A Business Point of View

From Rocket Scientist to Insect Farmer

Few people will have heard of Oberland Agriscience, one of the more interesting companies in the bioeconomy in Atlantic Canada. The company is an insect farmer that coverts black soldier flies into fertilizer for the agriculture sector and protein for the pet market, aquaculture and livetock sectors. The company is nearing completion of a new 105,000 square foot manufacturing facility in Ragged Lake near Halifax which is expected to be fully operational by the end of the year.

Oberland is breaking new ground in Canada and is only one of two large scale companies active in this space. The other is Entosystem in Quebec. There are a number of smaller companies operating in Canada.

From California to Nova Scotia

Oberland’s Founder & CEO, Greg Wanger, who has a Ph.D. In Geology and Microbiology and is originally from Ontario, had been working at the Jet Propulsion Lab in California. While there he worked on the Mar’s Rover project. His wife also has a Ph.D. who was recruited as a Research Chair at Dalhousie University working in ocean research in 2016. The Wangers moved their family to Halifax and Greg started looking for something to do. After a discussion with a mentor in California who was farming black soldier flies, he decided to do the same in Nova Scotia. In 2017, he founded Oberland Agriculture with the goal of producing a premium, nutrient-rich, reliable protein source. After a successful pilot project, he proceeded to build his new manufacturing facility.

The Manufacturing Process

Oberland is a company built on a circular economy model. The company uses a hundred tons of organic waste each day as its feedstock for the black soldier larvae. All this waste is diverted from landfills. As a side note, he estimates that between 50-60 percent of the calories produced in Canada are wasted. From this waste, twenty tons of fertilizer (called Frass or fly manure) and twenty to twenty-five tons of protein is produced daily. The facility that I recently toured is highly automated and divided into three separate components to protect against catastrophic bio failures. One area is the composting of the organic waste. A second area is the farming component, and the third area is the processing component. The company will operate 24/7 and will have about 50 employees once full production is achieved. Because of the highly automated nature of the facility, the facility’s operations will only need 8-10 employees to operate it. The remainder of the employees will support the development of the company, including an on-going R&D department to develop new products for the company. The company will also use AI to develop nutrient profiles for future products.

The new facility is nearly completely self-sufficient in terms of energy use and heating. The manufacturing process generates sufficient heat to heat the plant itself, and the company has signed an agreement to use solar power to provide the facility with 100 percent renewable energy.

Why Black Soldier Flies

Black soldier flies are not native to Nova Scotia. Oberland will use hundreds of millions of these flies in its daily operation. Mature black flies produce larvae which grow to maturity in a ten-day cycle, from the size of a period to the size of the end of a finger. This is the equivalent to a newborn baby growing to the size of a whale in ten days. The key advantage of these insects is that they grow five to eight thousand times in size in ten days and are known for their nutritional value. Indeed, the protein produced from black soldier flies is known to be hypoallergenic and anti-inflammatory, which has become increasingly important in the pet food industry. When asked if there is any danger associated with these nonnative flies escaping the manufacturing facility, Wanger was quick to assure us that the insects carried no diseases that would harm humans and would not likely live long in the local environment in any case.

Investment Environment

In a recent Insights Podcast, Wanger was very positive about Nova Scotia as a favourable place to invest and credited the province’s Corporate Investment Credits which provides a 25 percent tax credit to manufacturers as an incentive, as being critical to his decision to start his company in the province. The Investment Credits require a minimum of $10 million of capital investment to quality and the cost of Wanger’s new facility would be multiple times this minimum. As he stated in our podcast, “Nova Scotia is a tremendous place to start a business”. Wanger was also complimentary of ACOA for their help. Wanger has used a mix of debt and equity to finance his venture to date.

The Future

Once the facility is fully operational, Wanger believes that his company will become quickly scalable and particularly attractive to investment banks in the US that specialize in scaling up operations like Oberland. That is why he thinks the company’s next manufacturing facility is likely to be located in the US. At the same time, he indicated that any community with a population between 150,000 and 200,000 people could produce sufficient organic waste to support the size of his current facility in Halifax and he is hopefully of building other facilities in the region.

Oberland has been working closely with two Nova Scotia companies. One is Sustane Technologies in Chester which diverts garbage from landfills and turns plastic garbage into synthetic fuels and other waste into fertilizer. The other is Sustainable Blue, located near Windsor, which operates a major onshore salmon farm. Wanger has a vision of a cluster of these companies working together to create a circular economy for communities, whereby the companies would be located together to divert waste from landfills, turn organic waste and other waste into fertilizer, protein and fuel and to grow fish from the fertilizer produced from the organic waste. It is a compelling vision for communities to consider and could represent the future of waste management.