Goshen News, Goshen, IN

Business

March 19, 2012

AG FOCUS: Tilapia farming continues to catch on in Goshen

GOSHEN — In the hot, steamy former rubber factory building that houses a new fish-growing enterprise, John Metz held up a jug of water taken from a nearby tank used to raise tilapia.

“It’s not fertilizer,” he said of the jug’s content. “It just contains soil amendment that invigorates the soil and allows plants to take up nutrients more readily.”

The liquid fish-farming byproduct is being sold by Northern Indiana Aquaproducts, which is tucked into a once-abandoned building at the former Western Rubber Co. complex on Wilden Avenue. The soil amendment is based on the tank water from the tilapia-raising operation, which is the newest form of agriculture in Elkhart County. The company also sells a powdered form of the amendment.

Metz and his partners, Kevin Boyer and Vince Del Prete, are all from Elkhart. When they looked around for a business venture to begin they quickly rejected the area’s recreational industry model and grabbed hold of the idea of raising tilapia and other seafood.

“What does everyone need,” Metz rhetorically asked. “Food.”

When Metz and his partners wanted to turn their idea into reality, they needed cash.

“Funding was terrible,” Metz said.

The partners sought out government funds, including grants, but nothing much was available. Then they turned to banks.

“We love your idea. We like your business model,” Metz said he was told by bankers. “We are just not going to give you any money.”

The only help they received was coaching and advocacy from the Small Business Development Center in South Bend. In 2011 the organization voted Northern Indiana Aquaproducts as its best emerging business.

The three investors now have 20,000 red, blue and white tilapia in three 3,600 gallon tanks. They are shipping fish to the Asian markets in Chicago and Toronto, Canada and other Eastern markets.

Tilapia is a favorite seafood in the Asian community, according to Metz. Seafood is a bit of a misnomer as the fish live in freshwater and are a cichlid, which is a family of fish native to Africa and the Middle East. Tilapia have been introduced around the world in warm-water areas and are widely grown in aquaculture operations because they grow quickly in warm water and are tasty, according to Metz.

The fish arrive as fry in Goshen and are then fed pelletized food for seven months before they are marketable. The ideal size for meals is 1½ pounds, Metz said.

“The smaller ones travel better,” he said. “The larger ones can get damaged.”

The company hires a hauler who delivers 10,000 to 12,000 fish at a time. Metz said markets and restaurants have holding tanks where they display the fish, the same as lobster is displayed live, so consumers can pick out the ones they want for dinner.

Business expanding

Northern Indiana Aquaproducts is already expanding its operation. Metz showed off the company’s larger building along Wilden Avenue that is being renovated to accommodate six saltwater tanks to raise white Pacific shrimp and two more tilapia tanks. The front of the building is being converted into a retail area that will be open to the public.

“You can place your order in the morning,” Metz said, “then come back by 5 p.m. and pick up your order.”

A greenhouse will be added this spring, where herbs and other plants will be grown to supply local restaurants and markets, he said. In accordance with the partners’ belief that nothing should be wasted, the plants will be fed with the company’s soil supplement.

As Metz looked around the expansive concrete block building that was being studded out for drywalling, he said, “This is a huge step up for us.”

It will take six to seven months for the first harvest from the new tanks. He expects the company will be producing 300,000 pounds of fish annually and 600 pounds of shrimp weekly by 2013.

“The bad part about this is we have outgrown that building next door,” he said of the original operation. “And as soon as we get in here we will have outgrown it. We are packed to the gills.”

Contracted growing is a standardized way that food companies obtain enough raw product to meet their retail needs. Northern Indiana Aquaproducts intends to bring the concept to fish farming.

The company has entered into a couple of contracts already with people who want to supply tilapia with the support of the company’s fish-farming knowledge.

“We have some people who have some unutilized space,” Metz said. “If they stay on our contract we will buy fish from them all day long. It is a way for us to expand without using up our capital.”

A growing business

Bob Rode is one of two people at Purdue University who oversee aquaculture education at the university. He is a member of the North Central Regional Aquaculture Center, one of five regional aquaculture centers established by Congress.

He said fish farming is still a tiny part of the state’s agriculture industry.

“Just recently we found out there is actually an uptick in the size and number of operations in the state,” Rode said. “It is still very small, but it is gaining ground in the state. One of the reasons is the locally-grown initiative that is coming on, where people want to know what is in their food and where it comes from.”

One of the best things about aquaculture as a business, according to Rode, is that an operation can start small and grow as the owners wish.

He said the Indiana aquaculture industry is growing mainly through word-of-mouth.

“Once you get a few places started and news gets out, they kind of feed on themselves,” he said.

Rode explained the aquaculture industry inputs are no more or less volatile than any other ag operation, so success is based on marketing.

“It’s really about finding your market,” he said. “Some of that has to do with size. If you are doing a local market, you can only get to a certain size.”

And there is competition, especially from catfish operations in the South, where the warmer weather allows fish to grow quicker without heating costs.

“It costs more here.” Rode said, “so you have to offer a premium product.”

Producers of aquaculture products should be thinking about the global market, Rode said. As China and India become more prosperous, the people there are consuming more food, including seafood. That has an impact on prices for products in Indiana.

“Seafood on a global scale,” Rode said, “is going to become more scarce, or more expensive.”

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