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Cell Aquaculture closes site after $2.4m loss

AUSTRALIA - Hamilton Hill-based barramundi producer Cell Aquaculture Ltd will relocate its Mississippi aquaculture operations to Las Vegas, Nevada, after losing and writing off $2.4 million on the site.

The barramundi farming specialist has signed an agreement with US based project managers to establish a new aquaculture facility in Las Vegas, Nevada.

Las Vegas is the restaurant and tourist capital of the US and a prime market for an exotic clean water species such as barramundi.

Retained services
Cell Aquaculture has retained the services of key parties based in Las Vegas with experience in Barramundi aquaculture, new product marketing strategies and sales operations. Market research has already been conducted and resulted in initial strategies for operations, branding, promotions, sales and distribution.

The plan is to establish a 100 per cent owned, 500-plus tonne per annum facility and then expand in accordance with market demand. Suitable sites for the facility are currently being identified and analysed.

"Las Vegas is one of the largest consumers of seafood in the US and is a potentially lucrative location for the production and sale of Australian Barramundi," said Paul Hopper, executive chairman of Cell Aquaculture.

"Australian barramundi is an exotic species in the US and its premium taste and texture should ensure solid market penetration in our target markets."

Cell Aquaculture has also decided to cease its small Mississippi aquaculture operation. The board considers it uneconomic mainly due to its remoteness and small capacity.

"Unfortunately this facility will likely lose money or at best only provide small returns on investment. Cell must focus on high growth with confidence in high profitability for every part of its business. The Mississippi facility does not satisfy these criteria," said Mr Hopper.

The combined losses and write-off of the Mississippi investment was $2.41 million which was reflected in the company's accounts for the year ended 30 June 2007. Cell expects to re-locate and install a significant amount of the Mississippi plant and equipment to the Nevada site.

Source: Business News