Date: 31/07/2013

Farming Sea Cucumbers in Malagasy Villages

Blue Ventures’ project builds on research by the Universities of Belgium and Mons, in a partnership with the Malagasy University of Toliara’s Institute of Fisheries and Marine Science, which have developed a patented method of sea cucumber hatchery reproduction.

In 2009, these universities worked with a couple of local Malagasy entrepreneurs to develop a pilot sea cucumber-production business named Madagascar Holothurie SA (MHSA).

To increase the social impact of their business model and increase production capability, MHSA partnered with Blue Ventures, which identifies suitable farming locations and trains coastal Malagasy communities to raise sea cucumber juveniles from MHSA’s hatchery.  Based on the success of the model and the potential for positive social and environmental impact, MHSA’s entrepreneurs secured funding from a French venture capital fund Investisseurs & Partenaires (I&P) and the Netherlands’ Private Sector Investment program—in addition to bank loans and personal capital—to launch a larger commercial sea-cucumber farming venture named Indian Ocean Trepang (IOT).

Demand for sea cucumbers in Asia, where the delicacy is believed to have medicinal qualities, means the product can retail for hundreds, even thousands of dollars per kilogram. I&P was also attracted by the 150 jobs the new business will create in the Malagasy factory headquarters alone—not including the jobs created in the local villages Blue Ventures works with, said Elodie Nocquet, an I&P Financial and Environmental Social and Governance officer. She added that IOT’s business plan does not tax existing environmental resources and even contributes to the repopulation of sea cucumbers in the wild.

I&P is taking a long view with its combined equity-loan investment of €600,000 (just under $800,000) of the €2 Million (approximately $2.66 Million) project. The fund plans to sell their equity to the Malagasy entrepreneurs after a flexible term of investment. The exit is anticipated to be between 2017 and 2019, depending on the business’ progress.

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