Can Oceanus’s Digital Farming Ambitions Lift Investor Confidence?
Oceanus CEO Peter Koh says the company will continue to look out for investments
AFTER swinging back to the black in FY2020, Oceanus Group is looking to “tech up” its business model and diversify its products and operations further.
With a clean balance sheet and a source of steady revenue, group chief executive Peter Koh now expects the company to invest more in new farming technologies that will make the business more efficient and deliver better returns of shareholders.
In September last year, Oceanus invested an undisclosed amount in a newly formed deep-tech company called Universal Aquaculture. The latter has established in indoor prawn breeding facility in Tuas that will produce its first harvest in June.
The farm will reportedly be able to produce 150 to 200 kilograms of vannamei prawns a day for a start, but can produce some, 1,000 kilograms of these prawn daily when an additional site is opened in the third quarter of next year.
In November 2020, Oceanus announced an agreement with Hainan Raffles Group to set up a foodtech hub in Hainan, China.
The hub will produce some 200 tonnes of shrimp for the first year of production with the aim of hitting 1,000 tonnes of shrimp in the following years.
While these farms are likely to have higher operating costs compared to traditional farms, Mr Koh said Oceanus will be able to save on logistic costs such as trucking or freight – incurred when farms transport their goods to China’s financial districts or city areas.
In adddition, Oceanus can also charge a higher price for fresh products compared to frozen ones. Mr Koh said this will help narrow the cost difference between operating a vertical farm and a traditional one.
Mr Koh’s moves have attracted the attention of the market.
This year, shares of Oceanus rose as high as 7.6 Singapore cent on Feb 22 – briefly giving the company a market value of S$1.85 billion.
They have since fallen significantly, however, and were down 30.3 per cant on Wednesday to close at 2.3 Singapore cent. Oceanus was the most heavily traded counter on the Singapore Exchange on Wednesday by a long way, with 1.17 billion shares changing hands. Oceanus is now valued at S$558.8 million, or 88.6 times its earnings of S$8.6 million for FY2020.