Ewa fish farmers win
first U.S. ocean lease

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By Lyn Danninger
ldanninger@starbulletin.com

Yesterday, Cates International became the nation's first company to sign a commercial open-ocean lease to raise and harvest fish.

The Ewa Beach-based aquaculture firm has been raising moi in offshore submerged cages. It had been operating for about 18 months on a verbal permit granted by the state.

The 20-year lease was signed with the state Department of Land and Natural Resources. In exchange for the use of 28 acres of submerged ocean lands about two miles off Ewa Beach, the company must pay DLNR either $1,400 in annual rent or 1 percent of its gross revenue, whichever is greater.

Cates is now harvesting and selling about 5,000 pounds of moi per week. The moi are raised in four 80-foot cages anchored to the ocean floor, said company President John Cates. The harvesting procedure, which is carried out twice a week, takes three people about 45 minutes.

But the company would like to expand. Currently, the baby moi, or fingerlings, are bred at the Oceanic Institute research facility in Waimanalo before being transferred to the off-shore cages to mature. That limits the amount of fish the company can transfer to the cages and eventually harvest, said Cates. The company would like to develop its own large-scale hatchery but will need further investment or a partner to do that.

"We need a commercial versus a research hatchery and are currently working hard to find the proper site and also to secure funding," he said.

"We could do it on our own but it would be quicker with investment," said Cates' partner Virginia Enos.

Cates said the industry would be worth at least $60 million per year once fully developed. There is also potential for several other species of fish, such as kahala and opakapaka to be raised and harvested in the same way.

Already there has been a lot of interest from all over the world, he said.

"The response has been outstanding," he said.

Cates said he had already received an inquiry from a Los Angeles company requesting about 16,000 pounds of moi a week.

"But, we can't do that yet," he said.

He has also traveled to a number of other areas in the world that are interested in doing similar things. But Cates said Hawaii has several natural advantages as a location for production.

"We have clean, warm water and we have a labor force used to working in the water," he said.

Even though a law allowing open ocean leases in Hawaii was passed in 1989, it has not been used until today, said state Department of Agriculture head James Nakatani, whose department first proposed the legislation.

"It took quite an effort just to get the legislation passed," said Nakatani.

Moreover, because open ocean leases were uncharted territory for the state, it took several years to get a verbal agreement then get through the permit process, Cates said. The first experimental cages were placed in 1999, he said.