John Heys, a former cabinet-maker in Launceston, Chris Ryan, who is based in Sydney, and a team of marine scientists have developed the world's first large-scale seahorse farm at the wharf in Beauty Point, where 600,000 swim in laboratory aquariums.

The project has generated so much interest that researchers and technicians have been constantly interrupted in their work by inquisitive tourists.

But the Seahorse Australia team members realise the crowds mean they are sitting on a tourism gold mine, and they have just opened another warehouse on the wharf as a Seahorse Centre for visitors and parties of schoolchildren. It is bringing in much-needed extra cash to support research.

And now Ryan and Heys are looking at the possibility of setting up a sister plant in China. 'We would sell our technology if the price was high enough and allow a parallel operation in China,' says Ryan, managing director of Seahorse Australia.

While Seahorse Australia looks to China to help recover the millions of dollars that have gone into research over the past two years, the Tasmania state government sees the Seahorse Centre helping tourism throughout the region.

It complements the nearby Tamar Valley wine route, which has 15 vineyards producing export-quality sparkling wines, pinot noir, chardonnay and riesling. Gourmet restaurants are being opened along the route. One of the most popular is at the Strathlynn Centre, operated by Pipers Brook Vineyard. Ironically, the growth of Tasmania's wine industry indirectly led to the breakthrough in seahorse farming, and the opening of the Seahorse Centre. The warehouses at Beauty Point, which overlook the beautiful Tamar River estuary, were built to store apples. But as local wines gained in popularity, land which had been traditionally used for apple farming was given over to the grapevine. The warehouses fell into disuse.

So two years ago, Seahorse Australia took them over for research into farming the odd-looking fish.

Many had tried and failed before them in other parts of the world, but they knew if they could make a breakthrough, they could make a fortune, and end indiscriminate harvesting to ensure the survival of the seahorse.

John Heys, production director, says: 'We were doing serious research, but when word got out that we were trying to farm seahorses here, tourists were knocking on the door all the time.

'In the two years we have been at Beauty Point, around 20,000 tourists, mostly mainland Australians, came here wanting to see seahorses.' The company has spent A$1.4 million (about HK$5.7 million) to convert the extra warehouse into the Seahorse Centre.

It has set up aquariums of farmed seafish there and other marine life including sea dragons, and the local Maritime College has added exhibits.

Around 10 vineyards offer wine-tasting at the centre and a 156-seat restaurant has been opened. A wall has been demolished and replaced with a huge window, offering diners panoramic views of the estuary. Downstairs, there is also a small book shop and souvenir centre.

At the research warehouses nearby, Heys inspects rows of 'vats' containing a total of 600,000 seahorses in various sizes which have been farmed there. The newborn seahorses resemble thousands of tiny threads.

Heys says that Seahorse Australia was initially given a permit to take 600 seahorses, which are a protected species in Australia, from the clean waters of the estuary, and Project Seahorse was born.

Marine scientists were brought in. Their mission was to devise ways to farm seahorses. In other parts of the world, large-scale farming experiments had failed. Besides losing many habitats to development, and having their numbers decimated in the wild for home aquariums and Chinese medicines, seahorses have their own natural predators - fish, crabs and birds. 'Only around two per cent survive in their natural environment,' Heys says. 'We have attained a 90 per cent survival rate of newborns here.'

Heys is not giving any secrets away, but visitors could be forgiven for thinking they have stepped into Dr Frankenstein's laboratory, looking at some of the equipment used to process food for the seahorses and control the temperature and salinity in the aquariums. Apart from their appearance, the breeding habits of seahorses are firing the imagination of tourists at the Seahorse Centre. For it is the male that 'gives birth'.

The female transfers her eggs into the male's pouch, where they are fertilised over 30 days, and on average around 400 babies are born.

The large-bellied seahorses, the species which is farmed here (there are 35 species worldwide), can reproduce when only four months old. Females are able to mate twice a month and the gestation period is between 30-50 days.

So it's not difficult to see why Heys and his team believe they can save the species, just as crocodile farming gave the prehistoric reptile a new lease of life in the wild.

But now they need to find a Chinese partner. The farming project and the Seahorse Centre have swallowed nearly A$5 million in funds. It's time to reap the benefits and plough in more money for research, says Heys.

And China may never need to look beyond its own borders to satisfy the huge demand for the seahorse in traditional medicine.