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The Honolulu Advertiser
Posted on: Thursday, November 5, 2009

Isle fish farm ready to expand


by Andrew Gomes
Advertiser Staff Writer

Big Island aquaculture firm Kona Blue Water Farms said it has raised necessary funds to begin a planned expansion to Mexico that will help reduce costs of delivering fish to the Mainland, its biggest market.

The move is a key strategy for the company to achieve profitability following difficulty with high shipping costs that forced Kona Blue earlier this year to scale back local production of its trademarked amberjack grown in open-ocean cages off Keahole Point near Kailua, Kona.

Kona Blue would not disclose the amount of money it has raised for the project, but said it's enough to begin operating, including construction of a land-based hatchery.

Company spokeswoman Kelly Coleman said deployment of cages and young fish in the Bay of La Paz five miles off the Baja California peninsula is expected to happen by the end of this year, with an initial harvest 10 to 12 months later.

The fish raised in Mexico will be sold by the company under the same trademarked name it uses for fish raised on the Big Island — Kona Kampachi.

"It's the same species, and it's being raised in the same way," Coleman said. "It's just a different location."

Tropical yellowtail is indigenous to Hawaii and Mexico. Locally, the fish is also known as kähala or Hawaiian yellowtail.

The company expects to produce 500 tons of the fish in its first year in Mexico, equivalent to how much it produced last year in Hawaii.

"There's definitely an opportunity to scale up and grow from there," she said. "There's growing demand."

In Hawaii, Kona Blue scaled down production this year to about 350 tons partly because the company was losing money on the fish and partly to ease a transition to new offshore pens.

Kona Blue is replacing eight 3,000-cubic-meter submerged production pens with two 7,000-cubic-meter surface pens in the same area half a mile offshore.

As part of the changes to local production, Kona Blue anticipates not having any Kona Kampachi from late November until May.

After production resumes, the company hopes it will be able to restore annual local production to 500 tons with better efficiency, though there is no projected time- table for that to happen, Coleman said.

Kona Blue has been producing fish from its Big Island farm since 2005, and the product has won high praise from chefs and consumers.

Though some criticize farming fish in open-ocean cages for the impact on the marine environment from concentrated fish waste and potential escapes, the industry maintains that scientific studies show such operations in deep water with swift currents have no significant negative effects, and that aquaculture alleviates pressure on wild stocks of fish being depleted.

Kona Kampachi is rated as a "good alternative" by Monterey Bay Aquarium's Sea- food Watch program. The ranking is a step below recommended best choices of seafood but a step above products to avoid because of how they're raised. Farmed yellowtail from Australia and Japan received the avoid rating.

Kona Blue's fish typically retail for $16 to $19 per pound for filets, and about $9 per pound whole. It remains to be seen what price Kona Kampachi raised in Mexico will fetch.

Neil Anthony Sims, Kona Blue president and CEO, earlier this year said air freight from Hawaii to the West Coast cost the company an amount equivalent to roughly 20 percent of its gross sales. He said trucking fish to Los Angeles from Mexico would cost about 20 cents per pound versus $1.80 per pound from Hawaii by air.