BUSINESS IDEA FOR AQUACULTURE

Introduction

Aquaculture is the growing of fish and any other water creatures. It is a foreign culture in our society. There has been a lot of encouragement to local communities to get involved but it has not yet formed grip. However, despite the initial capital outlay, this type of farming would generate some good financial earning to the farmers.

There is no competition to the produce because the lakes which are the source of fish are almost depleted by big time dealers using unfriendly methods of fishing. The Business Idea estimates fixed capital of US$ 14,409 and operating costs of US$ 17,925 generating revenue of US$ 184,800 in the first year of operation.

Processes and Capacity:

A modest farmer would need a minimum of three ponds of 4,000 square meters each. These are normally shallow to about 1.5 meters deep. When ready they are fertilized using agriculture lime and organic fertilizers like chicken, ducks, or turkey droppings. However, artificial fertilizers like NPK and Urea could be used.

This takes two weeks and then stocking is done. Stocking is on a five pieces per square meter basis and at ratio of 3:2 i.e. 3 Tilapia and 2 Catfish. The stocked fries would be 5 g to 10 g for Tilapia and 3-5 cm for the Catfish. Feeding is by applying Aqua Starter for 6 weeks and then after use Grower feeds. After six months the feeds are reduced because the fish would have gained the desired weight and so can reduce on the cost as the farmer is ready to sell.

Requirements:

This business venture requires land with a permanent swamp preferably owned by the promoter. Construction of ponds is better done by hiring experts in that field. Once ponds are stocked, then you need wheelbarrows, spades, slashers and hoes for day today’s operations and a sewing net for harvesting.

Capital Investment Requirements in US$:

Capital Investment Item Units Qty Unit cost Total
Land No 1,500
Pond Construction No 3 4,000 12,000
Wheelbarrow No 3 25 75
Spades No 4 4 14
Slashers No 10 1 10
Hoes No 5 2 10
Sewing Net No 1 800 800
Total   14,409

Production and Operating Costs in US$:

(a)Direct Materials, Supplies and Costs:

Cost Item Units Unit Cost Qty/day Pdn Cost/day Pdn Cost/mth Pdn Cost/yr
Direct Costs:
Fingerlings (tilapia) Pcs 0.06 72,000 4,320 4,320 4,320
Fries (Catfish) Pcs 0.10 48,000 4,800 4,800 4,800
Fertilizers Kgs 83 1,000
Fish feeds Kgs 0.51 17 9 225 2,705
Sub-total 120,017 9,129 9,429 12,825
General Costs (Overheads):
Labor 225 2,700
Selling and Distribution 125 1,500
Miscellaneous 75 900
Sub-total   425 5,100
Total Operating Costs   9,854 17,925

1) Production costs assumed 312 days per year with daily capacity of fish farming 60,000fish.

2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.

3) Direct costs include: materials, supplies and other costs that directly go into production of the product.

4) Total monthly days assumed are 26-days.

5) The valuation currency used is United States Dollars.

Market Analysis

This business proposal does not yield any profits in the first harvest after six months. This is due to a huge excavation cost for quality Ponds that lasts for 60 years. The fish market is readily available because the lake fish is very expensive and scarce since most of it is processed for export. Secondly, the fish skeletons which were being sold to the public after processing for export are also currently exported. Furthermore, aquaculture would be sustained better if the farmers would indulge in poultry and Piggery because their dropping would be of great use in the ponds.

Project Product Costs and Price Structure

Item Period Out put Unit Cost Pdn Cost/ yr Unit Price Total Revenue
Tilapia 6-month 36,000 0.15 5,378 0.9 32,400
Per year 72,000 0.15 10,800 0.9 64,800
Cat-fish 6-month 24,000 0.15 3,600 2.5 60,000
Per year 48,000 0.15 7,200 2.5 120,000
Total   120,000   18,000   184,800

Profitability Analysis Table

Profitability Item Per day Per Month Per year
Revenue 592 15,400 184,800
Less: Production and Operating Costs 57 1,494 17,925
Profit 535 13,906 166,875

Government Incentive

The Government has got funds to support development of Aquaculture. Options available include accessing European Union Funds at very attractive rates. There are also some NGOs that have come out to support the growing of fish because fish is very nutritive in terms of proteins and vitamins therefore very good for feeding children to fight malnutrition. It is well aligned with the policy of poverty eradication program

Research was done by Business Synergies for Uganda Investment Authority SME Department.