FRD Japan Co., Ltd. (“FRD”, Representatives: Yoichi Tsuji and Tetsuro Sogo) has decided to construct a commercial land-based aquaculture plant for trout farming (“Commercial Plant”) in Chiba, Japan. With the operation of the Commercial Plant, FRD aims to produce 3,500 metric tons of trout annually starting in 2027. In addition, FRD will raise funds through a third-party allocation of new shares and loans using its framework for blue sustainability finance. The funds to be raised will be used for the construction of the Commercial Plant, as well as for working capital, research and development, and investment (including expenditures for the pilot plant currently in operation and preparations for future large-scale plant development).
Capital increase through a third-party allotment of new shares
FRD has reached agreements with Air Water Inc., STI Food Holdings, Inc., Sekisui Chemical Co., Ltd., Haseko Corporation, Sumitomo Mitsui Trust Bank, Limited, Mitsui & Co., Ltd., and MUFG Bank, Ltd. to raise a total of ¥21 billion through a third-party allotment of new shares.
Financing through the company’s framework for blue sustainability finance
FRD has entered into a loan agreement with The Keiyo Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, and Resona Bank, Ltd. to finance the construction of the Commercial Plant. FRD has developed a “blue sustainability loan framework” and has obtained an independent second party opinion from Rating and Investment Information, Inc. on the conformity of this framework with the principles and guidelines set forth for green financing by international organizations.
(Note: Blue sustainability finance is a type of sustainable finance that contributes to building a sustainable society by providing solutions to environmental and societal issues, and in particular, refers to the financing of projects that contribute to the conservation of the marine environment and marine resources, etc.)
After operating pilot plants for five years, FRD is now ready to move into commercial operations
FRD has been operating pilot plants for trout farming in Chiba and Saitama since 2018. The experimental plants have farmed more than 20 generations of fish and have demonstrated stable trout production without depending on the sea by maintaining an ideal water quality through a unique closed recirculation aquaculture system (“Closed-RAS”).
Over the five years of operating the pilot plants, FRD has accumulated sufficient knowledge to now be able to launch the Commercial Plant, both in terms of improving its proprietary Closed-RAS and increasing the efficiency of its farming operations. With the planned Commercial Plant as the first, FRD aims to develop multiple land-based aquaculture plants for farming salmonoids with a maximum capacity of 10,000 metric tons per plant, mainly in Asia, including Japan.
Against the backdrop of global population growth and a changing food culture, the demand for seafood as a source of high-quality animal protein is increasing year by year, and the need for sustainable aquaculture products is growing ever more. Meanwhile, with limited suitable sites for marine aquaculture, the development of a land-based aquaculture industry is necessary to support the increasing demand for marine products. FRD’s Closed-RAS uses advanced filtration technology that utilizes bacteria to maintain water quality through closed recirculation of breeding water without the use of natural seawater. This greatly reduces the cost of water temperature control during water intake and the risk of fish disease infestation, which have been hitherto high-cost factors in conventional land-based aquaculture, and will also remove the limitations on site selection by allowing for aquaculture to be carried out onshore as well.
In Asia, where sea water temperatures are high, it is difficult to farm salmonoids at sea during the summer, and most farmed salmonoids are imported from cold regions such as Norway and Chile. In land-based aquaculture, water temperature control enables year-round salmonid farming in Asia, and the location of plants near large consumption zones makes it possible to distribute products with a high degree of freshness at low transportation cost. FRD is committed to developing a land-based aquaculture industry with the aim of establishing a sustainable means of producing marine products and realizing a world where people can enjoy fresh and affordable fish.
＜Overview of the Commercial Plant＞
|Fish species to be produced
|3,500 metric tons per year
|Construction start date
|July 2023 (planned) (development work to start)
|Operation start date
|Shipping start date
＜Profile of FRD＞
|Name of Company
|FRD Japan Co., Ltd.
|Head Office: Iwatsuki, Saitama-shi, Saitama Pilot Plant: Kisarazu-shi, Chiba
|Yoichi Tsuji and Tetsuro Sogo