Darden Restaurants’s Lobster Farm in Malaysia
On October 24, 2010, Darden Aquafarm, Inc., a subsidiary of the Darden Restaurants, Inc., which includes the Red Lobster chain, expressed the desire to develop an aquaculture project in Sabah, East Malaysia (the part of Malaysia located on the north coast of the island of Borneo). Bill Herzig, Chief Executive Officer of Darden Aquafarm, Inc., said, its first projects will be implemented in collaboration with the Yayasan Sabah Group (a Sabah foundation dedicated to education and economic development). Tan Sri Datu Khalil Datu Jamalul, director of Yayasan Sabah, said he is proud to be selected as a business partner by Darden Aquafarm, Inc., adding, “We’ve talked...[about]...rearing lobsters....”!
Darden Restaurants is a Fortune 500 company headquartered in Orlando, Florida, USA. It operates over 2,000 restaurants it North America and has more than 200,000 employees, making it one of the largest full-service restaurant companies in the world.
In March 2012, Darden Aquafarm announced that it planned to jointly develop a $650 million, lobster farming park in Semporna, Sabah, East Malaysia, with Inno Fisheres, Sdn., Bhd., a wholly owned company of Yayasan Sabah.
The park will cover 9,300 hectares; 6,000 of them for commercial lobster farming; 700 hectares for research, development, training and a demonstration farm; and 2,600 hectares for the production of mussels. Instead of capturing wild juveniles to use as seedstock, like most other lobster farming projects in Southeast Asia, the project will have a hatchery to produce its own seedstock.
The project is expected to generate 12,000 jobs when competed in 2020. Malaysian citizens will be able to participate in the project as contract farmers or as entrepreneurs through a buy-back arrangement.
Darden, which will invest up to $300 million in the project over the next 20 years, said it does not expect to complete the farm until 2029. It will take several years to ramp up production and at least a decade before farmed lobster will have a big impact on the company’s bottom line. Construction should start in 2013, and the company hopes to start producing lobsters by 2017. It plans to produce juvenile lobsters in a company-owned hatchery and then sell them to independent contractors who will raise them in thousands of cages. Once the lobsters reach market size, the farmers will sell them back to Darden.
Darden said it decided to base the farm in Malaysia because tropical storms are infrequent there and the government is encouraging economic development in the area. In Asia, operating costs are lower than they are in other parts of the world, regulations aren’t as stringent and citizens aren’t as wary about using coastal waters for aquatic farms. Growing lobsters in Malaysia also gives Darden easier access to the Asian market. It began building Middle Eastern restaurants in 2011 and is already exploring markets in some parts of Asia.
Bill Herzig, Darden’s senior vice president of purchasing and supply-chain innovation, says the farm will be a “crown jewel” of environmentally friendly seafood production.
On April 10, 2012, I [Bob Rosenberry] chatted with Rich Jeffers, Director of Communications at Darden Restaurants (Red Lobster).
Shrimp News: What’s the name of the town in Sabah, East Malaysia, where your lobster farm will be located?
Rich Jeffers: Semporna.
Shrimp News: What species of lobster will you be growing at the farm?
Rich Jeffers: Panulirus ornatus, a spiny lobster.
Shrimp News: One of first news reports that came out on the project said that in conjunction with the lobster farm there would be a large area dedicated to mussel farming. Will the mussels be used to feed the lobsters?
Rich Jeffers: They will be one of the feed components.
Shrimp News: Who’s going to develop the lobster hatchery for the project in Malaysia?
Rich Jeffers: Darden owns the proprietary science for the development of the hatchery. We will own and operate it. One thing about the project that I would like to stress is that it’s just getting started. We don’t expect to begin harvesting animals until 2017. Another thing that I would like to point out is that we’re not going to stop serving the North American lobster in our restaurants. And when we do get into spiny lobster production, the markets that we’re initially going to serve are in Asia. Information: Rich Jeffers, Director of Communications at Darden Restaurants (phone 1-407-245-4189, fax 1-407-241-7078, email firstname.lastname@example.org, webpage http://www.darden.com).
On December 28, 2012, a Malaysian newspaper reported the following information on the lobster farming project, calling it “the Integrated Lobster Aquaculture Project (iLAP)”.
Presently, several thousand tropical spiny lobsters, valued at $50 per kilo, are the subject of intensive research at iLAP’s test farm. Run by Nanyang Nexus, Sdn.. Bhd., and Inno Fisheries of Yayasan Sabah, the project has the full support of the Sabah Government and the Sabah Department of Fisheries. Nanyang is jointly owned by Ever Nexus Sdn Bhd and Darden Aquascienes, Sdn., Bhd. (a subsidiary of Darden Restaurants, Inc.).
Darden Aquasciences’ managing director Julius Sarria said the idea of sea farming spiny lobsters was pursued after a former president of Red Lobster, one of Darden’s famous restaurant brands, became concerned about the dwindling wild stocks on which Darden was relying on for its supply. A way had to be found to secure Darden’s own lobster supplies through the most consistent, economical and most of all, sustainable methods.
“In 2006, a scientific team was set up, tapping the top five lobster scientists in the world, to seriously examine the feasibility of farming spiny lobsters. Initial research was done in the Caribbean,” Sarria explained.
In 2009, Darden Aquascienes began looking for the best place to pursue their lobster farming research and found that Malaysia, particularly the waters off Sabah, was the most suitable location for the project.
The pilot farm currently has 5,000 lobsters in stock, from 4 centimeter hatchlings to adults. By late 2010, a pilot lobster research farm was started in Semporna. Today Darden Aquasciences is in the process of verifying a five-stage modular production method that will allow harvests every 90 days after the initial 1½ years of culture.
“During farming, every 90 days the lobsters are moved to increasingly bigger cages to accommodate the size of the growing lobsters,” Sarria said. “Using this progressive method, the lobsters can be grown from 15-gram juveniles to around 1-kilogram adults in about 1½ years.”
Allowing for some lag time, he said the company expects a total of 3.8 crops a year using this production system.
“For this trial phase, we now have more than 5,000 individual lobsters ranging from hatchlings (measuring about four centimeters including the antenna) to the largest being 1.5-kilogram lobsters that can reach up to a meter in total length including the antenna,” Sarria explained.
Presently, no contract farmers are involved because the project is still in the process of evaluating the best lobster rearing method, testing the market and formulating the best feed for lobsters.
“There are still no revenues to show at this point because we are still mostly in the research stage. However, once the commercial phase kicks into gear in 2015, up to 20,000 people are expected to benefit by 2020,” Sarria said.
It is estimated that the revenue generated by lobster farming will amount to $7.6 million by 2020 and over $1 billion by 2030.
Job opportunities exist for semi-skilled and skilled workers, supervisors, technicians, managers, scientists, engineers, entrepreneurs, veterinarians, nutritionists and logistics specialists. “Sabahans will be given priority to fill job vacancies and contract-farmer positions, provided they qualify and satisfy specific requirements,” Sarria said.
He said a pilot hatchery is expected to be built by the second quarter of 2013.
Darden Restaurants will also set up its Asian hub in Kuala Lumpur, Malaysia, to manage the operation of its brand outlets in Asia and the Middle East.
Sources: 1. AllVoices.com. U.S. Companies Develop Prawn Farming in Malaysia. Toreksulong. October 24, 2010. 2. Seafood.com (an online, subscription-based, fisheries news service). Editor and Publisher, John Sackton (phone 1-781-861-1441, email email@example.com). Darden Investing in Ambitious Tropical Lobster Joint Venture in Eastern Sabah, Malaysia. Ken Coons (firstname.lastname@example.org). March 23, 2012. 3. New Strait Times. RM2b Lobster Farm for Sabah. Roy Goh (email@example.com). March 24, 2012. 4. Orlando Sentinel. Darden Plans to Build World’s Largest Lobster Farm. Sandra Pedicini (phone 1-407-420-5240, email firstname.lastname@example.org, webpage http://bio.tribune.com/SandraPedicini). April 8, 2012. 5. Shrimp News International. Telephone Interview and Emails from Rich Jeffers, Director of Communications at Darden Restaurants (Red Lobster). April 10, 2012. 6. The Star Online (Malaysia). The World’s First Pilot Lobster Farm off Sabah’s Semporna District Holds the Potential for Billions in Revenue. Stephanie Lee (email@example.com). December 28, 2012. 7. Bob Rosenberry, Shrimp News International, February 7. 2013.