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Tassal has Queensland growth plans to boost share price

The Tassal Group Limited (ASX: TGR) share price is flat over the past year but the aquaculture group’s expansion plans received approval from the Queensland state government. 

Tasmania-based Tassal is principally a cold water salmon farmer where it operates in a heavily regulated environment where additional salmon farming licenses are like gold dust due to environmental concerns over salmon farming.

This is one reason why it’s planning to invest $30 million of capex to develop warm water Queensland prawn farms, with a target to create $25 million in EBITDA by FY 2021. Tassal’s prawn farms will be located around Proserpine with 50 new jobs to be created as consumer demand and prices for prawns continues to rise steadily over the long term.

Over FY 2019 Tassal reported an adjusted profit of $56.6 million sales with rising production costs offset by rising salmon prices. Others in the aquaculture business include Clean Seas Seafood Ltd (ASX: CSS) and Huon Aquaculture Group Ltd (ASX: HUO).

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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