British Columbia: Massive Chinese shellfish hatchery near completion on Sunshine Coast

Guess they're just not into you that much anymore.

Licensed to grow seed for geoduck, 

Pacific oyster, scallop and urchin.

Risk to investors and banks is a relative thing.

Apparently becoming aware that being beholden to a few shellfish operators in the United States was not an economically sustainable model, the Chinese are nearing completion of Phase 1 of what ultimately will be among the largest (if not the largest) shellfish hatchery and farming operations in North America. It will compete directly with current shellfish operators such as Taylor Shellfish and Coast Seafoods, who to date have had little real competition to disrupt pricing and distribution models which have existed for decades. How investors and those financing expansion will react to what appears to be a disruptive event is not known, but risk to returns is certainly elevated.

Comparison of Taylor Shellfish to Hummingbird Cove

Investors rule of thumb: Invest in an industry where anyone can make money. 

Yesterday, the Times Colonist wrote that Phase 1 of a Chinese owned shellfish hatchery facility in British Columbia is nearing completion and will cover over 34,000 square meters (365,000 square feet). By comparison, the Nisbet (Goose Point) hatchery facility moved from Willapa Bay to Hawaii is 20,000 square feet. Another perspective is seen in the image above, showing Taylor Shellfish's Quilcene Dabob Bay hatchery facility. Overlying the Taylor Shellfish facility in red is the estimated size of Phase 1. The Vancouver Sun has reported that Phase 2 is expected to result in a facility able to grow and export mature shellfish by the year 2020. Last year, Hatchery International reported that Hummingbird facility was approved to expand within a 27 hectare (~66 acre) area, outlined in blue and orange, an area dwarfing current facilities.

This Christmas, be careful what you ask for. You may just get it.

The shellfish industry for years has been lobbying at the federal, state and local levels to minimize regulatory oversight. Their success has been seen in many areas, ranging from minimizing eelgrass protection to convincing Mason County that tidelands sold under the "Bush Act" should be considered as existing shellfish farms. All aimed at allowing for an increased expansion of operations, then supply, and hoped for profits. That the Chinese business leaders were not born yesterday and can see a market controlled by only a few, for the benefit of those few, has resulted in a multi-million dollar investment by one company in Canada. Others will follow. Those shellfish grown will not be for Canada, but exported. When combined with expansion efforts in the US, a deflating commodity balloon may be what comes for Christmas.