Australia’s biggest prawn farmer aims to resuscitate a $2bn project ditched earlier this year

Seafarms Group’s new chief executive will reassess the future of its $2bn flagship Project Sea Dragon in the Northern Territory which was ditched earlier this year.

Seafarms will be farming black tiger prawns if its Project Sea Dragon goes ahead.

Australia’s biggest producer of farmed prawns aims to resuscitate a trouble-plagued $2bn project ditched earlier this year by a former chief executive.

Seafarms Group announced Tuesday that it would carry out a “thorough reassessment’’ of its flagship Project Sea Dragon, which was under construction in the Northern Territory before work ground to a halt late last year.

New CEO Rod Dyer plans to re-examine a number of issues raised in a March review of the project, which concluded the hugely ambitious, multi-stage scheme was not viable, created “unacceptable risk’’ and lacked adequate debt financing.

But Mr Dyer said his loss-making company based in Darwin “continues to believe in the future of Project Sea Dragon and will now undertake a more detailed assessment’’.

Black tiger prawn will be harvested if Project Sea Dragon eventually becomes operational.

First proposed more than decade ago, the development has suffered from numerous delays but, if completed, would become the world’s biggest prawn farm.

Plans call for it to produce up to 180,000 tonnes a year of black tiger prawns at Legune Station, about 340km southwest of Darwin. A global market now worth about $US180bn a year is expected to grow to $US245bn by 2027.

“Project Sea Dragon is a significant Australian infrastructure project supported by the NT, WA and Federal governments, and the Northern Land Council,’’ Mr Dyer said.

“While the final decision is dependent on the outcome of our current assessment process, we believe the project has a future and as the new Board and executive, we are looking to manage the risks from the project, maximise the interests of shareholders and work closely with our key stakeholders.’’

Mr Dyer, who took the helm last month after serving as project director for Project Sea Dragon, said he would now engage independent consultants to carry out a new risk assessment of the scheme and a re-examination of “cost structures and financial management’’.

He also intends to visit prawn farms, hatcheries and packing plants in Central America, where ponds sized 10ha or larger are common.

Much of this work was already carried out under the guidance of now-departed CEO Mick McMahon, who resigned in early May after just seven months in the job rather than face an extraordinary general meeting called explicitly to have him ousted.

Former Seafarms CEO Mick McMahon

Mr McMahon, a former chief executive of the Inghams chicken group, joined the company last September and almost immediately launched a review of Project Sea Dragon.

But his recommendation to scrap the project ran afoul of major shareholder Ian Trahar, a Perth businessman on the Seafarms board who controls 28 per cent of the stock and called the EGM solely to have Mr McMahon removed.

A shake up of the executive ranks followed Mr McMahon’s departure, including the resignation of another former Inghams executive, Ian Brannan, who served as both chief financial officer and company secretary.

It remains uncertain whether Seafarms will proceed with a scaled-down pilot project as recommended by Mr McMahon in place of the vastly bigger development.

Amassing more than $200m in investment backing since 2012, Project Sea Dragon also managed to attract nearly $135m in infrastructure funding from the NT, Western Australian and federal governments.

Seafarms, which has an operational base in north Queensland producing Crystal Bay Prawns, suffered a $36.8m net loss in the December half, including a $23.3m writedown for Project Sea Dragon.

That followed numerous prior full-year losses, including $25.7m of red ink the last financial year.

Shares in the company have been trading at record lows recently, rising slightly on Tuesday to close at 1.3 cents.