Fish grows very fast and can be sold within six-eight months. Though there are many websites with good information about fishery Business, the price of a table size fish and cost of your operation cannot be determined by anything you’ll read online.
The cost of fish and any other product depends on your local market and market forces (demand and supply, festive season, government policy, etc.). That’s why I encourage you to go out and make a research about your intended market.
So, how long can it take to start making much money from fish farming?
Let’s hope everything goes fine, one can expect 18-36 months (depending on various situations).
By this I mean, your first juveniles should not be too much and you should use them as a training point.
Your second juveniles should cover part of your starting capital and your third set of juveniles should cover all of your starting capital and profit. If this is correct, your fourth juveniles should start your appropriate profit… this may be in the second year.
How much you can make in a Fishery Business is dependent on how much you input, I’m sure you understand this.
Your level of investment in fishery business depends on many factors, primarily on the type of farming and the species.
Open-ocean fish farming can be very luctative, because it relies on the environment to take care of filtration and water quality for you- no expensive systems of pumps, filters aerators or chemistry maintenance, and you can grow fairly valuable species such as salmon, mackerel, etc., but it requires big infrastructural expense in boats, netting, and cages to contain the fish and protect your crop from predators, and feed becomes a bigger cost because some is lost to the ocean and it’s less feasible to raise algae feeders this way. It also incurs a cost to the ocean environment.
On the other side of the spectrum is a small pond in your back yard, or an ICB-tote tank or something, that, to do properly, will require filtration and aeration of some sort, even for species that can facultativey air breath, such as tilapia or catfish. But there are many clever designs out there that can do this very cheaply, with solar pumps or even mechanically, and if you combine this with home grown duck weed, azola, and green algae, for a species that can eat that stuff, such as tilapia or carp, the system may just about break even and pay for itself, over time, in fish for your own use. Plus you can use the dirty effluent as fertilizer for your veggies, so there’s even an environmental benefit to it.
Profitability Analysis of a Fishery Business
To examines the profitability of your fish production and to determine the profit level, you have to decide on the size of operation you want to start with. Also you need to have an altimate size in mind ignorer to plan ahead with regards to your land requirement and water source. In order to get an accurate figure on your feasibility study, you have to make sure your input data is based on real local data on all cost factors, yield expectation, and sales prices for your fish.
Key factors you have to consider:
- Fixed Cost (Land, Ponds, Water supply, Equipment, Building…)
- Variable Cost (Feed, Fingerlings, Labour, Water, Energy…)
- Total cost=Total Variable Cost+ Fixed Inputs (Fixed Cost * ROI (Bank))
- Profit = Sales + Stock value – Total cost
Rate of Return on your investment
- ROI= Profit / Fixed Cost
A Few Keys to Successful Investments
Based on our experience advising both private and institutional investors, here are some of our keys to successful investing in aquaculture.
- Top management is key – as with all investments, finding a strong management team that has a solid mix of technical expertise and aquaculture business management skills is critical to success. An inexperienced, unbalanced, or incomplete team could be a recipe for disaster. Invest in people you believe in.
- Location, location, location – superior sites yield superior biological results and when it comes to aquaculture, an abundant supply of high quality water, the right climate, and where appropriate, good soil quality with ideal texture for fish pond construction, are all key ingredients. Proximity to traditional infrastructure, aquaculture infrastructure, and strong markets for the farm-raised products are all important ingredients for success.
- Minimize risk – A good start is an honest assessment of a qualified investor’s tolerance for risk. Seed and early stage aquaculture development companies are always more risky and this is especially true in aquaculture. While seed stage investments in aquaculture offer ground floor opportunities and higher levels of ownership for a given level of investment, investing in more mature and profitable aquaculture companies should be the first choice for the more risk adverse investor. For example, investing in an aquaculture feed company, a new aquaculture technology with wide ranging application, or even an established aquaculture equipment manufacturer are all ways to reduce exposure to farming-specific risks like disease yet still achieve the desired industry exposure. For more risk tolerant investors who prefer to be involved in the production end of the industry, selecting the right species is one way to mitigate some of the risk associated with growing live animals. Farm-raised species like salmon, shrimp, and tilapia all have well established farming methods in place and markets for these species are well established, all of which serves to lower overall risks.
- Economic sustainability – one of the most common causes of failure in the aquaculture industry is a lack of capital to see the project through the early development and first years’ operational phases. Prospective investors are well advised to use conservative projections and be prepared to inject cash into the actual aquaculture operations for at least the first year and most likely longer depending on the type of species and details of the expansion plan. Cash reserves should always be set aside for unexpected events such as disease, seasonal contractions in wholesale prices, early year expansion plans, unanticipated delays in full payment of accounts receivable, and more.
- Maximize returns of Fishery Business – while not required for profitability, the greatest returns on investment in the aquaculture industry are achieved by maximizing economies of scale and internally controlling all the major components that go into producing the final form of the farm-raised product being grown. At each level, incremental higher returns are achieved by investing in research and development, hatcheries, aquaculture feeds, grow out operations, processing plant operations, seafood sales, marketing, and distribution. Fully integrated companies that control all phases of aquaculture operations are well positioned to return the greatest profits. Most qualified investors start with much smaller and more conservative investments and initially focus on one particular segment of the industry.