Originally Posted by
BlackPeter
I see two possible outcomes of the open water farming:
1) They invest a lot of money (into permits, equipment and learning how to overcome teething problems) and at the end it works. NZK manages to act as trail blazer to open a new industry of open sea salmon farming. Competitors can follow (given that there is not really a moat) and achieve the same results cheaper and limiting NZK's margins. High investment, limited payback.
2) It doesn't work, the problems are not surmountable and NZK needs to write off its significant investment.
That's what I mean with significant risks and limited opportunities. If it works, sure there might be a huge opportunity for the salmon industry as a whole, but it was only NZK paying for the learning and blazing the trail. If it doesn't work, than its just NZK who paid for everybody.
Sure - nice somebody is doing this for the industry, but is this somebody a good company to invest in?