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Caspian Royal
Fish & Caviar Company

an investment opportunity

Email contact:  Tarlan A. Mirkadyrov, Vice President


The nature of the investment, and the opportunity

It takes both skill and patience to produce the best caviar, just as it takes skill and patience to produce a fine wine or an excellent string of black pearls. Female sturgeons begin developing eggs at age 7 - 10 years, so there is an element of delayed gratification in sturgeon farming. Cash flow begins long before the first jars of caviar are labeled and shipped, though. California farmers have developed an efficient sturgeon-farming model in which only the finest and most promising female sturgeons are raised as caviar producers, leaving thousands of males and culled females to supply eager markets for fresh and smoked sturgeon meats. While these products can't compare with caviar in value, sturgeon meats sell at premium prices and are consistently in demand. The California experience has shown that the marketing of sturgeon meats can carry an enterprise until the caviar harvest begins.

Those few forward-looking individuals who started sturgeon farming in California in the early 1990s are now reaping the benefits of their visionary investments. Increasingly, the world is looking to farm-raised caviar, so much that caviar is viewed as one of the crown jewels of aquaculture. World markets formerly supplied by a Soviet managed fishery have lapsed into a state of largely unmet demand, further advancing the cause of farmers. The idea of the sturgeons of the Caspian and Azov Seas supplying enough caviar to satisfy the international market has become something of a wistful view of the past - competing fishermen under desperate conditions take everything they can and wild stocks have been thoroughly decimated. While this is truly tragic, and not entirely unexpected in such a politically unstable area, the end of a hunting era can also be viewed as the beginning of a farming era, and a tremendous opportunity for a small number of entrepreneurs and dedicated professionals.

Sturgeon farming is a combination of hard work and high technology. Despite the similarities of their ovarian products, the fabled goose that layed the golden eggs merely needed bits of bread, but stugeons require years of careful attention. Large tanks, daily maintenance, backup systems in the event of power failure, security, and proper veterinary care are needed in order to obtain the precious harvest of caviar. The enterprise is far more demanding than most people would imagine. These fish are grown on diets that have been the subject of doctoral dissertations under conditions designed by physiologists to minimize stress. The value of a single clutch of eggs is so enormous - tens of thousands of dollars and upward - so females approaching the time of sexual maturation are switched to specialized diets designed to support the rapid development of the finest possible quality eggs. The growth of the ovary is monitored by veterinarians using portable ultrasound equipment, and eggs are sampled gently by cannulation for microscopic and chemical analyses - all with the goal of optimizing the harvest. The correct balance of oils, the ideal salt content, and other chemical variables are all deliberately targeted as the gravid state of the sturgeon progressively advances. The caviar is removed surgically, leaving the female capable of producing additional eggs in the coming years. All of the technology described here is available for this venture.

Why Hawaii?

It is a misconception that Hawaii's subtropical climate is unsuitable for sturgeons or that they require frigid water; most of the highly sought-after caviar-producing sturgeons come from the southernmost portion of the former Soviet Union. Sturgeons are already being grown successfully in California and, on a much smaller scale, in Hawaii. Our experience and observations to date suggest that sturgeons adapt perfectly well to Hawaii, and the only noticeable effect of the absence of a cold winter is that there is no dormant phase to interrupt the natural growth cycle. The net effect is a shortened growout period and a more efficient and cost-effective operation.

Geographically, Hawaii is in a unique position for commerce with the East and West. We are capable of shipping live sturgeon eggs or fry from the former Soviet republics, and have made some prearrangements to do so. We are in a position to ship directly to markets in Japan, Singapore, and other Asian countries. Because Hawaii requires vastly more consumer goods than it produces, empty cargo planes leave every day and extremely favorable shipping rates can be negotiated by anyone exporting on a regular basis.

Historically, Hawaii has practiced aquaculture for hundreds of years, since the ancient Hawaiian royalty used ocean enclosures to grow favored species. This is not surprising, since the standard of water quality in Hawaii remains among the highest in the world. Specialists with experience in aquaculture nutrition, engineering, and veterinary science, to name just a few, have committed to life in Hawaii in support of the aquaculture industry. A skilled and experienced labor force is available. Agencies such as the State of Hawaii Aquaculture Development Program, the Oceanic Institute, and the ten-campus University of Hawaii system all have highly trained people and programs in place to lend support to fish farmers. A flourishing professional organization, the Hawaii Aquaculture Association, gives the industry a voice in the state legislature, and our congressional delegation includes Senator Dan Akaka, who has introduced the National Aquaculture Act in congress. In recent years, one or two bills have been passed into law per year by the State of Hawaii in direct support of our fish farmers. The consensus is that sturgeon farming makes sense for Hawaii and the critical mass of people needed to make it successful are here.

Hidden advantages of working in Hawaii

Hawaii's economy hinges on three elements - tourism, military spending, and agriculture, in that order. Times have been economically soft in large measure because of reduced travel and investment by Japanese tourists. The economic downturn has also been accelerated by reduced military budgets and erosion of profitability in sugar and pineapple - in short, the search is on for new economic diversification.  Aquaculture is always mentioned as an endeavor compatible with Hawaii's traditions and pristine environment, and is viewed as having continuing growth potential. Permitting processes have been or are being streamlined, agricultural land leases are at their most affordable, and a large state government is more eager than ever to justify its existence by promoting new ventures. Federal support is evident, too; the USDA regional aquaculture research plan for the coming year includes a new priority area for technical developments for sturgeon hatchery work in Hawaii.

Hawaii remains the living example of Paradise for most Americans and for people around the world. From a marketing perspective, this can convey a valuable advantage. Marketing analyses have shown that products identifiable as having come from Hawaii elicit the most positive of associations. The image has overtones of health, natural purity, vitality, virility, relaxation, luxury... not a bad fit with a premium caviar!

What about the risks?

Because it takes years to get the full financial reward from a sturgeon farm, the risks of something going wrong and spoiling the party should be considered. First of all, sturgeons are robust and hearty fishes - it is no accident that they have cohabitated with both dinosaurs and humans. They are generally not susceptible to disease, are not especially fussy eaters, and tolerate a wide range of environmental conditions. The principal goal of sturgeon farming is to produce a modest number of egg-producing females, as opposed to the huge turnover of fish needed to keep a conventional fish farm going. Therefore crowding is unnecessary, continuing imports of stocks from abroad will not be required, and the risk of introducing communicable diseases can be held to a minimum. Once these fish are a few months old, the risk of predators (birds, aquatic animals) is small. Theft and other risks can be minimized with appropriate culture techniques; backup power and water and security measures have been designed into our plans from their inception, and aquaculture insurance specialists have been consulted for advice on both coverage plans and methods of risk reduction. These elements are designed into our planned operation.

a few of our favorite links:

Aquaculture Network Information Center