Aquaculture business plans expansion to South Dakota

The aquaculture company Tru Shrimp started out in the small town of Balaton, Minnesota and uses an old elementary school building as a shrimp laboratory.

The company is preparing to scale up operations to create three distinct companies and product lines. It will produce shrimp, biomedical material, and a pet food ingredient from facilities in Minnesota and eventually, South Dakota.

Tru Shrimp has spent years on scientific innovation and engineering. Americans eat more shrimp than any other kind of seafood, and according to company leaders.

Michael Ziebell, president and CEO of the company, spent more than 22 years with the Schwan's Company where he helped to develop the Red Barron Pizza before joining Tru Shrimp.

The operation plans to develop a new production facility in Madison, South Dakota. A separate company - Tru Protein - will produce a pet food ingredient there, but it won't be the only product made at the Madison plant.

A third company – Tru Chitosan – will create a substance used in biomedical, pharmaceutical and dermatology products.

"Madison Bay Harbor is what we call it. And there we will build a facility modeled exactly on what is here in Balaton," said Ziebell. "That facility will be cable of producing about 1.8 million pounds of shrimp, over 4,700 kg of chitosan, and about 600,000 pounds of pet food ingredient."

Ziebell said they hope to break ground on the new South Dakota plant in 2024 and when complete, it will offer a minimum of 60 new jobs.

Ziebell said their commercial shrimp operation will provide material for the planned animal food line under the brand Tru Protein.

"For example, we remove the heads when we process the shrimp. We combine those heads with shrimp that have been damaged through the process in production and also processing as well as shrimp that are too small for the consumer market and we create an emulsion of that high protein low fat pet food ingredient that has a one-word ingredient statement; shrimp," said Ziebell.

All shrimp and shellfish have natural levels of chitin which can be refined into a molecule called chitosan.

In the past, it's been used as medicine and the company plans to further the medical application of the molecule.

"Because of the way we grow the shrimp, under almost total controlled conditions, almost laboratory conditions, our chitosan can be used for medical applications. Both pharmaceutical and medical device," said Ziebell.

In fact, chitosan may ultimately bring in the company's largest revenues. Ziebell projects that could be as much as 60 percent.

The parent company Tru Shrimp has been working with the state for years to plan and develop the new plant.

South Dakota invested in Tru Shrimp in 2019 under the leadership of previous Gov. Douglas Daugaard. Daugaard's economic development office contributed $5.5 million directly from the governor's Future Fund to Tru Shrimp, according to MPR.

Lake Area Improvement District (LAID) in Madison also invested money in the company. That money holds a convertible note that becomes stock in Tru Shrimp when the company breaks ground.

The Lake Area Regional Development Corporation has also provided Tru Shrimp with the option to purchase land and build an industrial park, which Ziebell said he is extremely grateful for.

Local business leaders say Tru Shrimp will be an important addition. Brooke Rollag is the executive director of the Lake Area Improvement Corporation.

"We’re excited, so the Lake View Industrial Park we own land and we’ve engaged in a land option with Tru Shrimp Madison. Bay Harbor is the official name of the project," said Rollag.

Company CEO Michael Ziebell said their medical applications for chitosan can make a difference in trauma situations.

In fact, they are currently working on a product that uses chitosan in fibers, like bandages, that can help stop bleeding in wounds.

Ziebell said they are now testing the material with medical staff treating soldiers on the front lines of the war in Ukraine.

CORRECTION: An earlier version of this story erroneously stated that the state of South Dakota would receive convertible stock options for its investment into Tru Shrimp, citing Ziebell. These stock options in fact go to Lake Area Improvement District as part of an investment agreement between LAID and Tru Shrimp, according to Sarah Ebeling of the Governor's Office of Economic Development.