Kuterra. A lesson unlearnt in the transition to nowhere.
. When activism walks in the door, innovation jumps out the window. - anonymous
‘’ In 2010 the ‘Namgis signed a memorandum of understanding with the Save Our Salmon Marine Conservation Foundation (SOS), now part of Watershed Watch Salmon Society, to find ways to mitigate the impact of open-net finfish aquaculture on local wild Pacific salmon.’’
https://coastfunds.ca/stories/namgis-first-nation-catalyzing-change-for-the-future-of-salmon/
. Conceived in 2010. Construction commenced in 2012 and operations commencing in 2014. With $10.5 million in gov and philanthropic moneys. As of March 2017 this money was all spent and very few fish to show for it; the Namgis were convinced to back loans of $3.2 million to Kuterra to keep the doors open bringing total financing up to $13.7 million.
‘After 5 years of full production Kuterra- which was designed to produce 470 tons/yr was producing 300 tonnes’ (Vancouver Sun).
And yet a BC Government report from April 2022 states ‘Kuterra never reached 35% of stated annual production capacity of 470 tons’.
Which means somebody is lying.. 35% of 470 is 164.5 not 300.
‘’At full capacity, Kuterra can produce 260 tonnes of Atlantic salmon per year’’ -Ha=shilth=sa
in an article from November 2 2020. From what I can tell the stated production capacity of Kuterra has been decreasing steadily as their poor results come in. It was shuttered in Feb 2020. The actual results were likely much worse than anyone let on. We will NEVER see a profit/loss statement.
Let that sink in. $ 10.5 Million dollars of capital investment in 2012 gets you negative $1.6 million in assets 2017. With a whopping $16,157 in net income. I truly understand that Kuterra claims to be a pilot project. But it was not advertised as such. How can this in any way represent the viability of RAS Atlantic Salmon aquaculture in BC? It doesn’t.
Also in march of 2017
‘’Fine-tuning operation has brought Kuterra their maiden “cash-positive” stage, four years after starting operations.’’ - Kuterra CEO Gerry Ullstrom told the audience at the 2017 Aquaculture Innovation Workshop in Vancouver, BC Nov 29 and 30 , 2017.
https://www.aquaculturenorthamerica.com/kuterra-now-cash-positive-1822/
Once again the quote below couldn’t be to continue the unfinished ‘Commercial Pilot Project’ could it? Certainly that was finished long ago.
’Namgis went looking for new investors a few years ago, realizing they lacked the capital to take their enterprise to the next level.’’
Alright, I have more questions. Is it still a pilot project at this point? ‘’new investors’’ ? Well the old investors gave Kuterra LP the money with little to no deliverables but some reporting without title to anything. Those are donors not investors. A pilot project normally has a fixed period of operations leading to a go or no go verdict based on the results and summary. Then you make an investment decision. From all perspectives Kuterra is a complete failure at profitably farming Atlantic Salmon using RAS on Northern Vancouver Island. Period.
2018 Assett vs liability? –$ 1,989,690 in the red. That didn’t take long. Where did $13.7 million go?
‘’Kuterra Limited Partnership had assets of $1,039,332 and liabilities of $3,029,022 as at March 31, 2018 and revenues of $2,231,462 and a net loss of $345,476 for the year then ended. Subsequent to March 31, 2018, Kuterra Limited Partnership entered into a Letter of Intent ("LOI") to sell an 88% interest in the acquaculture business, reducing the First Nation's interest to 12%.. The LOI provides the prospective purchaser 60 days to complete due diligence and finalize an agreement. As at the date of the financial statements, the final outcome was unknown.’’
By 2019.
‘’Kuterra Limited Partnership had assets of $679,492 and liabilities of $1,049,877 as at March 31, 2019 and revenues of $215,815 and a net loss of $341,807 for the year then ended. Kuterra Limited Partnership entered into a Letter of Intent ("LOI") to sell an 88% interest in the Aquaculture business, reducing the First Nation's interest to 12%. As at the date of the financial statements, the final outcome of this purchase was unknown.’’
. That is very interesting. What exactly would 88% of Kuterra’s aquaculture business look like? They have debt and no assets. Kuterra managed to spend almost 14 million dollars in 6 years or less and according their books has less than 100 k assets as of Feb 2020 when it was shuttered. What exactly would Emergent Holdings be buying if it wasn’t the IP?
https://namgis.bc.ca/wp-content/uploads/2022/06/2019-Signed-FS-NFN-Audit1.pdf
Enter the stonky aquavultures. Emergent Holdings Ltd. And ‘Taste of BC Aquafarms purchaser ‘Blue Star Foods’ Their sudden interest in BC’s only 2 significant attempts at RAS has nothing to do with their love of BC or Vancouver Island. It’s not the profits (there aren’t any) .They are after the intellectual property (IP). Which, according to Tides Canada at the time and now Makeway Foundation was all supposed to be ‘open source’ throughout as part of their plan to ‘save’ wild salmon.
The Nam’gis own the entire operation including the aquaculture business, the RAS production site, the land it sits on, the infrastructure and most importantly (I presume) the Intellectual property (IP) gained from the 6 or so years Kuterra operated before going broke. This highly valuable IP (believe it or not) is the real reason Emergent Holdings of Lansing Michigan came knocking. The same reason Blue Star Foods of Miami snapped up marginally profitable Taste of BC Aquafarms.
‘In 2012 the First Nation set up Kuterra Limited Partnership to construct and operate a land-based, closed containment recirculating aquaculture system (RAS) for Atlantic salmon. Kuterra Limited Partnership ceased operations effective February 1, 2020. At that date, the First Nation entered a lease with a third-party for the operation of the facility. Kuterra Limited Partnership allegedly had assets of $267,936 and liabilities of $168,774 as at March 31, 2021 and revenues of $1,969 and expenses of $2,843 for the year then ended. ‘
Wow. A commercial pilot that will financially break even. Amazing. In reality world that would mean creating enough profit on a 13.5 million dollar investment to pay a return on investment which would mean a trajectory towards an ability to pay a debt on top of all other operating expenses and liabilities. It never came close.
The numbers above have never been reported. But back to the story.
The below quote from Coast Funds does not sound like a pilot project. Of course farming Atlantic Salmon in a RAS is possible. Is it profitable? Is the question. And so far the answer here is unequivocally no. There is no sustainable development or saving the salmon when you’re broke.
‘’By establishing Canada's first land-based Atlantic salmon aquaculture facility with recirculating aquaculture system technology, the ‘Na̲mg̲is First Nation and its diverse partners are proving that environmentally sustainable salmon farming is possible’’
https://coastfunds.ca/stories/namgis-first-nation-catalyzing-change-for-the-future-of-salmon/
If all the funders of Kuterra are seriously going to stick with the ‘We just wanted to see if it is possible’ You really could have saved everyone an awful lot of trouble and just thought about that for a while. Nobody sane would ever argue against the possibility. There is no sustainability in aquaculture without the profit required to keep the doors open..
Below is cut from Coast funds Approved projects back in 2015 specifically for ‘commerciaizationl phase’ which is definitely not ‘’Pilot project’’
'Namgis First Nation 0400 Operating Capital for Commercialization of Kuterra to support the commercialization phase of Kuterra LP to prove the technical and commercial feasibility of rearing Atlantic salmon to market size in a landbased recirculating aquaculture system facility Completed 02-Jun-2015 $ 177,316
Here is a quote from the Vancouver Sun. No part of this describes a ‘pilot project’.
‘B.C.’s only land-based Atlantic salmon farm, Kuterra, has been ordered to wind down operations by the Namgis First Nation, even as the company seeks a buyer or partner to pursue expansion.’
The pattern seems to be that Kuterra is a pilot project when answering to poor performance and lack of revenue but a viable commercial production farm when asking for money to continue the grift. Neither are true. Kuterra in the present is one of many shining examples of how to lose a lot of money at aquaculture.
And yet as of April 29, 2022 the BC Government still considers Kuterrra as a ‘Pilot project’ in the report to the public quoted below. Underlining is mine. If it were not for this contractual obligation to report on performance data from Kuterra; we would know only how great it was and likely repeat the disastrous and wasteful folly. Oh yeah. We’re doing that.
‘The difficulty in assessing the many projects noted in the trade press is access to performance data, which is not readily available. Performance data that are available come from publicly traded companies that are not (yet) in commercial operation such at Atlantic Sapphire or from projects such as the Kuterra Pilot Project that received significant public funding tied to an obligation to report. To date, this information tells a somewhat different story. For example, Kuterra was designed to produce 470 tonnes at steady state but never achieved even 35% of that production target, nor did it achieve target harvest weights. Similar conclusions can be drawn from public reporting of Atlantic Sapphire’s performance, with harvests reaching 10% to 40% of targets in their first three years of production. ‘
The quote above is the BC Gov correctly referring to Kuterra as a Pilot project as of April 29 2022 . Normally a commercial pilot is concerned only with 1) Is it feasible? If yes, then 2) Is it profitable? By the end of the pilot. You need the answers in to both order to inform whether to proceed. Not Kuterra
I guess the ‘obligation to report’ is all the taxpayer got for the 5 or 6 million of their dollars. And it really does appear that although Kuterra did report its dismal performance to its funders who don’t seem to care; the data now only has value to Emergent Holdings as they pursue the goal of profitable RAS Atlantic Salmon aquaculture. Honestly if Kuterra has been dissolved and the premises leased out for 15 years, the likelihood of any meaningful continuation of data through Emergent Holdings is low. And it definitely won’t be open source.
‘’Our founding mandate was to be open-source and catalyze change in the industry,” explains Ullstrom. (CEO of Kuterra)
That didn’t age well. They did neither.
How do all these government and non-government organisations feel about current state of their so called ‘investment’ in ‘wild’ salmon? Why did Namgis after dissolving Kuterra lease the remaining assets to Emergent Holdings while at the same time claiming Kuterra to be ‘open source’ and dedicated to RAS as a means to save ‘wild’ salmon? And do the taxpayers,donors and government agencies that paid in part for Kuterra get access to data documenting the ongoing efforts at the facility they paid for? You know, to save the salmon… sustainably.
When activism and ideology walk in the door, innovation jumps out the window. - anonymous.