Fish protein firm has investors hooked
Ex-BIM boss Jason Whooley says Biomarine Ingredients Ireland can do for seafood what Glanbia did for dairy
When Biomarine Ingredients Ireland (BII) chief executive Jason Whooley finally held up a jar of white powder in front of his shareholders he knew it had been all worthwhile.
The endless commuting from West Cork to Dublin, Donegal and Monaghan. The long hours spent away from his four small children. The risk of quitting a safe pensionable job at the top of a state agency. The stress over planning delays. The raising of tens of millions of euro. It had all been worthwhile.
The protein powder in the jar was produced in BII's new Monaghan factory from fish caught off the west coast. For Whooley, the former head of Bord Iascaigh Mhara (BIM), it was a very visible sign that BII was closer to its goal of finding lucrative markets for a plentiful local supply of blue whiting and boarfish.
In 2014 Whooley had been approached by Killybegs fishermen with a plan to add huge value to their catch of the two species. They were frustrated that of the 1.2 million tonnes of fish caught annually in Irish waters, 80pc of it was by foreign boats.
"Even Killybegs-based vessels often steam for up to three days up to the Faroe Islands or Norway to unload what they catch off the west coast of Ireland to find a market and get a better price for their catch," said Whooley.
A year earlier, as head of BIM, he had launched a plan for the Irish seafood industry to generate €1bn in sales within five years. BII's protein powder proposal fits exactly into that model for adding value to the industry.
Whooley made the jump back into the private sector to head up the joint venture between the 15 fishermen, represented by the Killybegs Fishermen's Organisation, and Norwegian marine biotech firm Biomarine Science Technology.
Three years on, after crossing some major hurdles, the company is about to begin commercial production of high-end proteins, oils and calcium from fish at a €10m facility in Co Monaghan for use as food ingredients by the global food industry.
BII also finally has permission to build a second, much larger, plant in Killybegs after a long planning battle. That facility will likely go ahead in 2018. It will cost €35m and take 18 months to build. When complete, BII will have the largest marine food ingredients plant in the world.
"Traditionally, value-added seafood was seen as putting breadcrumbs on fillets," said Whooley. "Our powder can be used as a food ingredient for protein fortification in breakfast cereals, drinks and a range of other foodstuffs. We have identified significant opportunities, particularly in the Asia Pacific market, for protein fortification and the global protein ingredients market is projected to be worth $39bn by 2020."
The company is also looking to capitalise on the rapidly-growing functional ingredients market. Protein derived from fish has health benefits for sufferers of conditions as varied as muscle wastage, weight management and diabetes and Biomarine has established a research programme to research opportunities, said Whooley.
"There's a growing world population and an insatiable demand for protein. Our raw material - fish - is a great source of protein. BII is the piece in the middle that takes a traditional raw material and converts it into an application that fits the demands of the modern market."
For Whooley, the scale of the ambition was similar to what Irish dairy companies had previously achieved by turning Irish milk into global ingredients businesses.
"We are trying to leverage what has happened in the Irish dairy industry where there was an underutilised pool of milk that companies used to become global players in food and ingredients. Kerry, Glanbia, Lakeland, Carberry, Ornua - all of these Irish companies have shown successfully how you can make the transition. We are the first company, not only in Ireland but in Europe, to try doing it at a scale with fish. We see ourselves very much as an ingredients company or biotech, rather than as a traditional seafood company."
BII is already working with key dairy industry scientists and commercial experts and Whooley says it has discussed the possibility of formal partnerships with Irish dairy companies. But there were major challenges along the way. Within six months of quitting his secure job in the public sector, BII's new boss faced a massive challenge. A planning objection lodged with An Bord Pleanala meant that the huge new Killybegs plant - then the only factory it was planning to build - was placed in an 18-month limbo. The company had to rewrite its business plan.
"'I've got this great new product for you' I would tell potential customers," says Whooley. "'Sounds good. When can I have it?' they would say. 'I don't know, whenever we come out the far side of An Bord Pleanala.' We had to make a decision as to how we could bring certainty to our timelines."
Whooley's solution was to park the Killybegs plan until the planning issue could be resolved. A vacant and much smaller food-processing facility was found in Monaghan.
"It was the best thing that ever happened the company. We had a period of time where, instead of focusing on building plants, we could focus on researching the product. We conducted product trials in various facilities around Europe and we now have strong market interest from global food companies, both domestically and internationally."
"We won't invest in the Killybegs plant until we know from Monaghan that we have a really, really strong commercial prospect," he says.
The hold up did not dent the ambitions of BII's shareholders. While the full €35m budget for the Killybegs plant has not yet been needed, over the last three years the Killybegs fishermen were happy to stump up over €12m for the Monaghan plant so as to retain their equity in the company.
"Through Goodbody Corporate Finance we just had a funding round and all of the shareholders decided they wanted to be involved. We raised just over €4m over the last three months bringing the total raised so far to €15m. The majority of that money has come from our shareholder pool."
A company like Biomarine that required major capital investment "isn't really suited to the banking environment in Ireland", said Whooley.
"There's lots of promotion to say the banks are backing Irish businesses but that certainly would not have been our experience. We were fortunate in that we didn't need it. We estimate that the Killybegs plant will cost €35m to develop, but when that time comes we will have a range of more traditional funding options available to us because we will have a proven business and a more established cashflow."
For Whooley, the move to BII was the latest step in a varied career that has always had one thing in common: the sea. During college he helped out with his family's successful mussel farming operation. After graduating he went straight into the role of chief executive of the influential fishing organisation Irish South and West Fish Producers Organisation. After 10 years in that role he was appointed ceo of BIM, where he stayed for seven years before moving to BII in 2014.
"It was a massive change. I had gone from the private sector into BIM and spent seven years as a public servant. I loved BIM. It is a great organisation, with great people and set up for the right reasons, as a development agency for the sector. So it has always been a bit special to me."
But Whooley also experienced first hand the frustrations felt by ambitious public servants.
"BIM is part of a public service infrastructure and because it is part of that it means that decision-making and control of your destiny isn't necessarily your own."
No sooner had he taken up the role in mid 2007, Whooley was faced with a challenging change of circumstance in the form of recession.
"Things went into lockdown. Our budget in my first year was about €60m and in year two it was about €20m. But never waste a good recession as they say and I think - necessarily - there was a lot of tightening up of the decision-making process."
He also found himself mired in a three- or four-year battle to implement the Government's decision to decentralise the organisation from Dun Laoghaire to Clonakilty, Co Cork.
"That distracted the organisation and myself from what we should have been doing, which was developing the industry. It was too much of a distraction and was not what our mandate should have been about. We implemented it but it was hugely time-consuming.
"In the public service there are a lot of different stakeholders that need to be taken into account and you don't have the same autonomy. What we have here in BII is a very simple mandate: delivery of our strategic plan following approval from our shareholders. There's no big long lines of communication before making a decision. That is what frustrated me most in the public sector. The system found ways of making things happen and not making things happen."
But for Whooley, there was always one overriding goal: "It's about trying to move the industry away from its Cinderella status." He strongly believes that the potential of the entire industry has been undervalued. "If you look at Irish society, probably most people are one generation removed from a farm so there is an understanding as to the role it plays and its importance to the economy. That level of understanding isn't there for the seafood sector so as a consequence it has been in the shade for decades and the sector has suffered."
So when Whooley held up that first jar of powder for his BII shareholders it felt like the start of something big.
Sunday Indo Business