This project answers all the criteria for the development of a new species of aquaculture (according to FRDC strategic plan, namely:
1) Market driven. There is strong and increasing demand for octopus products, both in Australia and overseas. Demand far outstrips the supply.
2) Being driven by industry with significant existing investment. Fremantle Octopus has already invested over $2 million in R&D and is currently the biggest octopus fishing company in Australia. Occoculture has been specifically established to develop an octopus aquaculture facility and is in the process of raising private equity to assist in funding of the project. Both companies are an integral part of this project.
3) The cost of production will be less than the farm gate price. In the Mediterranean, raw octopus has been selling at up to AU$70/kg in the 2007/08 season. This compares with a current price of AU$11/kg for local stocks. A conservative cost analysis of production is $9/kg. On a value-added basis, wholesale sales in Australia can achieve $40/kg (retailing at $50 to $55/kg) with a 60% gross profit margin. In the European marketplaces, value-added products may achieve up to $100/kg, giving a gross profit margin of 82%.
4) The species is endemic to Australia and builds on an established high value wild caught market with high export potential.
5) There exists the planning framework and access to resources to allow for the timely and orderly development of the project. The two staged R&D plan (i.e. ranching optimization and hatchery techniques development) will ensure immediate implementation of the project outcomes.
Octopus aquaculture is gaining strong interest in SA and Victoria. It is envisaged that the technology developed through this project will be transferable to other ventures in these states.