Barramundi Group, which operates the biggest barramundi or sea bass farms in Singapore and Australia, could have gone for an IPO on the Singapore Exchange (SGX).
But a listing here may not be the most ideal platform for its growth ahead. Hence, the Singapore-incorporated company chose to undertake the IPO on Oslo Stock Exchange (OSE), particularly the Euronext Growth Oslo.
On Aug 12, the stock made its debut at NOK14.75 ($2.29), marginally higher than its IPO price of NOK14.70. It closed at NOK14.70 on Sept 6, giving it a market cap of NOK593.4 million.
Barramundi Group raised about NOK130.8 million from the private placement prior to listing. Of this, NOK119.1 million is from the issuance of new shares. The proceeds will be used for the company’s growth plans ahead.
Andreas von Scholten, CEO of Barramundi Group, admits that the company had considered a listing on SGX, and even on the London Stock Exchange and Australian Securities Exchange. But in the end, the company settled for Oslo because the market there was more conducive for its growth.
For one thing, a Norway-listing would provide better visibility for Barramundi Group to market its products in Europe. von Scholten notes that the company’s Kühlbarra and Fassler brands are already well known in Asia and the US whereas Europe is the “last frontier”, he says.
“So, we kind of thought it would be good to use the listing in Europe to create more awareness, more exposure of our company, to really highlight that that is one of the places that we are looking to grow into in the future,” von Scholten tells The Edge Singapore in a recent interview.
Secondly, the Norwegian exchange is a top listing destination for aquaculture companies, just like how Nasdaq is for technology companies and SGX is for REITs. According to von Scholten, 80% of the world’s aquaculture companies are listed in Oslo.
“Because of that, a lot of the investors know about the space. And we’ve seen, it’s not just mature companies listing, it’s also growing companies like ours that are really becoming big companies,” he says.
And with that, the profile of investors in Oslo can also fetch a better valuation for Barramundi Group given the company’s loss-making status. For 1HFY2021 ended June 30, the company registered a net loss of $6.4 million on the back of $17.1 million in revenue. The 1H loss accounted for 73% of its FY2020 loss of $8.8 million.
According to von Scholten, Singapore investors tend to perceive companies that are loss-making as non-attractive investments. “But in Norway, it’s very normal because it’s all about investment into the future. We have [received] very little [queries] on why we are not profitable. Because that is the case for most of the new companies that have arrived in Norway,” he says.
That said, Barramundi Group has some notable Singapore investors following the IPO. Temasek Life Sciences Laboratory (TLSL) is the fifth-largest shareholder with a 5.1% stake in the company. TLSL is a beneficiary of Temasek Trust. It is affiliated with the National University of Singapore and the Nanyang Technological University.
Then, there is Far East Ventures, which owns a 4.9% stake in the company, making it the sixth-largest shareholder. Fast East Ventures is the venture capital arm of property developer Far East Organization.
Southern Capital Management is the seventh-largest shareholder with a 4.8% stake in the company. Southern Capital Management is a private equity firm with offices in Singapore and Kuala Lumpur.
Barramundi Group’s top shareholder is Warif Holdings with a 10.8% stake in the company. Warif is an entity owned by the Bruneian government.
‘Salmon of the tropics’
No doubt, Barramundi Group’s Oslo listing is a loss for the local stock market. Had it been listed here, Barramundi Group would be the second listed fish farm company apart from ornamental fish breeder and seller Qian Hu Corp.
Still, Barramundi Group could eventually undertake a dual listing on SGX. von Scholten explains that OSE and SGX have an agreement that allows companies listed on the Mainboard of either exchange to easily pursue a second listing on the other. Of course, the company would have to transition to the Mainboard of OSE first, before initiating the dual listing.
“At that point, when you’re on the Mainboard, that is when the dual listing is applicable,” he says. “I would say it might not be too long before we could look at that.”
For now, von Scholten says Barramundi Group is focused on growth ahead. The company plans to increase its annual production of fish to 7,000 tonnes by 2026 from 2,000 tonnes currently.
The higher production will be driven by a new fish farm recently established in Brunei. von Scholten says it will take two years of gestation before the fish are ready to be sold. The expansion of the existing farms in Singapore and Australia should also help increase production. Beyond that, the company is looking to add a fourth fish farm that could likely be in Southeast Asia.
When asked how soon Barramundi Group can achieve profitability, von Scholten believes the company’s Singapore operations will be in the black first, followed by its Australian operations. “We’re investing millions and millions of dollars in something that will pay off five years from now,” he says.
Irrespective of when the company achieves profitability, von Scholten believes the prospects are bright for Barramundi. He believes the scaly, premium white fish – a native of Australia – has the potential to become the “salmon of the tropics”. As the global population continues to increase in tandem with a growing middle-income segment, there is going to be an exponential demand for protein, he says. This is especially the case for Asia.
“A lot of that growth in the middle class will come from Asia and that puts us really in the epicentre of that expected growth,” says von Scholten. “I mean, this is the Asia century, right? So, this is already happening, but will be further accelerated in the future.”
In addition, von Scholten believes Barramundi tastes better than other species of fish. “There are some other fish that are not really high in quality and can taste muddy,” he says. “But Barramundi grown in the sea has a really nice taste.”
Barramundi Group currently supplies its products to over 1,600 restaurants, hotels, retailers and others across Southeast Asia, North Asia, Australia and the US. In Singapore, these include Marina Bay Sands, Singapore Airlines and Thomson Medical. The company’s products can also be found in NTUC FairPrice outlets under the brands Fassler and Kühlbarra.
‘They vaccinate fish?’
Barramundi Group was founded in 2008 by two former executives of Mowi, formerly known as Marine Harvest, the world’s largest producer of salmon. One of them was Johannes den Bieman, who is now chairman of Barramundi Group.
According to von Scholten, the decision to establish Barramundi Group here was largely driven by the strong support provided by Singapore. He says he was surprised at how the Singapore government had been thinking seriously about food security even before the Singapore Food Agency had targeted the city-state to produce 30% of its own food supply by 2030 under the 30 by 30 goal. “Attracting these kinds of companies to Singapore was deemed very important,” he says.
As for von Scholten, he had worked in multiple industries before joining Barramundi Group. Originally from Denmark, von Scholten moved to Asia 12 years ago. He was an M&A consultant at Deloitte for more than seven years. In 2010, he joined medical equipment supplier Coloplast, holding various leadership roles in Beijing, Shanghai and Hong Kong during his time there.
In 2015, von Scholten joined animal vaccine producer Pharmaq, which had been acquired by private equity firm Permira. von Scholten says he made the career switch after discovering how lucrative the animal vaccine market was, especially for fish.
“In Hong Kong, I was called up by this lady who worked with a private equity firm that said I should join [Pharmaq since it] was doing vaccines for fish. And my first reaction was: they vaccinate fish? I didn’t know that was a thing,” he says.
“But then she told me: ‘[Pharmaq is] a world leader in vaccines for fish, but predominantly salmon. Asia has 90% of the world’s aquaculture production, but 0% is vaccinated. That’s your opportunity.’ So, I said this was something very exciting and I joined the company,” he adds.
While at Pharmaq, von Scholten came across Uvaxx, a wholly-owned subsidiary of Barramundi Group. Uvaxx develops and supplies proprietary autogenous vaccines for Barramundi Group and third-party farm operators. It has created seven proprietary vaccines and has been granted an additional 13 active licences of vaccines for use.
One thing led to another, and he was subsequently offered a job at Barramundi Group, says von Scholten. The company, he adds, was in line with his values and he saw tremendous potential in it. “And so when I met the top leadership of Barramundi Group and discovered their vision, I said: ‘Yes, I’ll be happy to lead the company’,” he says.
Photo: Albert Chua/The Edge Singapore
