Jenne Brammer
Thursday, 2 March 2017 10:15AM
Brad Adams harvests market-sized greenlip abalone off Augusta.
Ocean Grown Abalone director Brad Adams is planning a $10 million float of the fisheries company in August to take the business interstate.
Mr Adams said Augusta-based OGA, which uses artificial reefs to grow wild abalone, would use the funds to expand its operations to Esperance and Port Lincoln in South Australia.
The company hopes to be producing around 500 tonnes, worth about $50,000 a tonne at today’s values, within a decade.
The cash would also be used to build export processing and tourism facilities, including a retail outlet for abalone at Augusta.
“We expect net present value of around $10 million this year and hope to see that at around $25 million after our expansion project is compete,” Mr Adams told the Federal Government’s Efic conference yesterday.
Ocean Grown Abalone director Brad Adams will use the funds raised to build export processing and tourism facilities.Picture: Mogens Johansen
He did not rule out the alternative to a float of a deal with one of the private equity firms which had expressed interest in the company.
Cottesloe’s View Street Partners has been appointed as corporate adviser.
Mr Adams said View Street helped OGA raise $6 million privately last November for an expansion at Augusta, including increasing reef operations to 413ha, equivalent to 3km by 1.9km of prime abalone-growing water.
The expanded Augusta reef would lead to production of about 200 tonnes annually by 2021.
Mr Adams said he had received the green light from the State Government and would start “dropping reef blocks” next week. The reef blocks are seeded with juvenile abalone purchased from a land-based hatchery in Bremer Bay.
Abalone is harvested by commercial dive teams after two to three years.
“The abalone eat drifting seaweed. They key thing is there are no feed inputs — mother nature does a much better job,” he said.
“Therefore, it is considered premium wild catch, but we have the aquaculture advantage of continuity of supply.”
OGA celebrated its maiden harvest last November, selling 10 tonnes of premium wild- caught abalone to Hong Kong. Forty tonnes will be exported to Hong Kong this year.
BFC Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
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