The construction of an additional three on-site ponds, a commercial-scale hatchery and preprocessing line, with a combined valued of R23.5-million, has started in Graaff-Reinet, in the Eastern Cape, and is said to justify the establishment of a processing facility in the area once complete.
The R250-million Blue Karoo Trust (BKT) freshwater fish-farming project is currently required to transport its fish in refrigerated trucks to a processing factory in the Western Cape, as the processing of the catfish in retort pouches could only be undertaken in the province.
“Due to the increase in demand, the need for an in-house processing factory was inevitable. As such, ECDC [Eastern Cape Development Corporation] approached the Department of Trade and Industry’s (DTI’s) Employment Creation Fund to fund the construction of a processing factory,” said ECDC risk capital specialist Phakamisa George in a release on Monday.
Subsequently, the DTI had approved R5.4-million towards the construction of the processing factory for the BKT project.
The construction of the R23.5-million development began in February and was part of the BKT project’s R100-million commercial Phase 1, with an application having been submitted to the National Treasury Job Fund ‘agriculture round’ for R50-million to implement commercial Phase 1 at full capacity.
Once complete, commercial Phase 1 will enable 2 640 t/y of catfish to be produced, providing a “nutritional and shelf-stable food source” to about 275 000 people, the ECDC explained.
“This is an exciting addition to the Karoo Catch brand, which provides an alternative for rapidly declining fish stocks, as a result of climate change, overfishing and pollution. The Karoo Catch brand is based on fish farming, rather than harvesting wild fish stocks, which guarantees a reliable and sustainable supply of fish,” commented George.
“An offtake agreement is already in place for the first 120 t and additional letters of intent have been secured as the production volumes ramp up,” the ECDC noted.
George explained that on completion of commercial Phase 1, the initiative would have ten aquaculture production systems, a commercial-scale hatchery, a processing facility and small-scale training facilities for both farming and factory operations.
The phase was set to create 815 jobs (direct, indirect and induced), with 3 920 jobs being created by the end of commercial Phase 2. The ECDC had estimated that in Graaff-Reinet, every employed person supported about 4.5 dependants, which translated to the initiative supporting 17 640 additional people.
Meanwhile, the processing factory was expected to create jobs for about 100 people during commercial Phase 1.
“The factory team will receive both theoretical and practical training during the construction phase and will be absorbed on completion,” George added, with the ECDC pointing out that it had asked National Treasury’s Jobs Fund for R1.3-million to fund on-the-job training to create a ready pool of staff once the additional aquaculture and processing facilities were operational.
The Graaff-Reinet-based freshwater fish farming and processing initiative is said to be one of the biggest aquaculture investments in South Africa to date.
The BKT brand, Karoo Catch, received the funds for commercial Phase 1 of the project in 2014 from the Development Bank of Southern Africa’s Green Fund.
“From the moment the BKT asked for the development financier’s help in 2006, we were always confident that it would play a catalytic role in growing the infant aquaculture industry in the Eastern Cape. High impact initiatives such as this, place the province in an advantageous position to challenge the Western Cape’s dominance of the sector,” George noted.
Currently, the catfish farm operated a small-scale hatchery and two aquaculture ponds, one for practical training and one for production, which were capable of producing 22 t/m of fish.
The first commercial-scale facility was made possible by a R10-million injection in 2013 from the national Department of Agriculture, Forestry and Fisheries, which was used for infrastructure and operational costs, as well as capacity building. The first production facility currently serviced a 10 t/m off-take agreement for processed catfish.
The BKT first presented the idea to the ECDC in 2006 to farm tilapia, which led to the corporation spending some R238 032 on an environmental-impact assessment (EIA) to test the impact of farming tilapia on the environment.
The initial EIA was approved, but owing to market testing with various species of the processed product, a decision was made to farm catfish instead of tilapia. “From a farming perspective, catfish is a fantastic choice because of its more resilient nature, quick growth and low mortality rates,” the ECDC advised.
A further R612 080 was spent by the ECDC on two separate market surveys, which were supported financially and operationally by the UK Department for Environment Food and Rural Affairs and the Cacadu district municipality.
“We wanted to ensure market acceptance of the product and the packaging in an effort to secure additional offtake agreements and letters of intent for the initiative as production ramps up.
“In 2013, the ECDC-managed Eastern Cape Jobs Stimulus Fund, [provided] another R1.430-million for land preparation, electric fencing and an aquaculture training facility to kick-start the pilot phase that [enabled the establishment of] a small-scale trial facility on which the commercial-scale planning was based,” explained George.