Local Startup Looks to Make a Big Splash in Shrimp Farming Industry
Minnesota’s next big farming venture may not come from the soil, but salt water.
Tru Shrimp Company, a spinoff of livestock nutrition company Ralco that incorporated in January, announced a multi-million dollar plan last week to build three facilities—two production and one for training—in the southwestern corner of the state.
Part of the cost to construct or, in one case, renovate a processing facility owned by the U.S. Department of Agriculture, is being covered through two fundraising rounds. So far, 18 investors have purchased nearly $15.5 million in convertible notes from Tru Shrimp. Another $5.5 million remains to be sold.
The company told the Duluth News Tribune that a second investment round would launch in early 2018.
Around that time, the largest of Tru Shrimp’s three construction projects, a shrimp production facility in Luverne that’s billed at over $50 million, is set to break ground. Central to the nine-acre facility will be the company’s unique aquaculture system, which stacks tanks (or “tidal basins”) eight high, each of which is dozens of feet in length.
More than 8 million pounds of shrimp are expected to come out of the “harbor” annually.
Meanwhile, a vacant plant in Marshall—the one owned by the USDA—will operate as the company’s shrimp hatchery.
The third facility will operate as Tru Shrimp’s training facility, located near its existing Innovation Center and Laboratory in Balaton.
“What is happening in Minnesota has not been done anywhere in the world,” Tru Shrimp president and CEO Michael Ziebell said in a statement. “There are 1.6 billion pounds of shrimp consumed annually in the U.S. and 80 percent of it is imported, primarily from Southeast Asia. The facilities in Marshall and Luverne will produce the most natural shrimp possible using a sustainable, antibiotic-free, and environmentally responsible approach.”
Parent company Ralco purchased the patent for the stacked shrimp tank concept from Addison Lawrence, a scientist at Texas A&M, in late 2014. As Tru Shrimp establishes its first harbor and supporting facilities, it hopes food buyers will notice a difference in quality between its product and that of its foreign competitors, which are raised in ponds.
Locally, the construction and opening of three agribusiness facilities is expected to make a big splash.
“It’s a rare opportunity to become the center of a new source of protein production,” Marshall Economic Authority Director Cal Brink said in a statement. Pat Baustain, the mayor of Luverne, added that the projects would be “a tremendous economic boon” for the area.
A recent report conducted by the University of Minnesota found construction of the Luverne harbor alone would generate more than $48 million in economic activity and support an estimated 330 jobs. Once complete, the facility is expected to generate upwards of $23 million in economic activity annually for the region, $5.6 million of which would be income for the 124 people working at the site.
Why raise shrimp in Minnesota?
Although Tru Shrimp’s parent company is headquartered in Marshall—just 40 minutes from South Dakota and an hour-and-a-half from Iowa—CEO Ziebell noted the startup is often asked why it chose one of the driest parts of Minnesota to farm shrimp.
“The answer is because the feed is here,” he said. “Economically and environmentally it makes much more sense to raise shrimp near their food source than to ship feed to shrimp raised in coastal ponds thousands of miles from the U.S. market.”
Foremost on the dietary plan for the company’s shrimp are soybeans and corn, both of which Minnesota ranks as a top five producer of in the country. Hard red wheat, which is also grown locally, will be used.
“The shrimp feed will be made from grains grown in Minnesota, which is good for all farmers in the state,” said Minnesota state senator Bill Weber.
Medical field impact
Chris Swedzinski, a Minnesota House Representative for District 16A, noted Tru Shrimp’s facilities could go beyond impacting the food industry.
“An often-overlooked segment of this industry is the chitosan made from the molts (shells) of shrimp that can be used for many purposes including biomedical applications,” he said in a release.
Chitosan is used as a treatment for obesity, high cholesterol and Crohn’s disease, according to WebMD. Doctors have also found the fibrous substance useful in treating complications from kidney failure and as a “donor tissue” applied to areas of the body where tissue has been taken to be used elsewhere.
Minnesota has long been a national leader within the medical startup community. Currently, the state tops every other state in health technology patents per capita (55.72 for every 100,000 people), according to Golden Valley-based health trade association Medical Alley.
“There will be initial positive economic benefits for southwest Minnesota,” said Swedzinski of Tru Shrimp’s facilities. “However, chitosan presents additional benefits throughout the state including urban regions.”
Tru Shrimp CEO Ziebell, who was formerly the chief marketing officer at Schwan Food Company, added, “Until now, the technology to effectively raise shrimp in the Midwest United States on a large scale did not exist; now it does and we have proven it.”