December 5, 2019

Tru Shrimp is committed to building Madison Bay Harbor - Daily Leader Extra : Local News

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Tru Shrimp is committed to building Madison Bay Harbor

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Posted: Tuesday, July 30, 2019 3:38 pm

(Editor's note: This is the first in a three-part series about Tru Shrimp, exploring the delay in breaking ground for the Madison Bay Harbor and the challenges the company must address before the Luverne Bay Harbor can be constructed.)

"Innovators change things."

Thus begins the second paragraph of Henry Ford's biography on the website for the Henry Ford Museum of American Innovation. It goes on to say: "They take new ideas, sometimes their own, sometimes other people's, and develop and promote those ideas until they become an accepted part of daily life."

Michael Ziebell, president and CEO of Tru Shrimp, holds up Henry Ford as an example when he talks about the barriers his company is working to overcome.

"He had to teach the world how to drive," Ziebell says with laugh. "We don't have to teach the world how to eat shrimp."

But right now, Tru Shrimp does have to persuade the world that technology originally developed and patented by Texas A&M can be used to produce shrimp commercially. To do so, the company must attract enough investors to build the Madison Bay Harbor, a facility which is expected to cost around $350 million.

"We have to convince a lot of people it's a good idea," said Ziebell. "We are doing it with our science."

Scaled for success

Since Ralco Nutrition, Tru Shrimp's parent company, acquired the patent for technology that involves raising shrimp in shallow trays of circulating salt water, the company has looked at more than scaling the technology for commercialization.

"It wouldn't have worked to just make it bigger," explained Jamie Brink-Thordson, director of sales and marketing.

Tru Shrimp renamed the technology, calling the trays Tidal Basins, and looked at everything from water quality to harvest solutions. In addition, the company began to conduct feed trials.

"You name it and we have probably tested it four or five times," Brink-Thordson said.

This research enabled Tru Shrimp to reduce the amount of time it takes to raise shrimp, and to become confident about the quantity and quality of shrimp they could produce, she indicated.

In 2016, Tru Shrimp constructed a pilot reef -- a stack of basins -- and by 2017, the company was breaking ground for its first production reef for more advanced trials.

The Balaton Bay Reef in Minnesota cost $11 million. But, with construction of the Balaton Bay Reef, the company's faith in the technology was reinforced. It worked.

"It has performed precisely as we designed it," Ziebell said. "In fact, it's exceeded our expectations."

In the past nine months, the company has raised four cohorts -- what Tru Shrimp calls the shrimp equivalent of a herd of cattle -- at Balaton Bay Reef. They have harvested shrimp nine to 13 times with each cohort to obtain shrimp of different sizes, and they are confident that commercial shrimp production is feasible in the Midwest.

"The Balaton Bay Reef has validated everything we learned in the lab and has given us a platform to push further," Ziebell said.

Financing the dream

Despite the success of the Balaton Bay Harbor, Ziebell is cautious about establishing a timeline for the Madison Bay Harbor.

"I've learned my lesson on giving dates," he said with a self-effacing grin.

Tru Shrimp wasn't able to make the announcement planned for construction of the Luverne Bay Harbor in Minnesota due to regulatory problems. The company wasn't able to break ground in Madison in June as planned because the company hadn't raised the necessary capital.

"It's a longer process than we imagined," Ziebell explained.

Now, he speaks guardedly in terms of what he hopes will happen.

He hopes the necessary capital will be raised by the end of the year. The company currently has 24 investors and "a very engaged investment bank."

He hopes the company can break ground next spring -- although with this year's spring weather, he's not sure when spring might arrive in 2020.

Currently, Ziebell just reminds himself that Ford's first two business ventures failed before he was successful in establishing the Ford Motor Company.

The discrepancy between early projections and current costs poses one of the challenges the company has encountered in raising the capital. Initially, a commercial harbor was expected to cost $45 million.

To date, more than $45 million has been invested in research and development alone, including $11 million for the Balaton Bay Reef, according to Ziebell. The results of these efforts has increased the price tag.

"The sophistication of the technology grew over the years," he explained. "As those sophistications were added, the price tag grew."

In addition, the original engineer's estimates were "significantly low," and the scale of the project has increased, Ziebell said. Initially, Tru Shrimp planned to harvest 4.5 million pounds of shrimp annually; that has been increased to 8 million pounds annually.

The nature of the project can't be ignored, either.

"The tidal basins are custom built. The superstructure is custom built. There's nothing like it anywhere in the world," Ziebell indicated.

To build the Balaton Bay Harbor, which is the model for future harbors, engineers from ISG, an engineering firm with offices in Minneapolis, Mankato and Sioux Falls, were shown what was needed and designed the harbor to fulfill those needs.

Because the harbors are unique structures, the up-front engineering and manufacturing costs are substantial. Once the first harbor is built, the cost for subsequent harbors is expected to be lower.

Ziebell wants the people of Madison to know that even with the delays, Tru Shrimp remains committed to building the Madison Bay Harbor.

"I ask for everyone's patience. We are going as fast as we can," he said.

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