marketing of Agricultural

Products Act

Market access & research

Market & product development

Consumer and public awareness

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8 Preferential Procurement

of Aquaculture products

Background Research has been conducted

DAFF and the dti in discussion on procurement of fish

products by schools, hospitals, corrections services etc.

Free State Economic Development Agency seeks to

source fish from aquaculturist for school feeding

schemes in the Free State.

Desktop research on preferential procurement

conducted in respect of aquaculture projects and

products.

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5. Investment Opportunities

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Aquaculture Development Zones

• An area or site either on land or at sea/water space set aside exclusively for aquaculture development

• Aquaculture Development Zone (ADZ) may have bulk infrastructure(reservoir, water pump) to attract

investors

• Minimising the cost of obtaining Environmental Impact Assessments authorisation due to the economies

of scale

• Minimising the costs of infrastructure development (e.g. access roads, electricity, water intake and

discharge)

• Easily coordinated support systems such as Extension Services, Veterinary Services, Hatcheries, etc.

• Coordinated marketing

What is An Aquaculture Development Zone?

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Location & Size

• Situated approximately 20km east of Port

Elizabeth

• Land based zone

Targeted Species

• Marine and Freshwater Finfish and Abalone

Current Status

• No fish farming is taking place at the

moment

• Project driven by the Coega Industrial

Development Zone

• Department of Agriculture, Forestry &

Fisheries provides technical support

Potential Production and Job Creation

• Production of 20 000 tons per annum

• Direct Jobs - 10 000 & Indirect Jobs 15 000

Eastern Cape Province: Coega Industrial Aquaculture Development Zone

Eastern Cape:

Progress

• Feasibility study conducted.

• Process for an Environmental Impact

Assessment is initiated.

Challenges

• Possible opposition to the Environmental

Impact Assessment

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Location & Size

• Algoa Bay, Port Elizabeth

• Area is 285 hectares

• Sea based zone

Targeted Species

• Finfish (yellowtail)

Current Status

• No farming activities are taking place

currently



• Direct Jobs 220

• Indirect Jobs 780

Eastern Cape Province: Algoa Bay Aquaculture Development Zone

Eastern Cape:

Progress

• Environmental Authorisation granted

• Environmental Authorisation has been

advertised in the local newspapers as per

requirements

• Appeals have been submitted to Department

of Environmental Affairs


Fisheries to respond to appeals to enable

Environment Affairs’ Minister to make a

decision in light of the submitted

Challenges

• Objections raised by lobby groups may delay

the finalisation of the authorisation.

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33

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Location & Size

• Situated in the west bank of East London

adjacent to the East London Airport.

• Area is 32 hectares

• Land based zone

Targeted Species

• Marine and Freshwater Finfish (salmon),

Abalone and Seaweed

Current Status

• Currently two farms in the zone

• Current production of 200 tons


• Production of 10,000 tons per annum

• Direct Job Creation: 2 000 jobs

• Indirect Job Creation: 3 000 jobs

Progress

• Zone driven by the East London Industrial

Development Zone

• EIA granted for finfish and abalone culture

• One farm identified under Operation Phakisa

• Continuous marketing of the zone and

identification of potential investors

• Two new farms to be established


Fisheries provides technical support

• Recently zoned for the culture of

Barramundi, Rainbow trout and Atlantic

salmon

Challenges

• An agricultural activity in the Industrial

Development Zone results in high levies for

the farmers

• Access to support services

Eastern Cape Province: East London Industrial Development Zone

Eastern Cape:

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36

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Location & Size

• Situated 60km northeast of East London

• Area is 26.4 hectares

• Land based zone

Targeted Species

• Marine Finfish, Abalone and Seaweed

Current Status

• Facilitating funding for support of

infrastructure development


Fisheries initiated process of identifying

potential investors


• Production of 2 000 tons per annum of

Dusky kob or 700 tons per annum Abalone

• Direct Jobs (1000); Indirect Jobs (2000)

Progress

• Environmental Impact Assessment

approved

• Waste Management permit issued

• Community resolution issued


Fisheries has developing zone designs,

architectural and management plans

• Progress on obtaining lease from Dep.

Rural Development and Land Reform

Challenges

• Access to funding for infrastructure

development.

Eastern Cape Province: Qolora Aquaculture Development Zone

Eastern Cape :

38

39

Location & Size

• Situated approximately130km from Durban

and 7km from Amatikulu River

• Targeted area is 108 hectares

• Land Based Zone

Targeted Species

• Ornamentals, Prawns, marine and freshwater

Finfish

Current Status

• Currently only 2 hectares are utilised for

Ornamental fish farming

• 2 ornamental farms in operation



• Direct Job Creation: 6 000 jobs

• Indirect Job Creation: 10 000 jobs

Current Status

• Two projects identified under Operation

Phakisa for the Amatikulu ADZ


Fisheries are in negotiation with the

Ingonyama Trust Board to obtain a letter of

consent to utilise the identified site


Fisheries initiated the process of obtaining

Environmental Impact Assessment. The BID

has been advertised.


Fisheries, KwaZulu- Natal Wildlife & Trade

Investment KwaZulu- Natal started

engaging potential investors (one new

investor for prawn farming)

Amatikulu Aquaculture Development Zone

KwaZulu Natal

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Richard’s Bay

• Potential for 600 tons production

• Prioritised through Operation Phakisa to receive DST

funding

• Deployment of first cages (four)

• Transfer of 25 000 fingerlings

• Rigorous environmental monitoring

PROJECT PROGRESS

Top view of sea cage

Fingerlings

Tsepo on his workboat

“Lucky Too”

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Location & Size

• Saldanha Bay is situated on the west

coast of South Africa, approximately

100km north of Cape Town

Targeted Species

• Mussels

• Oysters

• Finfish (Salmon/trout)

Current Status

• 10 aquaculture farms in operation in

Saldanha Bay

: Saldanha Bay Aquaculture Development Zone

Western Cape Province:

Progress

• Currently working on conducting blanket EIA

for new entrants into the industry

• Currently have 4 phakisa projects in

Saldanha Bay

• 6 new projects situated in Saldanha Bay

applying for phakisa status

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44

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Location & Size

• The Vanderkloof Dam is situated in the

Northern Cape approximately 130 km

downstream from Gariep Dam and is fed

by the Orange River.

• Vanderkloof Dam is the second-largest

dam in South Africa (in volume).

Targeted Species

• Freshwater Finfish (trout).

Current Status

• No farming activities are taking place

currently.


• Production of 11518 tons per annum

• Direct Jobs 1000

• Indirect Jobs 1000

Vanderkloof Trout Aquaculture Development Zone

Northern Cape Province:

Progress

• Feasibility study complete

• Environmental Impact Assessment

Authorisation to be obtained

• Commencing trout pilot project

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6. Registration of projects on Operation Phakisa

49

Operation Phakisa Aquaculture projects submission process (1/2)

CONCEPT DOCUMENT

• species, location, ownership

structure including

transformation , business

model, technology,

production output, markets,

source of inputs (seed, feed

etc..), required resources,

availability/accessibility of

technical expertise,

environmental parameters

(temp, terrain etc..) possible

risks and mitigation

DAFF TECHNICAL

EVALUATION

(ATS and Delivery

UNIT)

SITE VISIT

DAFF Aquaculture

Technical Services

and Delivery Unit

conducts site visit

and assess the

proposal

TECHNICAL

REPORT

DAFF provides a

technical report and

recommendations

3FT PLAN, KPI and

BUDGET

If the concept is viable

from an environmental,

economic and technical

point of view, the DAFF

requests the proponent

to develop a detailed 3

feet plan with budget and

indicator

The DAFF forwards

the application to the

Funding Committee

(FC) and AIC

Not

viable/complete

liaise with owner

The FC and AIC evaluates the

proposal and an in-principle

decision is made on the funding

mechanisms as outlined in

ADF, the AIC will provide an in-

principle decision on required

licenses, land/water allocation

where necessary (2 weeks)

Continued on following slide

Inclusion of

project

Operational

50

Operation Phakisa Aquaculture projects submission process (2/2)

The FC and

AIC provides

feedback to the

proponent

A feasibility study (environment, economics &

technical) is conducted with funds from ADF (this

is applicable to new projects). For expansion

projects a technical due diligence will be

conducted. The feasibility study is conducted by

a panel of experts that will be appointed as part

of Operation Phakisa, their appointment will be

for 5 years with a service level agreement

If the project is

feasible,

feedback is

provided to the

AIC and FC for

final approval

An EIA is

conducted

(where

applicable)

If the project is on state

property the lease for land

or water is signed

between the state and the

project owner

Funds released as

per agreed

milestones and

payment schedule

Monitoring and

evaluation team

track progress

Continued from previous page

2 weeks 8 months

2 weeks

4 weeks

Escalation

51

The approach to project selection was guided by 3 principles, and 4

evaluation criteria

Evaluation Criteria

▪ Geographical diversity of Aquaculture

activity

– Participation by all coastal

provinces

– Freshwater species evaluated to

include inland provinces

▪ Transformation

– All considered projects should

agree to strive towards the targets

set forward in the Agri-BEE

Charter

▪ Sustainable growth through balancing

new projects and expansion projects

1. Market attractiveness of species

2. Production readiness of project (time

to stock fish for commercial

production)

3. Planned scale of project

4. Availability of funding for project

2 dedicated

commerci

al

hatcheries

22 production

facilities1 Principles

Market

attractive-

ness of

species

▪ Projects deemed more

commercially viable if

they focused on a

species with high

demand in the market

(local / international)

Production

readiness

▪ Projects that are closer to

production would allow

the sector to meet its 5-

year growth aspiration

Availability

of funding

▪ Projects deemed more

commercially viable if

they can show evidence

of committed investors

Planned

scale

▪ Projects that maximise

economies of scale

would contribute

significantly to lab

aspiration of 20,000

tonnes by 2019

1 Some production facilities include hatchery, processing plants as well Abalone Ranching operations at different locations

52

• The Department of Agriculture, Forestry and Fisheries hereby invite potential and

new aquaculture project owners to register their projects to become part of

Operation Phakisa: Unlocking the Economic Potential of South Africa’s Oceans.

• Projects may be submitted any time however evaluations for inclusion will be

conducted on a quarterly basis. For evaluation criteria please refer to the

Aquaculture Lab report on the link below.

• Interested parties must refer to the New Projects folder available on the

Operation Phakisa website:

www.operationphakisa.gov.za/operations/oel/aquaculture/

• All applications and enquiries can be forwarded to:

[email protected]

How to Register New and Potential Aquaculture Projects

New Aquaculture Projects

http://www.operationphakisa.gov.za/operations/oel/aquaculture/

http://www.operationphakisa.gov.za/operations/oel/aquaculture/

mailto:[email protected]

53

Thank you

Documents

OCEANS ECONOMY: AQUACULTURE · Expansion - Jacobsbaai Sea Products - Abalone Note: 4 Projects moved to business opportunities Ventersdorp catfish Algoa Bay Yellowtail Adz Vantersdorp