Aquafarm 3 (AF3) was acquired by Tri-way Industries, Ltd. as part of SIAF's carve-out of aquaculture operations. AF3 (formerly known as Zhongshan A Power Prawn Culture Farms Development Co., Ltd., or ZSAPP, or as Prawn Farm 2 or PF2), has generated income for SIAF since May 2012. Phase 1 development work on the prawn hatchery and nursery farm, was completed in May 2012.
In Phase 2, we completed facilities for the production of prawns, brood stock, and associated expansion activities in June 2013. Production of prawns started from August 2013. A field report from our 2013 Investor Tour is available. Photos from a visit in March 2015 provide a status update, as follows:
From March of 2014 until March of 2015, Aquafarm 3 has:
Thirty (30) Mu (equivalent to five acres) of land has been converted to an indoor APRAS farm, designed with the capacity to grow up to 1,200 MT of prawns per year. Construction work, started during Q1 2014, is complete.
Prior to the TW carve-out, Zhongshan A Power Prawn Culture Farms Development Co., Ltd. (ZSAPP) was also the intended name of the future Sino-Foreign Joint Venture company ("SFJV"), subject to approval by relevant Chinese authorities under our application for SFJV status, established to own and operate Aquafarm 3. The Company had pre-paid $5,558,057 toward the consideration of its future SFJV toward the assets of the fully developed farm, equivalent to just under 20% equity interest of the future SFJV. AF3 has been generating revenue since May 2012. Before the carve-out, ZSAPP’s financial statements were not consolidated with SIAF's. Capital Award acts as AF3's sole marketing agent and recognizes income from the following:
AF3 has been successfully producing Giant River Prawn (Macrobrachium rosenbergii) fingerlings from the 5,000 pieces of breeding stock that were imported from Southeast Asian countries. The reproduction of the Giant River Prawn fingerlings has become consistent; consequently, during the third quarter of 2013, ZSAPP sold over 100 million Giant River Prawn fingerlings at an average of RMB460 / 10,000 fingerling, plus 258 million Whiteleg Shrimp (Litopenaeus vannamei, also known as Pacific White Shrimp) fingerlings at an average of RMB165 / 10,000 fingerling. During the past two years, our research confirmed that the demand and prices of the Giant River Prawns in the local domestic markets were high (at between RMB450 to 550/10,000 fries in 2012) because supplies of quality Giant River Prawn fingerlings is competitively low. This compared to Whiteleg Shrimp (price averaged between RMB150 to 170/10,000 fries in 2012), which suffered from problems of inbreeding and disease. As such, we expect high demand for our Giant River Prawn fries by the regional prawn growers, as they will be the offspring from our second generation breeding stock, that is free from disease and inbreeding problems. As of the last week of September 2013, we imported an additional 5,000 breeding-stock prawns from South East Asian countries in an effort to continue improving our offspring culture.
Photos of AF3's facilities, prawns, and prawn fries are available on our Facebook page.