Fish oil refiner seeks local supply

TRACY NEAL
Last updated 15:29 18/08/2014
Keeley
MARTIN DE RUYTER/FAIRFAX NZ
FUTURE PLANS: SeaDragon chief executive Ross Keeley says the ultimate goal is to grow the omega-3 market.

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The head of a Nelson fish oil refinery firm wants the New Zealand fishing industry to lift its quality management game so it can supply much-needed demand for top grade fish oil.

SeaDragon chief executive Ross Keeley said New Zealand could supply the fish oil needed to satisfy expected growth in demand and to create a premium New Zealand product if the fishing industry was prepared to improve quality management systems on its factory trawlers in particular.

Talley's Group Nelson general manager Tony Hazlett said while it was the next logical progression in extracting high-value oils, which Talley's already did, the capital costs of upgrading infrastructure to meet the strict standards would be "significant".

SeaDragon is a specialised manufacturer of high-quality, refined or concentrated omega-3 and shark liver oils, which has embarked upon a costly expansion phase.

Consents have been lodged for a $6 million purpose-built plant to be built in Venice Place, Stoke, [near Contour Roofing] and which SeaDragon will lease from the developer. The new premises were expected to be in production by next May, all going to plan, Keeley said.

The new refinery plant will complement the firm's existing plant in Nayland Rd, which produces hundreds of tonnes of shark liver oil dietary supplements and some refined hoki with concentrated omega-3 levels.

The new plant will produce refined fish oil from hoki, salmon, tuna and possibly anchovies, and could generate annual sales of $50 million. Staff numbers are likely to increase from 12 to 25 once the new refinery reaches processing capacity, with 50 per cent process workers and 50 per cent support services, such as quality management, logistics and administration.

Production of shark liver oil and squalene will continue at its existing factory in Nayland Rd.

SeaDragon's products are sold around the world, and are made from raw product sourced under strict controls from Chile, Peru, Spain, Norway, Senegal, India, Indonesia, New Zealand and Fiji.

Keeley said recently the challenge would be increasing production into the future "and selling more and more New Zealand sourced fish oil high in omega-3 into the international market".

SeaDragon was looking to import close to $10m in raw material, when Keeley believed it should come from New Zealand fisheries.

He said the ultimate goal was to grow the omega-3 market, and to make people aware they might currently be consuming anchovy oil from Peru which was going to Norway to be refined, China to be encapsulated, and then put in a bottle here in New Zealand.

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SeaDragon aimed to buy the oil "straight off the boat here, refine it here, put it in a capsule and have it on the shelf within a few weeks".

Keeley said the current quality management systems on the factory floor of New Zealand vessels were preventing them using available oil, but they were working with these companies.

He said Talley's vessels already produced "very good" hoki oil, but they lacked the infrastructure needed to comply with strict standards around storing oil for human consumption.

Conversely, there was one other factory vessel operating around the country which had the quality management systems in place, but was unable to produce the quality of oil required, Keeley said.

"We have the highest level of quality management under the Animal Products Act. We are EU certified, and that means that everything coming in must be certified as suitable for human consumption."

Hazlett said a lot of value had been added to processing already, and the next phase would be to make it fit for human consumption but the capital cost of setting up the ships in order to comply was not yet warranted.

He said the cost would be in converting ships to be able to store oil of a standard fit for human consumption, but it could happen in the future. If a vessel was built today, it would be designed with that infrastructure.

"Ten years ago, we never saved fish oil on these ships, but in the last decade we used it as biofuel in our own ships. In the last five or six years we've gone away from that to extracting higher value oil for aquaculture feed. The market is very strong for that."

- Nelson

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