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Minnesota—trū Shrimp Update, May 22, 2017

 

Michael Ziebell, president and chief executive officer of trū Shrimp Systems Company, says, “We’re building a very large, fully-integrated shrimp company.”  Formally incorporated in Delaware in January 2017, Trū Shrimp started as a division of Ralco Nutrition, Inc., of Marshall, Minnesota.  Formerly, Ziebell was the chief marketing officer of Schwan Food Company in Marshall, Minnesota.

 

trū Shrimp plans to build a hatchery that will support a network of shrimp farms and then process and market the farms’ production in the United States.  It thinks it can nab a significant piece of the USA shrimp market.  American consumers eat 1.6 billion pounds of shrimp year, about 80 percent of it imported from Southeast Asia.

 

Ralco, founded in April 1971 by Bob and Lou Galbraith, has lots of experience in livestock nutrition.  It’s a 46-year-old technology company with about $80 million in annual sales.  In 1990, Randy Galbraith, along with Jon and Niter Knochenmus, purchased the business from Bob and Lou Galbraith.  Jon led sales and Randy managed the operations.  Ralco marketed natural products to promote digestive and immune functions in livestock.  Products were called “Relief”, “Regano” and then “Birthright”, a baby pig milk replacer.

 

In 2004, Jon and Niter Knochenmus and their son, Brian, and his wife, Mindy, purchased the company from the Galbraiths.  In 2011, they introduced “Generate”, a product for soil and crop health, using its microbial catalyst technology.  In 2015, Brian was named the company’s president and Jon remained as president emeritus.  Ralco has about 225 employees, including 60 in Balaton, Minnesota.  It has six offices across the world and does business in more than 20 countries.

 

In December 2014, Ralco bested 40 companies to acquire a patent license for technology developed at Texas A&M University by Dr. Addison Lawrence, who consulted on the trū Shrimp project until he retired recently.  Lawrence developed the concept of super-intensive, shallow-water raceways that were12-inches deep, four feet wide and ten feet long.

 

Over the next five years, Knochenmus anticipates growth in all of Ralco’s business units, but he thinks trū Shrimp will be special.  “I think the difference in this shrimp opportunity is the size of the market,” he said.  In the past 12 years, the company has been “de-risking” the project.  “We’re probably at least 80 percent confident in our end model,” but there is “very little doubt in our mind.”

 

trū Shrimp started with raceways 37 feet long, stacked eight high with about 28 inches between them, enough room for a robotic feeder (designed by Action Manufacturing, Inc., of Marshall, Minnesota) to feed the shrimp.  Now, it’s in the process of making the raceways 50 feet long, and this summer, it will build some 150-foot-long raceways.

 

trū Shrimp stocks its raceways with postlarval shrimp.  “Our model today is that in 140 days we’ll have a 35-gram shrimp, which in the world of the retail consumer is a 16-to-20-count-per-pound [shrimp], which is considered an ‘extra jumbo’ shrimp,” says Ziebell.

 

The company is continuing to cut the number of days in the growout process.  It will harvest shrimp in nine sizes, starting with 71-to-80-count-per-pound salad shrimp and ending with jumbos.

 

trū Shrimp hopes to start building its first farm in 2018.  Each farm will cost about $54 million.  The construction phase could have a $48 million annual impact on a five-county area, could “touch the employment” of 330 people and generate over $14 million in payroll.  trū Shrimp will probably have 70 percent equity in the first farm.

 

trū Shrimp already has a private placement memorandum, seeking to raise $21 million in two stages.  The minimum investment is $500,000 for qualified investors.  Later, the company hopes to have an investment offering with an investment of $5,000 or less.

 

It may build farms in Lamberton, Luverne and Marshall, Minnesota.  It can build farms eight or ten hours away from its headquarters and still be able to service them.

 

trū Shrimp hopes to build three farms in five years in the Upper Midwest.  Each of the farms will be independently owned, with investment opportunities for local people.

 

In a separate but coordinated effort, trū Shrimp will build a hatchery this year.  It’s working to lease a vacant food processing plant owned by Schwan Food Company in Marshall, Minnesota, for its first processing facility.  The facility is currently approved by the USA Department of Agriculture, which should help it qualify for Food and Drug Administration approval.

 

Texas A&M developed two patents on the design of the trū Shrimp raceways, and trū Shrimp has a patent pending on a water chemistry management system, with other patents pending on the farm design and water chemistry.

 

The raceways have a very gentle counter-clockwise current that carries fecal matter, uneaten feed and shrimp molts to a sump, where they can be pumped away.

 

Each farm will have nine acres under one roof, produce more than seven million pounds of shrimp annually and employ 60 to 70 people.  Each farm will have its own wastewater treatment plant.

 

Ziebell says a big plus for the company and the region’s farmers is that over 45 percent of the shrimp diet is “soybean-related.”  The feeds also include hard red wheat, produced in Minnesota and the Dakotas, and have the consistency of “very coarse pepper put into pellets.”

 

Ziebell says, “...We are very proud of the fact that we are the first ever to be able to feed corn to shrimp.  It’s never really been done before.  We are now [producing] up to 300 pounds [of shrimp] from every ton of feed that is corn.  We’re pretty proud of that.”

 

Information: Michael Ziebell, trū Shrimp Systems, 330 3rd Street, Balaton, Minnesota 56115, USA (Phone 1-844-220-7574, Email michael.ziebell@trushrimpsystems.com, Webpage http://trushrimpcompany).

 

Source: AgWeek.com.  Building an Industry: Ralco’s Tru Shrimp Venture Builds on Region’s Crops.  Mikkel Pates.  May 22, 2017.