Singapore venture bucks chilli crab convention
Avelyn Ng Today Online 1 Dec 11;
SINGAPORE - In the land where consuming a meal of chilli crab tops the must-do list for many visitors, one company wants to put lobster on the menu instead. Better known as a Western luxury, lobsters are now grown and farmed in crab-hungry Singapore.
LOBS Harvest, a farm set up at Pulau Ubin early last year, recently clinched S$400,000 in a dollar-for-dollar investment by the SPRING Startup Enterprise Development Scheme (SPRING SEEDS), and Shinagawa LASIK, a private LASIK eye surgery clinic with links to Japan.
It is the brainchild of Mr Seah Yew Chai (picture), who has a background in marine science under the Agri-Food & Veterinary Authority of Singapore, and Mr Foo Wei Young, who has experience in shipping at PSA.
Far from just another fish farm, the pair set out to develop a sustainable and challenging business. "We decided on lobsters since it is the hardest to grow and it is less of a commodity. We wanted to be sustainable so we buy in baby lobsters which other farmers do not want and grow them to maturity," said Mr Seah.
Roadblocks
Harvesting lobsters brings lucrative margins, but the mortality rate is high. The baby lobsters are brought in as small as one inch in length. One of the biggest challenges for LOBS Harvest is keeping them alive. According to Mr Foo, 30 to 40 per cent of the baby lobsters are dead on arrival, after being transported from suppliers in Malaysia and Indonesia.
Another hurdle is widening the acceptance of consuming lobsters by the public. "I feel the challenge lies in the low consumption in Singapore. Many Singaporeans still think of lobsters as a Western food and most go for crabs instead. What we are doing right now is trying to open up a market from scratch," said Mr Foo.
According to Mr Seah, about S$700 million worth of lobsters are consumed in Singapore every year. Of that, live lobsters account for S$100 million and frozen goods take up the rest.
LOBS Harvest aims to tap at least 30 per cent of the "live" market which could bring S$30 million in revenue annually.
Exports
With the highest consumption in Europe and the largest suppliers in countries such as Australia, competition can be stifling.
"Lobster is a seasonal product and the supply may not always be there. Prices will also fluctuate due to external factors such as weather and economic conditions," said Mr Seah. "What differentiates us is that, through growing them, we ensure consistent supply throughout and we keep them at a fixed price," he explained.
He added that this reliability is the main reason the company is winning long-term orders from major Japanese restaurants.
LOBS' recent funding is a milestone towards a much loftier dream - to build a bridge between Europe and Australia.
Mr Foo, who specialises in transportation, sees Singapore as an ideal shipping hub located between the two continents. There are also plans to expand to Japan and China.
Plans ahead
LOBS is aiming to improve transportation to reduce the baby lobster mortality rate and is also in the midst of developing remote-sensoring technology to boost productivity. This is a surveillance tool able to detect variables such as change in water parameters and feeding behaviour.
The company has plans to sell the technology once it is perfected. In a business plan presented to SPRING SEEDS, the businessmen describe plans to have the prototype ready by early next year at the latest.
Depending on the company's progress, SPRING SEEDS may inject up to another S$800,000.
"We are friendly with the neighbouring farms and we help each other out. The competition is not here but elsewhere," said Mr Seah.
