Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 17, 1991 TAG: 9102140049
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: MARTINSVILLE LENGTH: Long
Martin is president of Blue Ridge Fisheries, which opened a $9 million factory farm for catfish in the Martinsville industrial park in late 1989.
His plan, along with partners, was to harvest 100,000 pounds of catfish a week. The live "catch" would dress out to 50,000 pounds of fish filets, which would be sold in East Coast markets.
"We've never considered sales to be a problem," said Martin, who laid off 30 employees last month until the company beats a disease that's been killing its fish. "There's a big demand for fish," he said.
But Blue Ridge never reached its full capacity before it closed down processing operations.
It was handling 25,000 pounds a week before disease stopped production in mid-January. Production workers will be off from three to four months while the problem is attacked.
Before the shutdown, the company was selling fish to customers from North Carolina to Boston and west to Detroit, Chicago and Milwaukee, Martin said. The response from customers has been overwhelming, he said. "They want us to get back as soon as possible."
Martin is 90 percent sure that he has the disease whipped in a test tank of fish. He's looking now for about $3 million in additional financing to install the equipment that would remove the disease threat from the company's 41 remaining giant concrete tanks and get the farm up and running again.
The disorder, enteric septicemia of catfish - commonly known as ESC, was not expected to be a problem when the fish factory opened. But it showed up in fish about 12 months ago, not long after Virginia Tech President James McComas helped the company celebrate its open house.
The disease has been killing over 50 percent of Blue Ridge's fish. "Once it starts its very difficult to control," Martin said.
ESC is a bacterial affliction that is sometimes called "hole-in-the-head disease." It causes the fish's stomach to swell, bleeding into tissues throughout its body, and a hole-like depression in this fish's forehead.
The disease, like other diseases of North American freshwater fish, is not a threat to humans who eat them. But it kills the fish or discolors their meat, preventing Blue Ridge from processing them.
The suspected cause of ESC in Blue Ridge's case is an high buildup of nitrogen in the fish tanks. Nitrogen is thought to have weakened the fish and allowed the bacteria to take hold.
The high nitrogen levels have been linked to pumps that are used to mix pure oxygen with the water. Nitrogen, which is the predominant gas in the earth's atmosphere, is unintentionally being picked up by the pumps and mixed with the water, Martin said.
Martin hopes that switching to a different type of pump will cure the problem. Results on the one test tank look promising. But to replace all the pumps the company needs to raise $200,000. The rest of the additional capital Martin is seeking would be used to replace fish and get operations back under way.
"If we did not believe we could succeed, the proper thing for us to do would be to shut down," Martin said.
But Blue Ridge will continue as a healthy company, he predicted.
Its 20-plus stockholders are mostly from the Martinsville area. A.L. Philpott, speaker of the Virginia House of Delegates, is known to be one, but Martin will not release the names of others.
The officers of the company besides Martin are William Martin Sr., secretary-treasurer; William F. Stone Jr., an attorney, assistant secretary; and E.C. Jordan, a bank loan officer, assistant treasurer.
The company's directors include Martin Jr.; Stone; Philpott; Frank M. Lacy Jr., a private investor; Bill Brammer, a furniture company executive; and Horace Fralin, a Roanoke developer. Lacy is chairman of the board.
The company's stockholders have stood behind the company, Martin said. "We're very fortunate we've had some very patient stockholders," he said.
Nevertheless, Martin said Blue Ridge, a closely held private company, probably will seek a larger company to invest in the venture and provide the capital it needs to move forward.
Catfish farming is a new and not yet very big in Virginia.
Excluding the indoor production at Blue Ridge, roughly 75,000 pounds of catfish, a harvest worth $90,000, were taken from Virginia ponds and cages by 60 producers. Those statistics are for the period between September 1989 and August 1990, according to Robins Buck, a marketing specialist with the Virginia Department of Agriculture and Consumer Services. By comparison an estimated 360 million pounds were produced nationwide.
Both catfish and hybrid striped bass farming in the state are just three years old. It wasn't until recent years that the fish have been widely introduced to consumers.
An estimated 70,000 pounds of striped bass worth $175,000 were harvested by 17 producers for the year ending in August. Another 14 producers were raising bass that hadn't reached market size, Buck said.
In contrast trout have been farmed commercially in the state for the past 50 years. Twenty-three trout farmers raised 860,000 pounds of trout last year worth $1.7 million.
Blue Ridge's aim is to reduce the price of fish until it becomes competitive with poultry. The price of shrimp, for example, has come down because shrimp now is being farmed as well as caught in the wild, Martin said.
Blue Ridge enjoys an enormous cost advantage over catfish processors who have to buy fish from pond farmers, Martin said. The potential for an indoor fishing industry in the United States is staggering, he said.
Americans eat an average of 15.8 pounds of seafood per person annually. By comparison, in Japan that number is 140 pounds.
The National Fisheries Institute, a trade group, would like to raise U.S. consumption to 20 pounds per capita by the year 2000.
But consumption at that level is nearing the limits of the wild catch, Martin said.
If U.S. fish consumption is going to grow, the country cannot depend on catching fish in the wild, Martin said. The future of the fishing industry lies instead in closed systems such as his, he said.
Martin is a 42-year-old Martinsville native. A former newspaperman and real estate salesman, he was introduced to catfish farming while he was living in Arkansas.
He and a friend from Arkansas, Joey English, began researching methods of fish farming. English now is Blue Ridge's operations manager. Their efforts led them to George Libey, who was working at Purdue University on a system of raising fish in recirculated water.
Martin was attracted to Libey's idea of raising fish in a totally controlled environment. Martin believes raising fish indoors, rather than in outdoor ponds, is more efficient and can provide better quality fish. Martin said a pond farmer would need 1,000 acres of water, 5 feet deep to raise as many fish as he can in indoor tanks.
Blue Ridge, which is in the industrial park on U.S. 220 south of Martinsville, looks like any other factory in the park with its 2-acre site and metal-sided building.
Each of Blue Ridge's 42 tanks has its own water purification system, meaning the 60,000 gallons of water in each tank is recycled twice every hour. It's during this recycling process, when oxygen is added, that the nitrogen problem developed.
Each of the company's fish tanks has its own biological purification system that removes ammonia from the tank and a computerized monitor for water temperature and oxygen content. The big room containing the tanks is kept at 85 degrees because the indoor air heats the water. Light in the room is kept very low to curb the growth of algae.
A catfish takes six months to grow from a fingerling to a harvestable 1\ pounds. Fish taken from the tanks pass on a conveyor belt into the processing room. There each fish yields two 5-ounce filets, which are packed in ice for transport. The company has the ability to mechanically process 40 filets a minute.
Blue Ridge is trolling new waters in the fishing industry.
"We can't pick up the phone and call down the road [to another fish grower] and ask `what are you all doing about this problem,' " Martin said.
Research and development is the basis of what Blue Ridge is all about, Martin said. So it probably shouldn't be surprising that the company hits some snags as it begins its journey. "Hopefully, this will be our last interruption," he said of the company's struggle with disease.
Libey, whose recirculating system provided a model for Blue Ridge, is now an associate professor of aquaculture at Virginia Tech. Because indoor fish farming is so new, it's hard to say yet how big a problem Blue Ridge has, Libey said.
"It's kind of hard to guess where you're going to go with this until you've been there . . . I'm sure Wilbur and Orville [Wright], the first time they took off, didn't fly all the way to Paris either," Libey said of the pioneer aviators.
Meanwhile, at Virginia Tech, Libey has been experimenting with raising a different species of fish - striped bass - and hasn't encountered any problems with disease. Dan Taylor, an agricultural economist at Tech, has said he feels striped bass have a better potential market than catfish, whose market is getting crowded with producers.
Martin acknowledges that he may have to change species of fish, although he would like to continue with catfish. One advantage of the indoor system is that changing types of fish would be relatively easy.
The company currently has one tank filled with striped bass as an experiment, and they are doing well. Martin is also thinking about raising Tilapia, a disease-resistant fish native to Egypt's Nile River. Tilapia, he says, will be the fast-food fish of the future.
Other varieties of fish, Martin has considered include sturgeon, yellow perch and eels. He also believes the indoor farming method can be used to raise tropical fish for the pet market.
by CNB