Q&A with Jim Wyban
Scientist-entrepreneur weighs in on the future of shrimp culture
By Mari-Len De Guzman
Jim Wyban helped develop the game-changing specific pathogen-free (SPF) shrimp, which put Hawaii on the global aquaculture map and changed the trajectory of shrimp farming across the globe. His former company, High Health Aquaculture, pioneered the commercialization of SPF shrimp broodstock and helped build a $30-million-a-year Hawaiian SPF broodstock industry in the 1990s. Wyban has since sold High Health Aquaculture, and is currently doing consulting work on breeding and hatchery for shrimp and other marine species.
Hatchery International caught up with Wyban at the 2020 Aquaculture America conference in Honolulu, where he was a plenary speaker.
Hatchery International: Tell us how you got started in the industry and what attracted you to shrimp?
Jim Wyban: I got a PhD from the University of Hawaii in Fish Genetics and was interested in going into aquaculture. First thing out of the university, we leased a Hawaiian fish pond on the North Shore of this island of Oahu and operated it as a commercial fish farm – mullet, tilapia, milkfish, Samoan crab. But I grew interested in, and done a lot of reading about, the shrimp farming industry that was just developing at that time. So, I dug us a pond there at Lokoea earthen pond, got PLs from this hatchery down the road, stocked them, and grew my first crop of shrimp there. When I took those to the market my customers freaked out, they loved it. They were throwing money at me, it was incredible.
That day after we sold out the crop, I told Carol, my wife, I want to work in shrimp because I’ve seen the customer reaction, the demand and the reaction. So, I had come to that decision personally that I want to work in shrimp, and then just amazingly about two weeks later OI (Oceanic Institute) calls me up. They had just received this big grant from USDA to work on shrimp. They recruited me to be the principal investigator of that program. It was just an amazing convergence or coincidence – that I had just decided I wanted to work on shrimp and then I get offered this incredible job to run this huge research program on shrimp. And the rest is history.
That research at OI led to the development of specific pathogen-free (SPF) shrimp. How has the SPF shrimp changed the trajectory of your career?
JW: It’s incredible. I was a researcher at Oceanic Institute for eight years and that’s where we developed these SPF stock. But in my blood, I’m an entrepreneur. And so, when I saw the results of our first year’s production using the SPF shrimp, and the industry doubled production, I just felt like this is a huge commercial opportunity. I tried to convince my boss that we should start a business, they weren’t interested. They said, No. ‘Ok, well I’m going to go do it then.’ So I quit my job and jumped into the commercial industry. And that was like jumping on a wild horse. It was just crazy, crazy for the next 20 years.
And in the end, I sold my company to a company called SIS which is a subsidiary of CP, which is one of the biggest shrimp farming company in the world. It’s a great story and it’s a great ride, and it ended nicely too with an exit, which is what every entrepreneur dreams of: you build a company and then sell it. And I did that.
You’re both a researcher and an entrepreneur – two traits that don’t often go together. Where did your entrepreneurial spirit come from?
JW: Back in the day kids would deliver newspapers. I had my first paper route when I was nine years old. And I just always liked having my own money. I didn’t really want an allowance, which was my dad’s money. I wanted to earn my own money. So, I was always interested in business and how people made money. But I have kind of a precocious mind so I loved being a researcher, too. I like both sides and that has worked really well for me because even when I had my commercial company, I was pretty successful raising money through SBIR programs, which are federally-sponsored research grants to commercial companies. That’s Small Business Innovative Research. And it’s real competitive but if you got good ideas, it’s a way of raising money and it’s like equity-free money – that is, you don’t have to give up shares from your company or anything. It’s a grant from the government. We always used it on stuff that was going to create new products or help our business become more valuable, so it was a great opportunity for me. Having been a researcher, I knew how to write a good grant proposal and how to conduct science and do good experiments. So that helped me in that way. I had over a million dollars in grants that were kind of equity-free investments. [The government was] in essence investing in my company but I didn’t have to give up any equity, which was a win-win.
And now you have a consulting company. Tell us about that.
JW: Marine Genetics is my consulting business and I don’t have a production facility. It’s all just information transfer. I always say that I could do hatchery and breeding of other animals as my expertise, but I have not made any money on anything else. I’ve made money in shrimp so that’s my first loyalty.
What’s the next big thing in shrimp genetics development?
JW: The next big thing that’s happening right now is the incorporation of DNA technology into the breeding activity. All these companies that are breeding shrimp are using the DNA tools to make their breeding systems more efficient and more sophisticated. And it’s just happening now. Shrimp has some problems in terms of the DNA systems. It’s pretty complicated. They only finally got a high-density sequence of the DNA genome like about a year ago. It was the first publication when the human genome was done back in the 90s. Shrimp lagged way behind and it was because there are some technical issues in the shrimp genome, it’s just the way it’s built that made it problematic on sequencing and stuff. But now that that’s done and there’s all these tools to do the DNA technology, those are being applied right now by these shrimp breeding companies, and it’s really, really exciting because it can go faster. It’s more efficient. They can do some really cool stuff with it.
Pathogen-free shrimp was sort of the foundation. You want to start with these pathogen-free animals and then breed them for better performance in the farms.
The shrimp industry has been challenged by diseases, despite the development of SPF shrimp. How is this affecting the progress of this industry?
JW: Oh, there are and there are diseases that just keep popping up. There’s a new disease every year, at least, that are cropping up and causing problems. There’s always, between these diseases and pathogen-free, constraints on the industry. Right now, very interesting is that there is a disease that’s heavily impacting the industry and it’s not even a shrimp disease. It’s coronavirus.
The Chinese market for shrimp has kind of collapsed and they are the biggest importer, second to the United States, in importing shrimp and because all the restaurants and everything are closed, there’s no market for the shrimp. And that’s disrupting a lot of supply chains. Where that coronavirus situation is going nobody knows. It’s impacting a lot of stuff – the automotive industry supply chain, the computer supply chain, the tourism. In Hawaii we used to have a direct flight from Shanghai to Honolulu, those flights have been stopped. And basically, there are no more direct flights from China into Hawaii. The Hawaii tourist industry was getting significant Chinese visitors and that’s kind of being put on hold.
The shrimp industry in particular is being heavily impacted by the coronavirus right now and we don’t even know where it’s going and what’s going to happen.*
Hawaii is known as the birthplace of SPF shrimp, but competition in this market has tightened as more producers from other countries increase, leading to declining Hawaiian export for SPF shrimp. How can the state bounce back and regain its leadership?
JW: That’s a big problem. The companies need to get their breeding game on really seriously and create animals that outperform. That’s what’s going to determine market opportunity. It’s how well the animals perform. And out in the industry, word spreads very fast. If somebody has a new result that’s great, say somebody in Hawaii develops a new strain of shrimp that did really well in China, wow it would spread like wildfire. So that’s what they need to do and there’s ways that they may be able to pursue that but basically they’ve got to up their game in terms of animal performance, and that’s good for the industry. The industry benefits.
It’s a very competitive industry, you can’t cruise on your past success, you’ve got to be constantly improving. You have to get better and better. And in shrimp breeding that means better performance in the farms because that is where the final use is. How did the farmers do? Did they make money? And if they make money, it goes all the way back up the chain.
At this point in your career, is there anything else you’d like to venture into or project you’d like to work on?
JW: I do some consulting with a couple of companies, and I enjoy doing that. I still have a fantasy of designing and developing an integrated shrimp company somewhere and I think that would be super cool. Because I kind of have a good view of the whole industry and how it works and where the critical control points are, I’ve had that fantasy for a while. You know, when I build my shrimp company of course as a breeding company you have to do everything – you have hatchery, and grow-out and broodstock, shipping and everything. I’ve done every stage of shrimp production, but the one thing that I have not done to my satisfaction is design a whole shrimp company from the ground up – the breeding, the hatchery and the grow-out and the processing – the whole package. I think that would be an interesting challenge.
Any thoughts about growing shrimp on recirculating aquaculture systems?
JW: The RAS is sort of the new technology that people are very excited about. The challenge will be the economics of it – because there’s a lot of capital costs, and so forth. Whether somebody can unlock that economic equation and get shrimp production cash flow positive in a RAS has not yet been done. There’s lots of small-scale shrimp farmers in the United States – the Midwest [for example] – and they’re doing maybe 1,000 lbs or 10,000 lbs of shrimp, and selling it at $10 or $12 per lb in their local community. That’s not really going to put a dent in any kind of national marketplace. We consume billions of pounds of shrimp every year. Whether somebody unlocks that code of doing that cost-effectively and making a profit – it’s a big challenge. I’m not sure that anybody has unlocked that yet. However, I will say there’s a bunch of projects that are doing things like that, and I work with this one company in Florida, American Penaeid, and they’re growing shrimp in greenhouse systems that are pretty high-density and they’re a successful commercial company. They do about a million pounds a year. So it can be done, and they have big expansion plans.
The big company CP has now invested in an operation in Florida that they intend to build up. They’ve been working on this super intensive kind of culture back in Thailand, where they are based, and I think when they bought that land in Florida they must be convinced that they can do it; near to the market and all that.
That, in the long run, will be the ideal case. That U.S. shrimp market will be supplied by ‘grown in America’ shrimp. I think you will see a tremendous boost in demand for shrimp because we all in the U.S. keep hearing about, ‘Oh, this shrimp from foreign producers are contaminated, they’re injecting them with stuff and they soak them in chemicals.’ There’s a lot of that perceived negative to imported shrimp. So if somebody could start an intensive farm in the United States that had positive economics, they would have a huge opportunity because I think Americans love to eat shrimp, and they would love to eat a ‘grown in America’ certified, contaminate-free. The market opportunity for that is quite huge. That would be the holy grail. But to date, no one has quite unlocked that. That’s a challenge still.
*(Editor’s note: Since the interview with Jim Wyban, the World Health Organization has declared the novel coronavirus, or Covid-19, a global pandemic.)