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Private Equity Makes Its First Investment in Insect Farms 

Private Equity Makes Its First Investment in Insect Farms 

(Bloomberg) -- Rabo Corporate Investments, the private equity arm of Dutch lender Rabobank Group, has made its first venture into the insect protein industry by buying a stake in the Netherlands’ Protix BV.

The investment, the size and value of which weren’t disclosed, comes months after the company opened what it describes as the world’s largest insect factory in Bergen Op Zoom, at a cost of more than 40 million euros ($45 million). The company breeds larvae of the black soldier fly and converts them into meal and oils for animal and fish feed as well as producing fertilizer from their waste.

Protix is one of a handful of companies worldwide seeking to open insect factories with the aim of partially displacing fishmeal as salmon feed and supplying poultry and pig farms. Insect meal, which can also be used as pet food, is high in protein. Insect plants have the added benefit of reducing the output of methane, a greenhouse gas, in landfills, because the maggots are fed on waste from food and farming.

“We consider Protix an absolute front-runner in this sector,” said Joost Vogels, investment manager at Rabo Corporate. “It solves two key challenges: How to produce food in a sustainable way and how to reduce food waste.”

Maggot Oil

Protix competes with AgriProtein Ltd., which operates a pilot factory in South Africa and plans to expand to California and the Netherlands, France’s Ynsect SAS and InnovaFeed, Canada’s Enterra Feed Corp. and U.S. company EnviroFlight LLC.

In addition to animal feed, oils produced from black soldier flies could be used as an alternative to palm kernel oil, the production of which causes deforestation in Southeast Asia, according to a study commissioned by Protix.

The investment is expected to help fund the growth of the company, which wants to expand outside of the Netherlands and is considering franchising its technology to investors in Asia and South America.

Within the next three to four years, Protix will need “well in excess of 100 million to 150 million euros in funding for the roll-out of large-scale production facilities,” said Kees Aarts, Protix’s founder and chief executive officer.

Rabo Corporate Investments has invested more than 1.4 billion euros in mainly food and agriculture industries globally and plans to increase that to 2.2 billion euros, Vogels said. It has stakes in sandwich-maker Pret A Manger Ltd. and in Kingfish Zeeland in the Netherlands, which breeds yellow-tail fish for use in sashimi.

To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

To contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Pauline Bax, Hilton Shone

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