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Special Feature: Shrimp start-up
New England shrimp farmers hope to create a niche for domestic product
By Melissa Wood
May 01, 2013
Like many types of partnerships these days, the people behind a shrimp farm that is the first of its kind in New England found each other online.
James Tran, founder and CEO of Sky 8 Shrimp Farm, investigated starting his own indoor shrimp farm by visiting operations in Indiana and Nevada and trying out small-scale experiments in his spare time. It was a career shift from the semiconductor business and his electrical engineering background, but made some sense given his family history of harvesting wild and farmed shrimp in Vietnam.
“Even though I came here when I was young, basically my whole family are fishermen,” he says.
He decided to pursue the project in earnest. After getting nowhere with Massachusetts Division of Marine Fisheries, he was told by a state regulator he needed to find a seafood expert. He found 40-year seafood industry veteran Peter Howard in an online search and gave him a call.
“He called me and said, ‘Do you want to start a shrimp farm? I said, ‘When do you want to start?’ He said, ‘Next month,’” remembers Howard, who is a part owner and overseeing sales and marketing for Sky 8.
A year later in April, their venture, located in Stoughton, Mass., was preparing to introduce its first batch of 16-count Pacific white shrimp (Penaeus vannamei) to the market.
Howard says the market focus for Sky 8 will be local — and upscale — with wholesale prices between $14 and $20 per pound.
“I see the market in fine dining,” says Howard, who hopes it will appeal to top Boston chefs cooking whole shrimp instead of the more common headless frozen product that is imported. “The shrimp are going to be sold right as they come out of the water.”
The company name comes from Skyworks Solutions in nearby Woburn, for which Tran designed and built semi-conductors. Tran included the number 8 in the company name because he believed it was the eighth farm of its type in the United States.
Sky 8’s shrimp operation is the first in Massachusetts, and the first of its type in New England, where the waters are too cold for outdoor ponds common in shrimp farming around the world. Other indoor farms can be found in Maryland, Illinois and Nevada. Sky 8 and other indoor farms are just a tiny slice of the U.S. farmed shrimp industry. Although shrimp is the most consumed seafood species in the United States, the majority, 1.17 billion pounds in 2012, is imported.
The uniqueness of the operation led to some initial challenges. Even with Howard’s help the permitting phase hit a roadblock when it took two months for the state to create an appropriate application form for them to fill out. It also wasn’t easy finding a landlord. Most start-ups don’t include giant indoor tanks of seawater and live animals.
The space that eventually became Sky 8’s home is located within an industrial park. From the outside, it looks nondescript within a row of brick warehouses. But inside, balmy temperatures are the first clue that something different is happening here. The 7,200-square-foot interior includes an office and laboratory in addition to five fiberglass tanks that are 6 feet deep and 12 feet across and hold about 6,000 shrimp each.
The first batch of post-larval shrimp arrived from a Florida hatchery on Nov. 30. The shrimp were the size of “mosquito larvae,” says Howard. “You could hardly see them.”
Four months later, the shrimp had grown to market size, but were still hardly visible in the tanks’ brown waters. The biological filter system (called “biofloc”) is a type of raised recirculating aquaculture system that only cleans a percentage of the water at a time, leaving the shrimp in water that is closer to their natural environment: It’s murky, but in a good way.
In carving out a new niche of farmed domestic product, the burgeoning crop of U.S. shrimp farmers won’t be looking toward each other for help, at least not yet. Tran hired a consultant from the Netherlands to help develop the system (he declined to name the consultant). As business partner Jimmy Devine explains, the information about biofloc is out there, but they’re not interested in giving away technology secrets after doing the legwork and paying for it.
“When I say proprietary — not really; [the technology is] just hard to find,” he says.
One unique aspect of the farm is that they use seawater hauled in from the nearby Atlantic. Water temperature is kept around 88 degrees and the shrimp are fed Zeigler shrimp feed from Florida.
Though the operation is small in scale now, the investors hope to grow. Devine is already building two 63-by-10 foot raceway tanks in the same space. They are looking for investors for further growth, which could include a vacant, adjacent warehouse space.
Tran’s vision for shrimp farming goes beyond the Stoughton warehouse. With his high-tech background he believes he can improve on other indoor shrimp farms. He’s invested in the future, which is why he wants to grow.
“I want to change the whole process of it,” he says. “If I run a family-owned business, $275,000 is more than enough, but I want to build this for the long term,” he says of the sum invested thus far.
Tran hopes that investors will see the operation and use the technology to build similar shrimp farms elsewhere.
“In every state, I want to put a shrimp farm,” he says. “I believe this could be done.”
Email Melissa Wood at email@example.com
Find other SeaFood Business articles featuring shrimp farming here.