Kona Blue seeks Mexico expansion


POSTED: Thursday, April 09, 2009

Kona Blue Water Farms LLC says structural change is necessary at its Big Island operations or else it may not make a profit.

The aquaculture company, which has brought Kona Kampachi yellowtail to chef's kitchens throughout the U.S., is seeking a permit to switch from submersible pens to surface pens off the coast of Keahole Point while also moving forward with plans to expand to Mexico.

Instead of using eight submersible Sea Station cages (3,000 cubic meters each), Kona Blue wants to use two larger net surface pens (7,000 cubic meters each) and three smaller ones for its nursery and research.

This would reduce the dive time needed to harvest the fish, according to president Neil Sims, and be much more efficient.

“;We believe that we cannot continue to operate at this site, given the current farm configuration,”; he said. “;To be able to continue operating at this site, we therefore need to change the farm array, to allow for greater operational efficiency and more flexibility.”;

Staff at Kona Blue was reduced to 33 from 49 six months ago — most employees remain on the Big Island, while two are in Honolulu and two in California.

Kona Blue, which harvested its first fish from Hawaii's ocean four years ago, needs to raise about $2 million for the reconfiguration The company, which focuses mostly on producing the Kampachi yellowfin, also seeks to add moi to the permit and says it is considering eco-tours down the line.

During the transformation, production of the fish, which retails for between $16 to $19 a pound for fillets, will be scaled down to about 350 tons this year, said Sims, resulting in about half of the $6 million in sales it made from 500 tons last year.

At the same time, Kona Blue is also hoping to start a kampachi farm in the Sea of Cortez off the coast of Mexico with $4 million in capital.

The move would result in much lower shipping costs — $1.80 per pound in air freight versus 50 cents per pound for trucking — not to mention a smaller carbon footprint.

“;It becomes a more affordable product that we would be getting to the consumer,”; said Sims. “;It will be grown with the same environmental standards and with the same promise of product quality.”;

It would still take a few years to harvest the fish in Mexico, if the project there moves forward. But Sims said he is not moving from Hawaii.

“;We still intend to continue production here in Hawaii,”; said Sims. “;This is a global growth opportunity.”;

Demand for the fish's brand name, meanwhile, is growing, given that Kona Kampachi made its way to president Barack Obama's dinner table in Hawaii, according to personal chef Stephen Butler. The Monterey Bay Aquarium also rated the yellowfin tuna from Hawaii as a “;good alternative.”;

Kona Blue's draft environmental assessment went to public notice on March 8, while the 30-day public comment period closed earlier this week.