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
(Small Farm 24 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 4-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, 16 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 25
40 Ponds for intensive growth of Tilapia plus a Hatchery for the raising of
fry and fingerlings. (about 25.000 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
8 additional ponds will be constructed .
Total yield for the second year will be
(21.5 x 2 x 16) + (18 x 2 x 8) = 976 MT/year.
2.2.5
Third year of
full production
8 ponds will be added.
Total yield for the third year will be
(18 x 2 x 8) + (21.5 x 2 x 24) = 1,320 MT/Year
-------------------------------------------------------------------------------------------
Table 1: Output of DFF
Farm During Run-In Period and First 3 Full-Production Years ,
the 3 full year (and on) total production will be 1032 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 |
8 |
24 |
18
/ 21.5 |
18 /
21.5 |
976 |
|
|
3 |
8 |
32 |
18 /
21.5 |
18 /
21.5 |
1320 |
|
|
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 ) 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 2 and further on ,
prices may/may not increase .
Average selling price $4.40 /Kg or $2.00 / Lb
|
Subject |
Initial stage (Run In +Year
1 920,000Kg |
Second Stage Years
2 & 3 & on 2,296,000Kg |
|
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 |
$
3,036,000 |
$
8,885,520 |
|
|
|
|
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
(Management , Procurement and Logistics)
-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
·
Engineer - plans and designs production facilities and controls -60K
·
Chief
Foreman -60K
·
Fish
biologist - selects technology and fish to be
grown and taking care of them.
(External Advisor) 20K
·
Hatchery
specialist - raises fingerlings, enables
independent of outside supply.(maybe needed in the third year) (External
Advisor) 20K
·
Book
keeping (External) -20K
TOTAL KEY
EMPLOYEES COST (estimated) = $ 490,000.00 /yr
4.3
Workers
1-Maintanance , 2-Security , 2-Drivers , 10-Farm Workers
(Start with),
then additional 3 at each
growth stage + 1 clerks.
Workers
cost (estimated) = $ 30,000 /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 |
80,000.00 |
|
* |
Rental |
|
Site preparation (preliminary fencing & vehicles) |
20,000.00 |
|
Offices, refrigeration, lab, generator essential for
back-up power, trailers, tractor |
60,000.00 |
|
Site preparation (ground ,fence , etc) |
60,000.00 |
|
Total for initial
stage site expenses |
220,000.00 |
5.3
Running cost
Table 4 - Operating
Expenses ( in 1000 USD)
|
Production |
288 MT |
632 MT |
976 MT |
1320 MT |
|
Time |
Run In |
Year 1 |
Year 2 |
Year 3 |
|
Fish Fry |
70 |
150 |
100 |
50 |
|
Hatchery |
|
20 |
40 |
60 |
|
Feed |
160 |
360 |
520 |
620 |
|
Workers for operation (incl. new pond construction) |
360 |
450 |
450 |
450 |
|
Management personal
|
490 |
490 |
600 |
600 |
|
insurance (corp.) |
15 |
25 |
35 |
45 |
|
Electricity |
25 |
45 |
70 |
80 |
|
Vehicles |
6 |
35 |
70 |
75 |
|
Telephone , Fax ,etc |
15 |
22 |
45 |
45 |
|
Liquid Oxygen |
50 |
100 |
130 |
150 |
|
Office supplies |
7 |
11 |
30 |
30 |
|
Equipment repairs |
8 |
15 |
30 |
35 |
|
Travel |
10 |
20 |
50 |
55 |
|
Advertising |
20 |
45 |
60 |
70 |
|
Ice Containers |
14 |
30 |
40 |
50 |
|
Key-men Insurance |
30 |
30 |
40 |
40 |
|
Site rental |
20 |
25 |
30 |
30 |
|
Profit sharing for key men |
|
30 |
60 |
60 |
|
Miscellaneous |
8 |
30 |
80 |
80 |
|
Total Expenditure |
1308 |
1933 |
2480 |
2625 |
+ 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 632MT |
Year 2 976MT |
Year 3 1320MT |
|
Investment by investor |
800 |
580 |
220 |
|
|
|
Investor/bank loan |
750 |
500 |
250 |
|
|
|
Total |
1,550 |
1,080 |
470 |
|
|
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 Sales price |
Total |
288 MT $3.3/kg |
632 MT $3.3/kg |
976 MT $3.87/kg |
1320 MT $3.87/kg |
1320 MT $3.87/kg |
|
Time |
|
Run
In |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
|
Income
from Sales |
17029 |
950 |
2086
|
3777 |
5108 |
5108 |
|
Total
Expenditure |
(10971) |
( 1308 ) |
(1933) |
(2480 ) |
(2625) |
(2625) |
|
6% Marketing Expenses |
(843) |
( 15 ) |
(126) |
(222) |
(240) |
(240) |
|
Initial expenditure |
( 330 ) |
(330) |
|
|
|
|
|
TOTAL EXPENDITURE |
|
(1653) |
(2059) |
(2702) |
(2865) |
(2865) |
|
Investor /owner |
800 |
580 |
220
|
(300) |
(500) |
|
|
Investor/bank loan Working Capital |
950 |
700 |
250 |
(370) |
(580) |
|
|
Balance |
|
577 |
497 |
405 |
1163 |
2243 |
|
Accumulated Balance |
|
577 |
1324 |
1729 |
2892 |
5135 |
|
Owner's
withdraw ($1200 should stay as Working Capital) |
Optional |
|
|
529 |
1163 |
2243 |
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 at year 2 and will finish during
year 3.
6.2.
Turnover
The turnover for the start up period ( about 18 months
) and 3 years operation
will be
.
$ 17,029
6.3.
Profit ( Internal
investment and Balance )
Refer to Table 5 for additional details:
Total
profit
for the total plan ( after return of
Owners Loan and Investor/Bank Loan)
.
$ 5,135,000
$5,135,000/ $17,029.000 x 100 = 30.15 %
|
Break Even
Point - during
Second half of Year 1 |
|
Owner can get
$ 2,243,000 profit each year , (after year 3) without any additional
expansion leaving $ 1,200,000 in the business as Working Capital |