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Premium insect meal producer is looking for investors

Thai insect producer Flylab produces BSF insect meal with a 60-65% minimum of protein and plans to close the series A round in April.

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March 17, 2023


Thai insect producer Flylab is looking for investors for a Series A. The company closed a USD 1 million in SEED and Pre-Series A round in 2022 and plans to close the series A round in April, the company told Aquafeed.com at VIV Asia.

Flylab was established in November 2021 in Chiang Mai but the team has been in the insect industry for ten years through another Thai company called Cricket Lab. Cricket Lab produces cricket meal and through a joint venture with Sens Food based in the Czech Republic, sells cricket-based products for human consumption in Europe, mainly in Germany.

“After a few years working with crickets, we saw that the insect industry for animal feed was still thriving. Insect companies were all raising money and remained untouched by the COVID-19 pandemic. We decided to enter the animal feed industry and leave human food behind,” Cyril Caujolle, chief commercial officer at Flylab, told Aquafeed.com. “We realized there was no BSF player in Thailand and that was a huge opportunity.”

With its previous experience with crickets, in about six months, the company was established, raised the first funds and built the pilot plant in three months. “The first year was proving the concept of the insect meal in Thailand and we found that all big players were waiting for these products,” Caujolle said.

Premium insect meal

To feed BSF larvae, Flylab is using premium byproducts. “We are not using proper waste. We want to place Flylab and our BSF product as a premium product granting a 60-65% minimum of protein, while the average protein content in the industry is around 50-55%. We use byproducts from the agro industry but the ones with more nutritional value, such as mash malt from breweries, okara from soy milk production, potato peels, casava waste, etc.,” said Caujolle.

“Since Flylab wants to position its insect meal as premium, it will also mean a little bit higher price by granting a minimum of 60% of protein, the same way as it happens with fishmeal. It will give us a part of the market with a product that gives customers more value,” Caujolle explained. “We are following the same strategy as we did in crickets. We were the first company to reach 70-72% of protein and we applied this idea in BSF.”

In Thailand, these premium byproducts are easy to find but are already sold out with high demand from other animal feed industries or as fertilizers. Right now, at the pilot scale, the feed costs are 70% of the total production costs. As the company increases the scale and increases the volume of purchased feeds, it will be able to reduce costs. “We plan to reduce the feed costs to less than 30% and if we can also use more technology and automation, it will also reduce the price,” Caujolle said.

Flylab has developed its own technology for crickets but the scale of production was quite small compared to the expected amounts for BSF (2-3 tonnes per month for crickets vs. 200 tonnes per month for BSF). To scale and move to Bangkok, the company plans to apply new technology and automation that would also reduce the price and improve efficiency. “Right now, we have basic technologies, vertical farming, climate control, IoT, etc. We are planning a new facility in the Bangkok area and we will apply automation, robotics, etc. from technology companies,” Caujolle said. “Raising insects in Thailand also reduces the costs in terms of energy consumption since the insects need around 30°C for optimal growth. That also is important when talking about sustainability.”

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Trials

Flylab has performed its first trials testing its premium insect meal in shrimp at Katetsart University in controlled conditions. Results showed that FCR was reduced by half and mortality was reduced by 15-20%.

The company has also partnered with Grobest to test its insect meal in shrimp ponds with positive results so far.

Markets and future plans

Flylab is already exporting insect meal to Japan. “There is no BSF facility in Japan and there are big players in aquafeed and pet food with a big demand. There is also a big commercial connection between Thailand and Japan with big traders such as our existing partner, Sanyo Trading, so it is quite easy to send our products to Japan. If we find the right partner, we would like to open a facility in Japan to be consistent with sustainability storytelling and support local production,” Caujolle explained.

The company plans to open a commercial-scale factory at the beginning of 2024 in the Bangkok area for 5,000 MT of the finished products, insect meal and oil. After this, over the next five years, the company plans to open three more factories and get around 50,000-60,000 MT per year with the four factories.

“We are still the only BSF producer in Thailand and we want to take advantage of this position,” Caujolle said. “We don’t want to have huge factories, we want to be very locally focused. Even in a country like Thailand, we would prefer to open 3-4 factories close to our feed sources rather than have a very big one.”

In seven years, the company also plans to open a factory in Vietnam. “We have been contacted by a few partners and there is a big market in the country for aquafeed,” Caujolle concluded.

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