Another aquaculture firm sinks

A Hawaii company that struggled to start a fish farm raising opakapaka in ocean cages submerged off Lanai gave up the effort last month, filing for Chapter 7 bankruptcy.

Maui Fresh Fish LLC had been working to establish its aquaculture farm for at least four years, and had built a hatchery on Maui but never obtained a state lease to deploy 10 cages the firm envisioned would produce 1.2 million pounds of fish a year.

Representatives of the Wai­luku-based business could not be reached for comment.

The liquidation plan for Maui Fresh is the third shutdown of an ocean aquaculture business in Hawaii, where the industry remains in a relatively formative stage that operators still view as having great potential alongside great challenges.

The other shutdowns involved Huki­lau Foods on Oahu and Kona Blue Water Farms on Hawaii island.

Hukilau filed bankruptcy two years ago and tried to reorganize its finances and stay in business before shifting to liquidation earlier this year. The company was founded as Cates International 11 years ago and for several years successfully raised moi off Ewa Beach. But an expansion plan led the company into deep debt as the farm encountered fish production and survival problems.

Kona Blue began selling kahala, or amberjack, branded as Kona Kam­pa­chi in 2005 and bolstered production to 500 tons in 2008. But inefficient cage configuration along with high shipping, feed and labor costs led to losses and a shutdown about two years ago.

The company was dissolved last year, though many of its assets including its ocean lease were acquired by another firm, Blue Ocean Mariculture, which resumed fish production and announced in June the availability of commercial-size fish for sale under the new brand name Hawaiian Kam­pa­chi.

Meanwhile, some Kona Blue personnel started another company, Kam­pa­chi Farms LLC, to advance ocean aquaculture research working with other species such as nenue (rudderfish), the giant grouper and roi (peacock grouper).

Neil Sims, co-founder of Kona Blue and co-CEO of Kam­pa­chi Farms, said Hawaii remains on the forefront of U.S. efforts to sustainably harvest marine fish through mariculture, or ocean aquaculture farming.

"Hawaii continues to offer tremendous potential for developing mariculture systems that can soften our footprint on the seas," he said. "Hawaii can be an exemplar for how to produce great-tasting, sashimi-grade fish in an environmentally sensitive manner."

However, starting a mariculture farm can be daunting. Hawaii Oceanic Technology Inc. was founded in 2006 to raise bigeye and yellowfin tuna off Hawaii island. The Hono­lulu-based company has published an environmental impact statement, patented its own cages and received approval for a state ocean lease but is still working toward starting commercial production.

Maui Fresh was formed in 2006, and appears to have encountered difficulties on different fronts including financing, rearing fish and opposition from fisherman.

During a public scoping meeting in 2008, the company noted that it had not been able to spawn opakapaka throughout the year, though it said research breakthroughs were encouraging. Maui Fresh said it planned to raise moi or amberjack as an alternative if the rearing problem was not overcome.

In 2009, Maui Fresh had built a land-based hatchery, hired a consultant to prepare an environmental assessment and applied with the state to collect young fish from the wild to breed, according to a state Department of Land and Natural Resources report. DLNR also said some Lanai fishermen opposed the location of the planned 80-acre farm and asked that it be moved.

"At present, they consider the conditions for business development as being unfriendly and are weighing alternative options," the 2009 DLNR report said of the company principals.

Last year, DLNR reported that Maui Fresh "remains challenged with securing the funding required to proceed."

Ed Cichon, a co-founder and managing member of Maui Fresh, said in a 2008 Hono­lulu Star-Bulletin interview that he anticipated the business would require an investment of $5 million.

In the bankruptcy filing, Maui Fresh listed debts of $858,000. The company listed assets of $1 million, though the whole amount represents a claim against a Maui accountant that potentially could be recovered.