Photo - the development of an aquaculture enterprise in Africa
26093

the development of an aquaculture enterprise in Africa

Russia, St. Petersburg City
Market: Farming
Stage of the project: Idea or something is already done

Date of last change: 14.02.2018
Min investment
$  300.000
0
Total required
$ 300.000
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Idea

Using the resources of our Project Team - long working experience of business in the aquaculture, good relationsheep in the Government of one of most stable african countries - and financing from the interested Investor:

at the 1 stage we plan to setup a pilot farm for tilapia farming with capacity of 90 tons per year

at the 2 stage we plan, using the financial resourses from the country's economic diversification fund, to build a large industrial farm with production volume of 5,000 tons of tilapia per year and own processing plant

Current Status

We have done a remote marketing research of the market and the competitive environment in the region.
We have held a preliminary talks with representatives of the Government of the country. They confirmed state's interest in the development of the industry and opportunities for co-financing projects in this area.
We have chosen a service company for the design and engineering of the plant.
We prepared a business plan and financial calculations.

Problem or Opportunity

After the reduction in domestic political tension over the past decades, the region of sub-Saharan Africais is at the stage of fast economic growth. Along with the dramatic increasing of total population - the ongoing urbanization and the middle class growing - have created a good base for increasing of domestic demand and in particular on the food market.
At the same time, the agricultural production in the region is still mainly exported-oriented (with focus on cocoa beans, tea, coffee, etc.), while many basic food products, and in particular fish, are imported.
An additional problem is complex logistics, overloaded ports and long delays in customs clearance.
All of this forms a good potential for food production inside the region.

Solution (product or service)

We plan to set-up a fish-farm in one of the most stable and economically developed countries in the region.
At the first stage, using the finansing of the Investor, we plan to set-up a pilot farm with production capacity of 90 tons of tilapia per year.At this stage we plan to sell oyr product in the capital of the country among the restaurants, hotels, shops.
The launch of such an enterprise will be a basis for obtaining of financing from the goverment's fund for the second stage - the setting-up of large-scale production with a production volume of about 5,000 tons of tilapia per year.
In the future, we see the further expansion of production by the volume and by the species.

Competitors

The aquaculture industry in sub-Saharan Africa is unevenly developed.
The total volume of fish farming production for 2014 according to FAO data was about 500 thousand tons, of which almost 98% fell on tilapia.
From that, almost 93% of production was provided by 7 countries and the leader - Nigeria has grown almost 330 000 tons of fish.
Usually all farmed fish is sold internally, it is difficult to deliver it far from production sites due to poorly developed processing and difficult logistics.

Advantages or differentiators

The advantage of the project at the first stage will be the production located very close to the sales market.
It will allow to deliver fresh cooled fish to the consumer using a small investment in transportation.
There are no alternative suppliers of fresh tilapia at the moment in the country's market.
At the second stage, a large productyion volume and using of modern fishfarming technologies will allow us make a product with a low cost.
Also, having an own fish processing plant, we will be able to sell our products among the actively developing retail chains in the region.
Currently almost all packed and processed fish enters the market mostly from southeast Asia, but as a result of logistics complexities and supply chain undevelopment its price is much higher than in the market of Europe and Asia.
The production of a high quality processed and packed fish inside the region will allow us to obtain competitive advantages in terms of price and shelf life of our products.

Finance

For the implementation of the first stage we require the investments of about 300 000 USD.
The financial indicators of the pilot farm are:
The payback period is 3 years
NPV - 188,000 USD
IRR - 40%

Money will be spent on

Investments of the first stage will be used as follows:
15 000 USD - design and engineering of the project
15 000 USD - businesstrip to the country of localization, negotiations with state bodies
15 000 USD - legal registration
175 000 USD - purchase and installation of equipment
80 000 USD - running capital before the first incomes
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