D.F.F. - Dse Fish Farms
Member of DSE GROUP OF COMPANIES
www.dse-energy.com
S.J. Aviel
25 , Caspari Str. Haifa,34677 ,
Tel: +972 4 8242279
Fax : +972 4 8255664
(Large Farm 104 Ponds)
Preview
The following is based on an existing DSE GROUP Fish Farm
project in Florida U.S.A.
Statement of Purpose: The DSE Group is
offering its expertise and services to create FISH FARMS for the
purpose of raising primarily Tilapia (or other type of commercial fish)
as a food crop, using state-of-the-art aquaculture certified techniques, , and
to market this superior crop, as: LIVE and WHOLE FRESH FISH, to various
restaurants, food outlets, catering facilities and wholesalers.
There is a constant increase in consumption of fish, in the World
diet, accelerated by the public awareness of its benefits and therefore a
growing demand for uncontaminated high quality certified product, largely,
unavailable at this time.
Today there is a vast import of frozen Tilapia
fish filets to many countries, since no one has the ability to bring live fish from
abroad to the local. markets. The
FISH FARM intends to fill this void by producing, and marketing top quality
locally grown LIVE and WHOLE FRESH FISH, which are largely unavailable
and much more desirable than the imported Frozen fish filets, of dubious origin,
varied degree of contamination and questionable quality.
The DSE Group Fish Farm is known as The DFF.
The
DFF is calling for potential investors to be partners in its fish farm
operations
The following material will prove the economic viability of this
project:
Table of Contents
1. Overview
2. DFF Production Facility
3. Marketing Plan
4. Management Plan
5. Financial
6. Summary
7.
Final figures
1.0
Overview
1.1.
The general idea is based on the following assumptions:
It is advisable to operate through a free international holding
company (
A The Technical and Managerial know how , consultants ,Instructors
etc. will be provided by the DSE-Group.
B A market research will be carried out to choose the type of fish and
the locations of the Fish Farms .
C The plan is that after a certain running in of the Farm ( 1 2
years ) additional farms should be
constructed.
D It should be noted that the
E The calculations were based on the American market
( specific
F One should not forget that such industry of Fish Farms should have a
suitable infrastructure and would need certain additional tasks to be
established , such as :
Supply company of fish food , equipment etc .
A transportation company dealing with the delivery of the crops to
its big
customers ( Stores , Supermarkets , markets etc.
Specific transportation and
selling company to small customers such
as individuals , markets etc.
Specific company for the preparation of the fish to its customers (
making fish Fillet , delivery as live fish in containers and frozen fish
including refrigerating storage facilities.
·
1.1.1 -
Production Division.
The first production plant ,including a hatchery should be established
in a place of optimal/favorable climate conditions, proximity to markets and
water supply.
At a later stage, an additional plants could be constructed in a locations that has the
necessary marketing, geographical, weather and water advantages.
Enlightening Example U.S.A
Growth opportunities for the fish farming business are extremely
favorable as outlined in:
Marketing of Tilapia in the
1.1.2
Marketing and Commercial Department
A marketing department will be established to act as the sole agent
for all activities, undertaken, by the Production Department
Responsibilities of the marketing department will include: sales,
advertising, public relations, establishing agencies, partnerships and other
business alliances with potential customer (e.g. restaurants, catering
companies, wholesalers and supermarkets).
marketing plan are provided in Section 3.
A commercial
department is being created for the purpose of
administering construction, expansion, maintenance ,transportation, and
for obtaining equipment, fingerlings, fish food, and other necessary supplies.
1.1.3 - Benefits of farmed Tilapia and /or other type of fish
Public demand, for whole,
fresh and live Tilapia fish, from a known, clean and non-contaminated
environment is increasing at about 20% per year.
1.1.4 - Why Tilapia From The DFF
Tilapia will be the principal product raised at
The DFF fish production facility, in ponds, using a recirculation system that
employs filtration equipment and bacteria removal of fish waste and algae from
the water. The aqua culture system is able to uniformly grow the fish, to the
ideal size for fitting a dinner plate and by doing so, producing a plump,
attractive Tilapia, of suitable size and weight, for portion control.
1.1.5-
Ideal Location
Year
round warm weather, abundance of available water, availability of reasonably
priced land, infrastructure and the relative ease of obtaining agricultural
permits and licenses.
- Warm weather promotes a faster growth cycle decreasing the
time from hatching to market.
- Tilapia can be raised year round.
- Two crops can be grown in a year.
- Potential local market.
2. Production Facility
Construction of the production facility has been
planned in stages to be constructed and implemented over a 6-year period.
At first the plant will be constructed to initially
contain 8 ponds, each 350 Cu.Meter in size (about 9 Meters radius/pond). During years 1-5 of full production, 96 ponds will be added; a portion of the gross profit will
be reinvested to expand production capability.
The site should include water source , sufficient electricity ( which
could be backed up by Solar Photo Voltaic systems ), roads and easy contact
with big cities .
The staff will include high skilled and experienced management with unskilled workers .
A summary of the addition of ponds and projected
yield is provided in Table 1 at the end of this section.
2.1.
Operations for TILAPIA Growth
2.1.1. Land
The land will be transferred to the DFF on a leasing agreement.
The land will be sufficient for the
construction of 100 120 Ponds for
intensive growth of Tilapia plus a Hatchery for the raising of fry and
fingerlings. (about 60.000 squar yards).
The
Fish yield (regular density) for
each pond would produce 18 MT ( Metric Ton ) / Cycle in the first stage (after
construction) while the second stage would with higher (higher density) yield
of fish and will reach to 21.50 MT /Cycle.
2.2 Production
2.2.1. Initial Phase
The one and one-half year initial phase will be
comprised of two stages:
- 6 months - construction of 8 ponds (about 350 cubic meters each)
-12 months - run-in period.
2.2.2. RUN-IN PERIOD
The following 12 months will be a run-in period
during which all systems, will be
integrated.
Output of 18.0 MT. ( for regular density of fish crop per cycle )
or 21.50 MT Per cycle (for each pond For high density per cycle ).
The output of each pond during the run-in period
will be limited to 18 MT per 6-month cycle , until the
systems are fully integrated , this will be the output
for each new ponds
increase .
Total yield = 18 MT x 2 growing cycles x 8 ponds = 288
MT.
2.2.3. First full year of production
8 ponds are added
Total yield = 21.5 MT x 2 growing cycles x 8 ponds
+18MT x 2 cycles x 8 ponds = 632MT/year.
2.2.4.
Second year of full production
16 additional ponds will be constructed .
Total yield for the second year will be (21.5 x 2 x
16) + (18 x 2 x 16) = 1264 MT/year.
2.2.5 Third year of
full production
24 more ponds will be added.
Total yield for the third year will be (21.5 x 2 x
32) +( 18 x 2 x 24 ) = 2,240 MT/Year
2.2.6. Fourth year of full production
24 additional ponds will be added.
Total yield for the fourth year will be (21.5 x 2 x 56) + (18 x 2 x 24) = 2,928 MT/year.
2.2.7. Fifth year of full production
24 ponds will be added.
Total yield for the fifth year will be (21.5 x 2 x
80) + 18 x 24 x 2 = 3960 MT/year.
-------------------------------------------------------------------------------------------
Table 1: Output of DFF Farm
During Run-In Period and First 5 Full-Production Years , the 6 full year (and
on) total production will be 4472 MT/yr .
|
Year |
Number of Ponds Added |
Total Number of Ponds |
MT b, a- Per pond First 6 month cycle |
MT b, a- Per pond Second 6 month cycle |
Total (MT) c/Year |
|
Run-in |
8 |
8 |
18 |
18 |
288 |
|
1 |
8 |
16 |
18 / 21.5 |
18 / 21.5 |
632 |
|
2 |
16 |
32 |
18 / 21.5 |
18 / 21.5 |
1264 |
|
3 |
24 |
56 |
18 / 21.5 |
18 / 21.5 |
2,240 |
|
4 |
24 |
80 |
18 / 21.5 |
18 / 21.5 |
3,272 |
|
5 |
24 |
104 |
18 / 21.5 |
18 / 21.5 |
4,304 |
Mt: Metric tons
a: Output of existing ponds
b: Output of additional ponds
c: c: Combined output of all ponds
All
the added ponds will be built by DFF workers
3. Marketing Plan
3.1. Targeted market
The production facility will be a relatively low output facility in its
early stages, It will, therefore, market its product to single supermarkets,
caterers, fish markets, local distributors and local restaurants.
3.2. Pricing
Tilapia is sold for between $2.20 and $6.60 per kilogram
based on size and quality (according to official data), and also depending upon
whether the customer is large (e.g. supermarket chains, major distributor), or
small (e.g. single supermarket, restaurants, local distributors and retailers).
The selling price for Tilapia by the Marketing Division has been
calculated conservatively to account for any unforeseen circumstances
encountered by the new facility.
The strategy for the marketing would be based on two stages :
Initial stage ( Start up period and year 1 & 2 ) will be dedicated
to cause a break through into the
market by lowering of prices including
a fast and reasonable expense for
advertising , this period will
enable us to study the market needs * such as selling of cleaned fish , direct
selling to restaurants , Hotels etc for higher prices etc .).
Second stage as from year 3 and further on , prices
may/may not increase .
Average selling price $4.40 /Kg or $2.00 / Lb
|
Subject |
Initial
stage (Run In +Years 1 & 2 2,184,000Kg |
Second
Stage Years 3 & 4 & 5 9,816,000Kg |
|
Average selling price per $/Kg |
$ 4.40/Kg |
$ 4.40/Kg |
|
Less unforeseen |
$ 1,10/Kg |
$ 0.53 Kg |
|
Net
selling price$/Kg/ |
$3.30 /Kg |
$3,87/ Kg |
|
Total net selling price |
$ 7,207,200 |
$ 37,987920 |
|
|
|
|
3.3. Advertising and
Public Relations
It will be the aim of the company to have the production plant LOCAL
OFFICIAL AUTHORITIES inspected
during the entire growth (production) cycle, and therefore be one of a handful
of producers able to ship inspected and
certified product to market.
4. Management
Plan: Executives and Shareholders
4.1 The
land for the Farm is provided to the Company on a leasing agreement.
4.2
The following
functions of Key employees should be
compensated with stock options in order to bind them to
the
company.
·
Manager -70K
·
2
Economical/Technical consultants Technology
transfer , market research , Plant location , resources ,Detailed business plan
, Cash flow Planning ,Organization scheme , Schedules etc. -180K
·
Marketing Manager 60K
·
Procurement and Logistics 60K
·
Engineer - plans and designs production facilities and controls -70K
·
Chief Foreman -60K
·
Fish biologist - selects technology and fish to be grown and taking care of them. 80K
·
Hatchery specialist - raises fingerlings, enables independent of outside supply.(maybe
needed in the third year) 60K
·
Book keeping and
financial manager -60K
TOTAL KEY
EMPLOYEES COST (estimated) = $ 700,000.00 /yr
4.3 Workers
1-Maintanance ,
2-Security , 2-Drivers , 10-Farm Workers (Start with),
then additional 5 at
each growth stage + 2 clerks.
Workers
cost (estimated) = $ 36,000 /yr/worker
5. Financial
5.1.
External
Investment
Initial funds required to
establish DFF are itemized in Table 3.
5.2
Initial Investment
Table 3: Initial-Set Up Expenses/Investment *
|
Purpose |
($) Amount |
|
Preliminary Costs: All preparations for start-up, including expenses at Site , land search, permits, incentives, location of suppliers and
sub-contractors |
100,000.00 |
|
* |
Rental |
|
Site preparation (preliminary fencing & vehicles) |
30,000.00 |
|
Offices, refrigeration, lab, generator essential for back-up power,
trailers, tractor |
80,000.00 |
|
Site preparation (ground ,fence
, etc) |
90,000.00 |
|
10%
Unforeseen |
30,000.00 |
|
Total for initial
stage site expenses |
330,000.00 |
5.3
Running cost
Table 4 -
Operating Expenses ( in 1000 USD)
|
Production |
288 MT |
632 MT |
1264 MT |
2,240 MT |
3,272 MT |
4,304 MT |
|
Time |
Run In |
Year 1 |
Year 2
|
Year 3 |
Year 4 |
Year 5 |
|
Fish Fry |
70 |
152 |
290 |
390 |
390 |
440 |
|
Hatchery |
|
|
|
264 |
100 |
|
|
Feed |
160 |
380 |
760 |
1340 |
1,967 |
2,587 |
|
Workers for operation (incl. new pond
construction) |
360 |
540 |
720 |
900 |
900 |
720 |
|
Management personal |
700 |
700 |
700 |
980 |
980 |
980 |
|
insurance (corp.) |
15 |
15 |
25 |
25 |
35 |
45 |
|
Electricity |
25 |
35 |
45 |
80 |
120 |
130 |
|
Vehicles |
6 |
35 |
35 |
60 |
70 |
75 |
|
Telephone , Fax, etc |
15 |
20 |
22 |
35 |
45 |
45 |
|
Liquid
Oxygen |
50 |
110 |
170 |
280 |
350 |
500 |
|
Office
supplies |
7 |
10 |
11 |
20 |
30 |
30 |
|
Equipment repairs |
8 |
15 |
15 |
25 |
30 |
35 |
|
Travel |
10 |
30 |
20 |
40 |
50 |
55 |
|
Advertising |
20 |
55 |
45 |
50 |
60 |
70 |
|
Ice Containers |
14 |
30 |
40 |
90 |
120 |
160 |
|
Key-men Insurance |
40 |
45 |
50 |
80 |
90 |
90 |
|
Site rental |
36 |
25 |
25 |
30 |
30 |
30 |
|
Profit sharing for key men |
|
|
47 |
200 |
250 |
270 |
|
Miscellaneous |
8 |
110 |
30 |
50 |
80 |
80 |
|
Total Expenditure |
1544 |
2307 |
3050 |
4969 |
5697 |
6342 |
+ It should be
checked to make some specific arrangement (possible partnership)
with the Oxygen manufacturer or Feed
Supplier
5.
4 The total investment, cash flow and
income information
Table 5.4A Total external
working capital( in 1,000.00 $)
|
Subject |
Total |
Start up
288MT (18 mo.) |
Year 1 344MT |
Year 2 632MT |
Year 3 688MT |
Year 4 976MT |
Year 5 1320MT |
|
Investment by investor |
800 |
560 |
240 |
|
|
|
|
|
Investor loan |
750 |
400 |
350 |
|
|
|
|
Bank loan
|
1,697 |
950 |
520 |
227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
3,247 |
1,910 |
1,110 |
227 |
|
|
|
Important Remark : The investor should be aware that in the event
that the Bank will not provide the
full loan of $1,670,000
based on securities provided by the plant , the Investor will have to provide the additional securities.
Table 5.4B Balance
( in 1,000 USD)
|
Net selling price $/Kg |
$3.30 /Kg (1-2 yr.) |
$3,87/ Kg (3-5 yr.) |
|
Subject |
Total |
Start up 288MT (18 mo.) |
Year 1 632MT |
Year 2 1264MT |
Year 3 2240MT |
Year 4 3272MT |
Year 5 4304MT |
|
Income from
Sales |
45,194 |
950 |
2,085 |
4,171 |
8,669 |
12,663 |
16,656 |
|
Total Oper.
Expenditure |
(23,909) |
( 1,544 ) |
(2,307) |
(3,050) |
( 4,969 ) |
(5,697 ) |
(6,342) |
|
6% Marketing Expenses |
(2,596) |
( 56 ) |
( 120) |
(240) |
( 500) |
(720) |
(960) |
|
Initial expenditure |
( 330 ) |
(330) |
|
|
|
|
|
|
Investor |
800 |
560 |
240 |
|
(800) |
|
|
|
Investor loan |
750 |
400 |
350
|
|
(750) |
|
|
|
External/Bank Loans |
1,697 |
950 |
520 |
227 |
(1,032) |
(665) |
|
|
5% unforeseen (from total Expen.) |
(1,195) |
( 77) |
(116) |
(153) |
(248) |
( 285) |
(316) |
|
Periodic balance |
|
853 |
652 |
955 |
370 |
5,296 |
9,038 |
|
Accumulated Balance |
|
853 |
1,505 |
2,460 |
2,830 |
8,126 |
17,164 |
|
|
|
|
|
|
|
|
|
|
Owner's withdraw (leaving $ 3170 for working capital) |
|
|
|
|
|
4,956 |
9,038 |
Remark : he accumulated
balance should about 50% of the next year total expenditure to act as
the next year working capital
6. Summary
6.1.
Break-Even Point and Return of Investment
The break even point (income =
operation expenses) occurs at the second half of
year 1 , as shown in Table
5.
Return of investments
and loans will occur mostly at year 3 and will finish during
year 4.
6.2.
Turnover
The turnover for the start up
period ( about 18 months ) and 5 years operation
will be
.
$ 45,194,000
6.3.
Profit ( Internal investment and Balance
)
Refer to Table 5 for additional details:
Total profit for the total plan ( after return of external investment ,
external bridging finance and Bank)
.
$ 17,164.000
$17,164,000 / $45,194.000
x 100 = 37.9 %
At
the end of the 5th year of full production,
Projected profit
( after returned of the investment and loan provided by the
investor and total Bank loan ) will remain in cash $ 17,164.000 of which $
3,170,000 will remain as working
capital for the production of additional years with the
same output an in year 5 .
Remainder
of $ 17,164,000 - 3,170,000 = $ 13,994,000 will be
available for the Investor