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Technical, Operational, and Financial Due Diligence: Sustainable Aquaculture

Updated: Mar 27, 2023

Aquaculture is a rapidly growing industry that involves the farming and harvesting of aquatic organisms such as fish, shellfish, and seaweed. In sustainable aquaculture, technical, operational and financial due diligence are crucial components in ensuring the highest level of environmental and social responsibility. The audit for certification ensures that these due diligence components are rigorously assessed and that the aquaculture farm meets the necessary standards for sustainable and responsible practices.

Technical due diligence in aquaculture involves assessing the technology and equipment used in the production process. This includes evaluating the quality and reliability of the equipment, as well as the efficiency of the production process. Factors such as water quality, feed quality, and disease control measures must also be taken into account. Technical due diligence is important in aquaculture because it can affect the overall success of the project. If the technology and equipment used are not of high quality, it can lead to low production levels and decreased profitability.

Technical due diligence checklist:

  • Architecture and infrastructure

  • people

  • development workflow

  • intellectual property and licensing

  • development strategy

Operational due diligence is a type of due diligence that investigates the business model and operations of the target to ensure it’s a good fit for the buyer. Operational due diligence involves evaluating the management team and their ability to operate the aquaculture project successfully. This includes assessing the experience and qualifications of the team, as well as their track record of success in similar projects. Operational due diligence is important because it can affect the efficiency of the production process and the overall profitability of the project. If the management team is inexperienced or does not have a track record of success, it can lead to operational inefficiencies and decreased profitability.

This could include review of:

  • All operating processes

  • Supply chain, logistics and procurement efficiencies

  • In-house and departmental efficiencies

  • Human resourcing, workforce strategy and employee retention

  • Digitalization SWOT analysis

  • Cost optimization and risk management

Financial due diligence involves assessing the financial health of the aquaculture project. This includes evaluating the project's financial statements and projections, as well as the overall market demand for the product. Financial due diligence is important because it can affect the profitability of the project and the investor's return on investment. If the financial projections are overly optimistic or the market demand is not strong enough, it can lead to decreased profitability and a lower return on investment.

Financial due diligence checklist

  • Audited financial statements.

  • Balance sheets.

  • Assets and liabilities.

  • Cash flows.

  • Capital expenditures.

  • Projections.

In conclusion, conducting technical, operational, and financial due diligence is crucial for investors looking to invest in aquaculture projects. It is important to assess the quality and reliability of the technology and equipment used, evaluate the experience and track record of the management team, and assess the financial health of the project. By conducting due diligence, investors can make informed decisions and increase their chances of success in the rapidly growing aquaculture industry.


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