“Using insect protein for animal feed is groundbreaking”

Bertil van Vugt
By on January 7, 2015

The first entrepreneur who has launched a fundraising campaign on our platform is Gilles Berholz of Co-Prot from Cambodia. We contacted Gilles to learn more about his company and to find out what he will use the investment for when it comes in. “We provide poor farmers a new source of income and waste management solution in one.”

Please introduce Co-Prot to us? Gilles Berholz

“The Co-Prot concept is established in 2013 and we started the pilot operation in January 2014. We grow insects as the Black Soldier Fly on organic waste material. We process the insects into high content protein powder that can replace other expensive and unsustainable protein powders as fish or poultry meal in animal feed.

Our production concept is low-cost, extensive, modular and scalable. This means we can quickly scale up and outsource larvae production, providing poor farmers a new source of income and waste management solution in one.”

Can you tell us a bit more about your background and how you got the idea to venture into the protein animal feed business and why you chose Cambodia to start?

“I have studied agricultural science and focused on agribusiness. After that I have worked in large companies selling and marketing fresh produce in Europe, and later in sales and business development for horticultural planting substrate in East Asia. I got the idea of insect protein by coincidence, as I read a discussion about sustainability of aquaculture.

The idea of insect protein is groundbreaking and addresses a real need in the market, so I decided to do something about it. The Black Soldier Fly is an animal that does best in tropical conditions, so a tropical country is a logical choice. Further Cambodia offers relative good personal safety, ease of doing business and affordable land and labor prices.”

Black_soldier_fly

The Black Soldier Fly. Source: Wikipedia

 Can you describe the business model you are working on?

“We operate in an environment where our products are most needed. It starts with sourcing the waste. We require organic waste that has to be sorted and in Cambodia there are many people living of the waste belt. We will purchase organic waste from them for fair prices and together with an external partner we make sure that the money we pay is used to increase their living standards, education and sanitation.

Our employees mostly belong to low-income groups and many of them were unemployed. They will get training and a decent salary. Our distributors also employ people from the base of the pyramid. Large part of our consumers are farmer that produce fish, chicken, pigs and ducks. The problem is that most of the meat and feed market is a cartel controlled by large feed companies, who also have their own farms and slaughterhouses. This creates a situation that independent farmers can not earn a living, because the feed price is high and meat price is low.

We give them real alternative to make their own feed and escape this situation. At a later stage we will franchise our production to local farmers and purchase the insect mass from them. This will provide them a new source of income and will increase their food security, and solve a waste problem as well.”

You are currently looking for funding, how will you use the investment when it comes in?

“The investment will be used to build a production and processing facility, establish a supply chain and a quality assurance system. When all goes well we will expand into 5 production locations spread near waste sources. In the pilot operation in Siem Reap, Cambodia, we developed a scalable and modular system of ‘Black Soldier Fly’ farming.

This means that we can scale our operation to commercial production. We have developed a breeding protocol and a bio-conversion and processing system. These days we produce samples that will be sent for analysis and to potential clients. As we scale up we will need about 15 people to work in our production unit and 4 people working on management level and sales.”

What are your main challenges of operating in the market where you are active? And how do you see the IBA community playing a role to support you?

“Most important of all, seed capital for agri-tech / clean-tech is virtually non-existent in Southeast Asia. That means that product development or any innovation is difficult to finance. It keeps innovation away and allow only established companies to grow while start-ups have no chance. Microfinance is catering for smaller amounts against high interest, the next available finance is growth capital which is inaccessible to start-ups or companies still without revenues. I hope that IBA community could change this situation.”

What are your plans for the future?

“After successfully running our first commercial plant our company plans to expand to be a leading insect protein supplier by opening new production locations and increase volumes. We also aim at integrating other insect growers that would like to join us in marketing and R&D efforts. Hence we chose the name Co-Prot.

Expanding can also mean using a franchising model. We will be happy to train rural farmers that will produce insect mass on the village or regional level. We may supply them the BSF eggs and later they can sell their excess larvae to us. However we are realistic and we do not expect that the franchise model will bring us a significant turnover in the first years, as adapting this new technology may be a slow process.”