Feeding The World
By Renuka Sena December 19, 2016
- Idea behind Aquagrow arose when Mohamed Razali Mohamed, returned to Malaysia after spending 15 years in Australia
- Know the business well before starting, thoroughly research and do a proof of concept before embarking on commercial effort
Big dreams are the driving force behind a successful business, and at Aquagrow Corporation Sdn. Bhd., the dream couldn't be bigger: feed the world, while reducing demand on our oceans. For this Malaysian aquaculture company, it's all about supplying high-quality marine fish grown in pristine oceans to high-end seafood restaurants and hotel chains around the world. The best part of all this is that they are determined to do so, sustainably.
According to WWF Malaysia, fisheries in both the South China Sea and the Melaka Straits are already 78% exploited and a collapse is expected by the year 2030. Realising the growing global demand for fish, and the pressing need for sustainable fish supplies, Aquagrow has stepped in to help solve one of the most critical issues of our time — global food shortage.
The start of a dream
The idea behind Aquagrow arose many years ago, when the company's Chief Executive Officer, Mohamed Razali Mohamed, returned to Malaysia after spending 15 years in Australia. In 2000, an old friend had invited him to invest in a South Australian fish farm and hatchery that produced and supplied barramundi fish fry to local Australian farms. Razali, a specialist in remote sensing and geographical information systems, was running an IT company at the time.
Since business was going well, he decided to invest in the venture though he knew nothing about fish farming. Five years later, they were forced to shut down operations, having discovered that although aquaculture is a huge business, Australia wasn't the best place for fish farming. Rather than throw in the towel, in 2006, Razali founded his own Malaysia-based aquaculture company with his wife Marziana Md Zain and old friend Andrew Richard Gryta. While they were excited with their new venture the first few years proved to be difficult.
At the time, they still knew very little about fish farming and found large-scale aquaculture to be capital intensive, particularly due to the need for land, buildings and infrastructure. In addition, tight cash flow added to their stress and a few times along their entrepreneurial journey, they felt like giving up. Once, they were even tempted with an offer from a Private Equity fund from the United States, and for a while, they felt like they should sell out. Instead, they took a bold move to raise more funds, which helped them to increase farm production and sales.
Passion pays off
In the end, their passion and dedication saved the day. In their farms, located in popular holiday hotspots Pulau Langkawi and Pulau Perhentian, they practice offshore mariculture, which has set them apart from other Malaysian fish farms. As their farms are located 20 kilometers in the open ocean, where the waters are pristine, free of pollution and have 100% salinity, Aquagrow is able to farm high-quality grouper, snapper and barramundi, which has earned them widespread recognition.
This has helped them secure major export contracts to Australia and develop key partners throughout the value chain. While the end game is always the bottom line, at Aquagrow, they simply love being out on the farms. As he watches the fish grow and be harvested for export, and catches a glimpse of the looks of amazement on visitors' faces, Razali knows that all that hard work has paid off.
"The feeling is priceless," says Razali (pic right).
While they have now charted success, winning the Malaysian Biotechnology Corporation’s Emerging Entrepreneur Award in 2015 and being officially recognised by the Ministry of Science, Technology and Innovation as a BioEconomy Transformation Program project, Aquagrow continues to face challenges.
Their biggest challenge so far has been to build a strong, experienced team and raise the necessary funds to keep the business going. Malaysia is not an aquaculture nation, and there is a lack of local expertise. To overcome this shortage, Aquagrow hired foreign nationals from 6 different countries to fill 12 managerial positions, and Malaysian graduates for succession planning.
In the next year, Aquagrow plans to be fully integrated, as they will acquire a processing plant that will increase their production to 500 tonnes per annum. Within 5 years, their goal is to become Malaysia's largest producer of farmed marine fish. Aquagrow anticipates that 2019 will be their breakout year, with production reaching 4,000 tonnes, which is their key benchmark. By 2020, their vision is to be a public listed entity and ASEAN's largest producer of sustainable marine fish. Taking pride and satisfaction in helping to feed the world with their quality fish, Aquaculture is poised to become pioneers in transforming the aquaculture industry in Malaysia.
Although they now have 15 years of experience under their belt, the Aquagrow team is determined to continue learning, so that they can continue to improve and expand their horizons. This was one of the reasons why they took part in the Coach and Grow Programme (CGP). Through the programme, they learned that there is a method to the ‘madness’ of entrepreneurship. While they had previously relied on experience and gut feeling, the CGP gave them a clear, effective formula on a variety of important issues including how to source for leads, how to funnel those leads, revenue models that work best for their business and so much more.
The CGP programme also helped Razali in the company's overseas expansion plans. It certainly has played a key role in helping the company to be one step closer in achieving its vision of becoming the region's largest producer of sustainable marine fish from aquaculture and fisheries by 2020.
Razali also learns by emulating the person he looks up to the most in the business world - Sheikh Suleyman Al-Rajhi – the Founder of Al-Rajhi Bank and the owner of the biggest fish farm in the world - the National Aquaculture Group, at Al-Lith, Saudi Arabia. Besides being a highly successful businessman, Sheikh Suleyman is also renowned for his religious piety and his generosity towards charitable causes.
A dream fulfilled
Though a series of circumstances have led him to lead the entrepreneurial life, Razali says he has no desire to give it up, even if he was offered a ‘dream job.’ He notes, his hunger to become an entrepreneur, is what drives him forward.
His advice to aspiring entrepreneurs is, “Know your business well before you start. Research, research, research and do a proof of concept before you go out on a commercial scale.” He reminds new entrepreneurs that a business must also make money. “Never give up if it is something that you love doing but your business must also make money. If it does not, don’t be a romantic fool. Find something else that you love doing that can make money."
The above is an excerpt from the book Startups to Scaleups published in October 2015 by Cradle Fund and Proficeo Consultants, the programme manager for Cradle’s Coach and Grow Programme. DNA will be featuring every entrepreneurial story from the book in a special commercial arrangement.