Feasibility Study on Organic Aquaculture CFC/FAO/INFOFISH Project on Organic Aquaculture in Myanmar, Thailand and Malaysia
Feasibility Study on Organic Aquaculture: Shrimp, Freshwater Prawn and Freshwater Finfish CFC/FAO/INFOFISH Project on Organic Aquaculture in Myanmar, Thailand and Malaysia
INFOFISH is an Intergovernmental Organisation providing marketing information and technical advisory services to the fishery industry in the Asia-Pacific region from its Headquarters in Kuala Lumpur, Malaysia. INFOFISH Level 2, Menara Olympia, 8 Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia. E-mail: info@infofish.org or infish@tm.net.my. Web: www.infofish.org Phone: (603) 20783466, 20784614, 20787794 Fax: (603) 20786804 Copyright The copyright of this publication is vested with the Common Fund for Commodities (CFC). This publication may not be re-produced, in whole or in part, by any method or process, without written permission from the copyright holder. Applications for such permission with a statement of the purpose and the extent of the production desired should be made through and addressed to the Director, INFOFISH (address as above). Cover page photos credit: Fatima Ferdouse PREPARATION OF THIS DOCUMENT The economic feasibility study of organic aquaculture of shrimp, freshwater prawn and freshwater finfish is prepared by INFOFISH under the Common Fund for Commodities (CFC) Project on Organic Aquaculture carried out in Myanmar, Thailand and Malaysia during 2007-2010. The feasibility study was based on culture trials conducted by project partners in Malaysia, Myanmar and Thailand under the project. The study is based on input provided by the project partner farms as well as project technical consultants including Dr Lila Ruangpan, Tarlochan Singh and Anil Kumar P. Inputs from stakeholder workshops conducted in Bangladesh, Cambodia, India, Malaysia, Myanmar, Pakistan, Sri Lanka and Thailand were also incorporated. The economic feasibility study was conducted with the assistance of V. K. Dey, Consultant. The document was edited by Anil Kumar P and Tarlochan Singh. Additional technical inputs and comments were provided by Dr. S. Subasinghe, Dr. Mohammed Ayub and Fatima Ferdouse. Editorial assistance was provided by Rosman Mustaffa. Published by INFOFISH (2011) ii
TABLE OF CONTENTS 1. Introduction...1 2. Culture Systems...1 3. Economic Analysis: Basic Assumptions...2 4. Project Cost...4 5. Means of Finance...6 6. Product Costing...6 7. Working Capital...8 8. Exchange Rate...8 9. Feasibility of a Modified Traditional Organic Shrimp Farm...9 10. Feasibility of a Semi Intensive Organic Shrimp Farm...21 11. Feasibility of a Extensive Organic Freshwater Prawn Farm...31 12. Feasibility of a Extensive Organic Freshwater Fish Farm...43 iii
1. INTRODUCTION Organic aquaculture uses holistic production management systems which promote and enhance ecosystem health, including biodiversity, biological cycles and soil biological activity. Organic production systems are based on specific and precise standards of production which aim at achieving optimal production systems which are socially, ecologically and economically sustainable. Requirements for organically produced foods differ from conventional products in that production procedures are an intrinsic part of the identification and labelling of, and claim for, such products. Organic farm management relies on natural or traditional production methods. As part of the Common Fund for Commodity (CFC) Organic Aquaculture Project carried out in Myanmar, Thailand and Malaysia during 2007-2010, an economic feasibility study was made of organic farming and processing practices. The study focused on the organic farming and processing of black tiger shrimp (Penaeus monodon), freshwater prawn (Macrobrachium rosenbergii) and freshwater finfish such as tilapia (Oreochromis niloticus), silver barb (Puntius gonionotus), common carp (Cyprinus carpio) etc. 2. CULTURE SYSTEMS Two types of culture systems are considered for black tiger shrimp, the modified traditional farming system and the semi-intensive culture system while for freshwater prawn and finfish, the extensive culture system was analysed. Modified traditional organic farming of black tiger shrimp is dependent on tidal water exchange for the operation of the farm. Ponds are stocked by natural stocking as fish fry and shrimp larvae are carried in by the incoming tides during the spring tides when the sluice gates are opened to allow water exchange. However, hatchery produced black tiger shrimp postlarvae are also stocked in the pond at a stocking density of 5 per square metre. Harvesting and filling of the pond is also dependent on the tides. Harvesting is carried out twice a month, during the full moon or new moon. Supplementary feeding with trash fish is carried out in modified traditional farming. The pond size is also larger (about 10ha per pond). Semi-intensive organic farming of black tiger shrimp uses relatively smaller ponds, e.g. 0.5-1.0 ha. Half of the farm area is used as a reservoir for water storage and treatment for recycling. The stocking density is 15 shrimp per square metre. However, since half of the farm area is taken up by the water treatment reservoir, the effective stocking density in the ponds would be 30 shrimp per square metre. Since the stocking density is higher, formulated pelleted feed is used. Feasibility Study on Organic Aquaculture 1
Extensive organic farming of freshwater prawn and fish is carried out in ponds of sizes varying from 1 to 4 ha. In extensive farming of freshwater prawn, 3 juvenile prawns are stocked per square metre. Supplementary stocking of three species of freshwater fish (tilapia, silver barb and common carp) at a rate of 0.05 fish per square metre is also done. In the extensive organic farming of freshwater finfish, fish such as tilapia, silver barb and common carp are the principal species cultured. The stocking density of fish is about 0.6 per square metre. Supplemental stocking of freshwater prawn is done at a rate of 0.1 individuals per square metre. 3. ECONOMIC ANALYSIS: BASIC ASSUMPTIONS The economic analysis on the aquaculture production, processing and marketing of organic black tiger shrimp, freshwater prawn, and fin fish products was undertaken. Separate worksheets for modified traditional farming and semi-intensive farming of organic black tiger shrimp and extensive farming of freshwater prawn and freshwater finfish have been computed. An organic shrimp farmer in Thailand checks his shrimp. Fatima Ferdouse 2 Feasibility Study on Organic Aquaculture
A uniform farm area of 20 ha was taken for undertaking all the farming operations and for computation purposes. The farm rent has been taken as US$ 925 per ha for modified traditional organic shrimp farm and US$625 per ha for extensive organic fresh water fish and fresh water prawn farm and the farm development cost worked out to be US$ 610 per ha for modified traditional farming. In the case of semi-intensive farming operations, the land cost and farm development cost works out to be US$ 15,400 and US$ 1,540 per ha respectively. There was not much earthwork involved for farm development in the traditional farming method except for site clearance; bund/ sluice maintenance etc, while the land development cost for the modified extensive farming method, which includes cost of equipment, electrical connection, construction of sluice, and building for housing security guards etc, works out to be 10% of the land cost. In the case of semi-intensive farming of black tiger shrimp, a 10-ha area has been earmarked as a reservoir for water treatment. Since the farm is tidal-fed in traditional farming, there is natural stocking of shrimp and fish fry, in addition to the stocking of hatchery produced shrimp postlarvae. The finfish varieties farmed organically along with freshwater prawn were tilapia, silver barb and common carp. The income generated by sale of finfish has also been taken into account for computation as additional income. Since the size of fish cultured varies from 300 gm to 1 kg and above, it has been considered for processing into whole round (WR) fish in live and chilled form for marketing domestically. The sale price is assumed to be at the rate of US$ 2.50 for chilled fish and US$ 3.50 for live fish. For black tiger shrimp and freshwater prawn, the following product mix was considered for undertaking the analysis. A) Black tiger shrimp products i) Head-on shell-on black tiger shrimp (HOSO) ii) Headless shell-on black tiger shrimp (HLSO) iii) Peeled pulled vein tail-on black tiger shrimp (PPVTO) B) Freshwater prawn products i) Head-on shell on freshwater prawn in live form (Live FWP) ii) Head-on shell on freshwater prawn in chilled form (Chilled FWP) iii) Head-on shell on freshwater prawn in frozen form (Fr HOSO FWP) C) Finfish products i) Live finfish (WR fish live) ii) Chilled finfish in WR form (WR fish chilled) Feasibility Study on Organic Aquaculture 3
The analysis has two components: i) Organic aquaculture of black tiger shrimp, freshwater prawn and finfish varieties: This section of the analysis has been prepared based on data available from selected countries in the region, mainly focusing on the organic aquaculture practices prevailing in Thailand and Myanmar. Separate analyses were made for modified traditional and semi-intensive organic farming of black tiger shrimp similarly separate analyses were made for extensive fresh water prawn farming with supplementary stocking of fin fish and extensive fresh water fish with supplementary stocking of freshwater prawn. ii) Economic analysis on processing and packing of three organic black tiger shrimp products viz head-on shell-on (HOSO), headless shell-on (HLSO) and peeled pulled vein tail-on (PPVTO) for export with the target market being the member countries of the European Union. Analysis has also been undertaken for three freshwater prawn products (head-on shell-on freshwater prawn in live, chilled and frozen form) and whole round fin fish marketed domestically in live and fresh chilled form. Certain material factors such as, exchange rate fluctuations, export benefits and income tax on profit from export business need to be considered separately as per prevailing rules and regulations in the countries where the project has been undertaken. In this analysis, no export benefits have been taken into account for computing the analysis as they may vary from country to country. 4. PROJECT COST 4.1 Capital cost The capital cost involved for modified traditional farming of organic black tiger shrimp was US$ 30,700 which includes annual farm rent and farm development cost for the preparation of a 20 ha farm while in the case of the semiintensive culture method, it was US$ 308, 000 being the cost of land and US$ 30,800 for the farm development. In the case of the freshwater prawn and fresh water fish, the total capital cost involved is US$ 14,500, being farm rent (US$625/ha) and pond preparation (US$100/ha). The water spread area for culture was 16 ha, leaving 20% for bunding, construction of sluice etc. The variable costs involved are classified as farm maintenance, feed, seed, fuel/energy, farm management (salary and wages), certification charges, pond preparation charges, inputs (lime, organic fertilisers) and harvesting expenses. 4.2. Farm maintenance cost The farm maintenance cost of modified traditional organic shrimp farm consists of repairing expenses for sluice gate, nets and lighting equipments and is assumed as US$ 770. The farm maintenance cost of semi intensive organic shrimp farm includes maintenance cost of equipments such as pumps, aerators, feeding and 4 Feasibility Study on Organic Aquaculture
harvesting equipments, administrative expenses etc and based on actual figures is estimated as US$ 14610. The farm maintenance cost of extensive organic fresh water prawn and fresh water fish include maintenance cost of equipments such as pumps, feeding and harvesting equipments, administrative expenses etc and based on actual figures is estimated as US$ 3000. 4.3. Feed and seed cost All the feed and seed costs are calculated based on actual costs involved. 4.4. Fuel/Energy cost The fuel/energy costs for modified traditional organic shrimp farm include cost of electricity for lighting up the spot lights used for harvesting and the fuel cost of transporting harvested material to the buyer located about 5 km from the farm. The fuel/energy cost for modified traditional organic shrimp farm is estimated as US$ 250. The fuel/energy costs for semi intensive organic shrimp farm involves the cost of electricity for the operation of aerators, pumps, fuel expenses for vehicle for transporting inputs like feed, organic fertiliser, equipments and lime around the farm and based on actual figures is estimated as US$ 48 000. Cost of electricity/fuel for pumping estimated as US$ 1 800 are included as fuel/energy costs for extensive organic fresh water fish and fresh water prawn farm. 4.5. Farm management charges Expenses toward labour during the crop period and manager/technician are included under this item. For modified traditional organic shrimp farm, the owner is considered as the manager/technician and harvesting is conducted by 2 persons for about 4-5 hours on an average for 12 days a month during the crop period (11 months). Thus, the farm management charges which include the salary for the manager/ technician for one year and the labour charges for harvesting for modified traditional shrimp farm are estimated as US $ 8 400. The semi-intensive organic shrimp farm uses automated feeding and have 6 workers and one manager/technician at a cost of about US $ 250 (THB 8 000)/month/ worker and a salary of about US $ 950 (THB 30 000) for the manager/ technician. Hence, the total cost of salaries for semi-intensive organic shrimp farm is US$ 28 800. The extensive organic fresh water fish and fresh water prawn farm uses 10 workers at a cost of about US $ 200 ( THB 6 500) monthly salary and one manager/technician for about US $ 800 (THB 26 000) monthly salary. Hence the total farm management cost for extensive organic fresh water fish and fresh water prawn farm is calculated as US $ 33 600 each. 4.6. Certification charges, cost of inputs (lime, organic fertiliser, probiotics etc), pond preparation and harvesting expenses The harvesting expenses for modified traditional organic shrimp farm are included under the farm management charges. The organic certification charges are calculated based on actual travel expenses and allowances of two auditors and certification fee incurred for a farm in Thailand. The cost of inputs like lime (calcium carbonate), probiotics and organic fertiliser are based on actual figures. The Feasibility Study on Organic Aquaculture 5
cost of pond preparation calculated based on actual costs, include the cost of machinery and labour for dyke repair, fixing of nets, feeding equipments etc conducted once an year during the pond drying. 4.7. Processing and packing The processing and packing of the products from all the farming methods is assumed to be done as piecework on contract basis since maintaining a processing facility exclusively for the processing of organic produce would not be feasible. Accordingly, the processing cost of the various products has been calculated as below, taking into account prevailing overheads. D) Black tiger shrimp products i) Head-on shell-on (HOSO)... US$ 1.26 ii) Headless shell-on (HLSO)... US$ 1.45 iii) Peeled tail-on (PTO)... US$ 1.67 E) Fresh water prawn products iv) Head-on shell-on, in live form (Live FWP)... US$ 0.67 i) Head-on shell-on, in chilled form (Chilled FWP)... US$ 0.49 ii) Head-on shell-on, in frozen form (Fr HOSO FWP)... US$ 1.15 F) Finfish products i) Live (WR, live)... US$ 0.79 ii) Chilled, WR (WR F Chilled)... US$ 0.45 5. MEANS OF FINANCE Means of finance is calculated on a debt equity ratio of 3:1 as followed in the business. Interest on long term loan has been taken @ 12% per annum and the working capital loan @ 10%. The loan was repayable over a period of 5 years after a moratorium of 1 year. 6. PRODUCT COSTING 6.1 The selling prices computed were based on available price data for the most common variety and size of the products sold during the project period to European markets and in the domestic market. 6.2 Freight rates for standard frozen products are based on 40 ft containers (40 FCL). 6.3 Raw material cost for black tiger shrimp, freshwater prawn and finfish varieties at the farm were US$ 8.50, US$ 6 and US $ 1.20 respectively and yield has been calculated accordingly. US$ 0.10 per kg has been added to the raw material cost for meeting the 6 Feasibility Study on Organic Aquaculture
expenditure towards transportation charges from farm to processing plant, cost of ice and loading and unloading charges. Hence the raw material received at the processing facility would cost US$ 8.60, US$ 6.10 and US$ 1.30 respectively for black tiger, freshwater prawn and fish varieties. 6.4 The following yields of end product from a unit weight of raw material have been assumed for the products processed: A) Black tiger shrimp i) Head-on shell-on to head on shell-on (HOSO)... 98.00% ii) Head-on shell on to headless shell-on (HLSO)... 58.82% iii) Head-on shell-on to peeled tail-on (PTO)... 52.63% B) Freshwater prawn i) Head-on shell-on, in live form... 98% ii) Head-on shell-on, in chilled form... 98% iii) Head-on shell-on, in frozen form... 98% C) Finfish products i) Live... 98% ii) Chilled, WR... 98% 6.5 The variable labour charges involved are for casual labourers engaged for farm management and also for pond preparation, 6.6 Since there are various grades of black tiger shrimp, freshwater prawn and finfish varieties available from the farm, an assessment has been made for determining product grade. It is assumed that the average production of black tiger shrimp from the farm would consist of four grades, viz 20-30 gm size (25%), 30-40 gm size (40%), 40-50 gm size (25%) and 60-70 gm size (10%). Two grades of freshwater prawn, viz 50-80 gm (50%) and above 80 gm (50%), are recognized while finfish varieties range from 300-1,000 gm. Hence, average selling prices of US$ 23.04, 22.48 and 22.90 were taken for HOSO, HLSO and PPVTO black tiger shrimp, and for fresh water prawn, US$ 12.00, 9.00 and 7.50 for live, chilled and frozen forms, respectively. The average selling price for finfish varieties was taken as US$ 3.5 for live and US$ 2.5 for chilled whole round fish. Although exporting black tiger shrimp in HOSO would be much more remunerative than in HLSO and PPVTO form, a viable product mix ratio for processing and marketing has been considered as 65:35 (HOSO:HLSO) for final computation. 6.7 The variable cost of US$ 35,522 per annum has been allocated based on the production of 413 kg /ha of black tiger shrimp and 400 kg/ha of finfish through organic Feasibility Study on Organic Aquaculture 7
culture practices using modified traditional culture methods, while it is US$ 412,831 per annum for the production of 7,920 kg/ha of shrimp through the semi intensive organic culture method. In the case of freshwater prawn with supplementary stocking of finfish, the variable cost varies from US$ 123,013 for the production of 1,200 kg/ha of freshwater prawn and 450 kg/ha of finfish and for fresh water finfish with supplementary stocking of fresh water prawn, US$ 136,911 for producing 80 kg/ha of freshwater prawn and 5,700 kg/ha of finfish. A provision of 5% increase has been allocated to variable cost for the third, fourth and fifth year of operation to meet escalating expenses, as also with respect to production. The selling expenses, variable cost and fixed expenses for processing and export of 1 kg of organic black tiger shrimp have been worked out respectively at US$ 0.479, 0.472 and 0.313 for HOSO, US$ 0.502, 0.554 and 0.401 for HLSO and 0.554, 0.485 and 0.623 for PPVTO. In the case of freshwater prawn, the same was US$ 0.308, 0.230 and 0.136 for live freshwater prawn, US$ 0.283, 0.120 and 0.086 for chilled head-on shell-on freshwater prawn and US$ 0.458, 0.409 and 0.288 for frozen head-on freshwater prawn. The average selling expenses, variable cost and fixed expenses for processing finfish varieties were US$ 0.298, 0.210 and 0.252 for live finfish and US$ 0.366, 0.112 and 0.0728 for chilled finfish products. 7. WORKING CAPITAL The margin for working capital is estimated at 50% which would be availed from the bank as a loan. It has been assumed that no income tax is applicable, as is the case with 100% export oriented business in many developing countries in the region. 8. EXCHANGE RATE Exchange rate used is Thailand Baht 32.45 per US$. Figures given in the tables are in US Dollars unless otherwise specified. 8 Feasibility Study on Organic Aquaculture
9. FEASIBILITY OF A MODIFIED TRADITIONAL ORGANIC SHRIMP FARM Tarlochan Singh Feasibility Study on Organic Aquaculture 9
Table 1: Production Plan - Modified Traditional Organic Shrimp Culture Culture Details Item Quantity Water Spread Area 20 Hectare Pond Size 10 Hectare No. of Ponds 2 Culture Period 11 Months & 1 Month Drying Crop per Year 1 Main Species Cultured Peneaus monodon Other Species P. merguensis, Fish Mud Crab & Cockle Stocking Density 5 per sq.m PL Requirement (Pcs) 1 000 000 Total Feed Requirements (Kgs) 8 000 Organic Fertilizer (Bokashi) @ 50 L/ha/month 11 000 Harvest Details Survival at Harvest 25% Average Size at Harvest - Gms 33, Percentage of Large Sizes, 8-25 Count More - 30% Shrimp per Produced per Hectare (Kg) 413 Total Shrimp Production (Kg) 8 250 Fish Produced per Hectare (Kg) 400 Total Fish Production (Kg) 8 000 Feasibility Study on Organic Aquaculture 11
Table 2: Costing Details - Modified Traditional Organic Shrimp Farm Fixed Cost US$ Farm Rent @ US$ 925/ha 18 500 Farm Development @ US$ 610/ha 12 200 TOTAL 30 700 Variable Cost US$ Farm Maintenance 770 Feed (8 000 Kg @ US$ 1.73/Kg) 13 800 Seed (1 Million PL @ US$ 2.3/1 000 PL) 2 300 Fuel/Energy 250 Farm Management Charges (Salaries and Wages) 8 400 Certification Charges 5 802 Pond Preparation Charges 3 820 Inputs (Certified Probiotics) 380 TOTAL 35 522 Table 3: Production Kgs Value In US$ Shrimp @ 413 kg/ha and price US$ 8.5/Kg 8 260 70 210 Fin Fish @ 400 kg/ha and price US$ 1.2/Kg 8 000 9 600 TOTAL 16 260 79 810 Table 4: Profitability Item Year 1 Year 2 Year 3 Year 4 Year 5 Fixed Cost 30 700 32 235 33 847 35 539 37 316 Variable Cost 17 761 35 522 37 298 39 163 41 121 Total Cost 48 461 67 757 71 145 74 702 78 437 Annual Production 1) Shrimp 4 130 8 260 8 673 9 107 9 562 2) Fin Fish 4 000 8 000 8 400 8 820 9 261 Total Production in kgs 8 130 16 260 17 073 17 927 18 823 Income by Sales 39 905 79 810 83 801 87 991 92 390 NET INCOME - 8 556 12 053 12 656 13 288 13 953 12 Feasibility Study on Organic Aquaculture
Bank Loan (75% of Fixed Cost) Working Capital (50% of Variable Cost) Table 5: Repayment Schedule Item Year 1 Year 2 Year 3 Year 4 Year 5 23 025 17 761 Total 40 786 Principal Fixed Cost O/S 0 5 756 5 756 5 756 5 756 Principal Working Capital O/S 0 4 440 4 440 4 440 4 440 Interest on Loan Towards Fixed Cost @ 12% Interest on Loan Towards Working Capital @ 10% 2 763 2 072 1 382 691 691 1 776 1 332 888 444 444 Total Interest 4 539 3 404 2 270 1 135 1 135 REPAYMENT 4 539 13 601 12 466 11 331 11 331 Table 6: Bankability Bankability Year 1 Year2 Year 3 Year 4 Year 5 Gross Income 39 905 79 810 83 801 87 991 92 390 Less Variable Cost 17 761 35 522 37 298 39 163 41 121 Gross Surplus 22 144 44 288 46 502 48 828 51 269 Repayment 4 539 13 601 12 466 11 331 11 331 NET SURPLUS 17 605 30 687 34 036 37 496 39 938 Feasibility Study on Organic Aquaculture 13
Table 7: Cash Flow Statement Year Year 1 Year 2 Year 3 Year 4 Year 5 Operating Activities Cash Flow from Operations 22 144 44 288 46 502 48 828 51 269 Total from Operations 22 144 44 288 46 502 48 828 51 269 Financing Activities Share Capital 7 675 0 0 0 0 Long Term Loan 23 025 0 0 0 0 Working Capital 17 761 0 0 0 0 Repayment Principal 0-10 197-10 197-10 197-10 197 Interest - 4 539-3 404-2 270-1 135-1 135 Total Financing Activities 43 922-13 601-12 466-11 331-11 331 Investing Activities Total Investment - 43 922 0 0 0 0 Reserve for OPEX any 0 0 0 0 0 Total from Investing Activities - 43 922 0 0 0 0 Net Cash Flow 22 144 30 687 34 036 37 496 39 938 CUMULATIVE CASH FLOW 0 52 831 86 868 124 364 164 301 Table 8: Project IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Total Investment - 43 922 0 0 0 0 Free Cash Flow 22 144 44 288 46 502 48 828 51 269 Net Cash Flow - 21 778 44 288 46 502 48 828 51 269 Project IRR in % 206 % Discount Rate for NPV 12 % NPV AT 12% DISCOUNT RATE $109,038.18 Table 9: Equity IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Equity Investment - 7 675 0 0 0 0 Free Cash Flow 22 144 44 288 46 502 48 828 51 269 Debt Service (Principal + Interest) - 4 539-13 601-12 466-11 331-11 331 Net Cash Flow 9 930 30 687 34 036 37 496 39 938 NPV AT 12% DISCOUNT RATE $104,047.23 Discount Rate for NPV 12 % 14 Feasibility Study on Organic Aquaculture
Table 10: Product Costing Selling Price in US$ per kg HOSO HLSO PPVTO Chilled Fish Average Selling Price in US$ per kg 23.04 22.48 22.90 2.50 Price in Thai Baht @ 32.45 per US$ 747.57 729.31 743.11 81.13 Less Selling Expenses a) Freight 0.382 0.227 0.249 0.198 b) Cess & Taxes 0.000 0 0 0 c) Clearing and Forwarding 0.057 0.045 0.073 0.008 d) Post Shipment Finance 0.040 0.230 0.232 0.160 Total Selling Expenses 0.479 0.502 0.554 0.366 Net Sales Realisation 22.56 21.97 22.35 2.13 Variable Cost a) Raw Material Price 8.60 8.60 8.60 1.30 b) Yield in % 98.0 58.82 52.63 98.0 c) Adjusted Raw Material Cost 8.77 12.14 12.67 1.33 d) Freezing Charges 0.309 0.215 0.268 0 e) Packing Material 0.006 0.102 0.107 0.011 f) Consumable Stores 0.007 0.029 0.005 0.005 g) Labour Charges 0.032 0.070 0.045 0.063 h) Storage Charges 0.006 0.009 0.009 0.008 i) Others 0.112 0.129 0.051 0.025 Total Variable Cost 9.24 12.69 13.16 1.44 Contribution 13.32 9.28 9.19 0.69 Fixed Expenses a) Sallary & Allowances 0.003 0.076 0.153 0.006 b) Administrative Expenses 0.075 0.078 0.162 0.027 c) Electricity Charges Fixed Portion 0.013 0.023 0.043 0.007 d) Repairs & Maintenance 0.024 0.024 0.052 0.005 e) Interest on Term Loan 0.082 0.082 0.095 0.011 f) Interest on Working Capital 0.068 0.070 0.070 0.005 g) Depreciation 0.048 0.048 0.048 0.012 Total Fixed Overhead 0.313 0.401 0.623 0.073 NET PROFIT 13.00 8.88 8.57 0.62 Feasibility Study on Organic Aquaculture 15
Table 11: Conversion Details for Average Export Price Processed as HOSO HOSO Size Processed RM Price/kg Av. 30 gram size 25% 20/30 2 023.70 28.35 Av. 35 gram size 40% 30/40 3 237.92 24.45 Av. 45 gram size 25% 40/50 2 023.70 21.25 Av. 65 gram size 10% 60/70 809.48 18.10 Av. Price/kg 7 285.32 23.04 Total Selling Price for HOSO 167 835.56 Processed as HLSO HL Size Processed RM Price/kg Av. 30 gram size HO to HL - 8/12-10% 8/12 + 485.85 30.10 Av. 35 gram size HO to HL - 13/15-25% 13/15 1 214.63 22.90 Av. 45 gram size HO to HL - 16/20-40% 16/20 1 943.41 20.10 Av. 65 gram size HO to HL - 21/25-25% 21/25 1 214.63 16.80 Av. Price/kg 3 643.89 22.48 Total Selling Price for HLSO 81 896.63 Processed as PTO PPVTO Size Processed RM Price/kg Av. 30 gram size HO to PTO - 8/12-10% 13/15 434.72 27.40 Av. 35 gram size HO to PTO - 13/15-25% 16/20 1 086.81 24.40 Av. 45 gram size HO to PTO - 16/20-40% 21/25 1 738.90 21.50 Av. 65 gram size HO to PTO - 21/25-25% 26/30 1 086.81 18.30 Av. Price/kg 3 260.43 22.90 Total Selling Price for PPVTO 74 664 16 Feasibility Study on Organic Aquaculture
Table 12: Profit and Loss Account Item HOSO HLSO PPVTO Chilled Fish (in US$) Raw Material in kg 8 260 8 260 8 260 8 000 Yield % 98.0 58.82 52.63 98.0 Total Production & Sales Quantity in kg 7 285.32 3 643.89 3 260.43 7 840 Income Sales 167 835.56 81 896.63 74 663.81 19 600.00 Less Selling Expenses 3 489.67 1 829.24 1 806.28 2 869.44 Net Income 164 345.89 80 067.39 72 857.54 16 730.56 Expenditures Variable Expenses 67 330.93 46 255.65 42 890.94 11 305.28 Contribution 97 014.96 33 811.74 29 966.60 5 425.28 Fixed Expenses a) Sallary, Admin, Electricity, Repairs 837.81 732.42 1 336.78 352.80 b) Interest on Term Loan 597.40 298.80 309.74 86.24 c) Interest on Working Capital 495.40 255.07 228.23 39.2 d) Depreciation 349.70 174.91 174.91 94.08 Total Fixed Expenses 2 280.31 1 461.20 2 049.65 572.32 Profit Before Tax 94 734.66 32 350.54 27 916.94 4 852.96 Tax* 0.00 0.00 0.00 0.00 NET PROFIT 94 734.66 32 350.54 27 916.94 4 852.96 * Tax exempted for export Feasibility Study on Organic Aquaculture 17
Export Sales Item Table 13: Costing at 65:35 Ratio of Product Mix Grade Processed Weight (kg) Price/kg Value Chilled Fish HOSO 65% 20/30 2 023.70 28.35 57 371.90 30/40 3 237.92 24.45 79 167.144 HLSO 35% 8/12 + 485.85 30.10 14 624.18 13/15 1 214.63 22.90 27 815.10 Total 6 962.11 178 978.32 19 600.00 Less Selling Expenses 1 957.97 2 869.44 Net Income 177 020.35 16 730.56 Variable Expenses 1 279.39 11 305.28 Contribution 175 740.96 5 425.28 Fixed Expenses 1 014.79 572.32 Profit Before Tax 174 726.18 4 852.96 Tax* 0 0 Net Profit 174 726.18 4 852.96 TOTAL PROFIT AFTER TAX 179 579 * Tax exempted for export 18 Feasibility Study on Organic Aquaculture
Marketing of Organic Products Fatima Ferdouse Fatima Ferdouse Feasibility Study on Organic Aquaculture 19
10. FEASIBILITY OF A SEMI INTENSIVE ORGANIC SHRIMP FARM Tarlochan Singh Feasibility Study on Organic Aquaculture 21
Water Spread Area Pond Size Table 1: Production Plan - Semi Intensive Organic Shrimp Farm Item Culture Details Quantity 20 Hectare 0.5-1 Hectare No. of Ponds 22 Culture Period 8 Months during dry season & 7 months during wet season Crop per Year 1.2 Main Species Cultured Stocking Density Penaeus Monodon 30 pcs per sq.m (i.e. 15 per sq. m. for total area including reservoir, treatment pond, canals etc) PL Requirement 3,000,000 Feed Used Farm made organic feed, costs $1.2 per kg Feed Conversion Ratio 1.2 Feed Requirement per ha (Kg) 9 480 Total Feed Requirements (Kg) 94 800 Calcium Carbonate Total Requirement (Kg) 2 400 Harvest Details Survival at Harvest 80% Average Size at Harvest (Gm) 33 Production per Hectare (Kg) 7 920 Total Production per Crop (Kg) 79 200 Feasibility Study on Organic Aquaculture 23
Table 2: Costing Details of Semi Intensive Organic Shrimp Farm Fixed Cost US$ Land Cost @ US$ 15 400/ha 308 000 Farm Development @ US$ 1 540/ha 30 800 TOTAL 338 800 Variable Cost US$ Farm Maintenance 14 610 Feed Cost (189 600 kg @ US$ 1.2/kg) 227 520 Seed Cost (6 Million PL @ US$ 3.12/1 000PL) 18 720 Fuel/Energy 48 000 Farm Management Charges (Salary and Wages) 28 800 Certification Charges 20 516 Pond Preparation Charges 4 775 Inputs (Lime) 360 Harvesting Expenses 49 500 TOTAL 412 801 Table 3: Production In Kgs Value In US$ Shrimp @ 7 200 kg/ha - 1.2 Crop per Year, Price @ US$ 8.5/Kg 95 040 807 840 TOTAL 95 040 807 840 Table 4: Profitability Item Year 1 Year 2 Year 3 Year 4 Year 5 Fixed Cost 338 800 0 0 0 0 Variable Cost 206 416 412 831 433 473 455 146 477 903 Total Cost 545 216 412 831 433 473 155 146 477 903 Annual Production 1) Shrimp 47 520 95 040 99 792 104 782 110 021 Total Production (Kg) 47 520 95 040 99 792 104 782 110 021 Income by Sales 403 920 807 840 848 232 890 644 935 176 NET INCOME - 141 281 395 039 414 791 435 530 457 307 24 Feasibility Study on Organic Aquaculture
Bank Loan (75% of Fixed Cost) Working Capital (50% of Variable Cost) Table 5: Repayment Schedule Item Year 1 Year 2 Year 3 Year 4 Year 5 254 100 206 401 Total 460 501 Principal Fixed Cost O/S 0 63 525 63 525 63 525 63 525 Principal Working Capital O/S 0 51 600 51 600 51 600 51 600 Interest on Loan Towards Fixed Cost @ 12% Interest on Loan Towards Working Capital @ 10% 30 492 22 869 15 246 7 623 7 623 20 640 15 480 10 320 5 160 5 160 Total Interest 51 132 38 349 25 566 12 783 12 783 REPAYMENT 51 132 153 474 140 691 127 908 127 908 Table 6: Bankability Item Year 1 Year2 Year 3 Year 4 Year 5 Gross Income 403 920 807 840 848 232 890 644 935 176 Less Variable Cost 206 401 412 801 433 441 455 113 477 869 Gross Surplus 197 520 395 039 414 791 435 530 457 307 Repayment 51 132 153 474 140 691 127 908 127 908 NET SURPLUS 146 387 241 565 274 100 307 622 329 399 Feasibility Study on Organic Aquaculture 25
Table 7: Cash Flow Statement Year Year 1 Year 2 Year 3 Year 4 Year 5 Operating Activities Cash Flow from Operations 197 520 395 039 414 791 435 530 457 307 Total from Operations 197 520 395 039 414 791 435 530 457 307 Financing Activities Share Capital 84 700 0 0 0 0 Long Term Loan 254 100 0 0 0 0 Working Capital 206 416 0 0 0 0 Repayment Principal 0-115 129-115 129-115 129-115 129 Interest - 51 134-38 350-25 567-12 783-12 783 Total Financing Activities 494 082-153 479-140 696-127 912-127 912 Investing Activities Total Investment - 494 068 0 0 0 0 Reserve for OPEX any 0 0 0 0 0 Total from Investing Activities - 494 068 0 0 0 0 Net Cash Flow 197 520 241 565 274 100 307 622 329 399 CUMULATIVE CASH FLOW 0 439 084 713 184 1 020 806 1 350 205 Table 8: Project IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Total Investment - 494 082 0 0 0 0 Free Cash Flow 197 520 395 039 414 791 435 530 457 307 Net Cash Flow - 296 549 395 039 414 791 435 530 457 307 Project IRR in % 133 % Discount Rate for NPV 12 % NPV AT 12% DISCOUNT RATE $881,663 Table 9: Equity IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Equity Investment - 84 700 0 0 0 0 Free Cash Flow 197 520 395 039 414 791 435 530 457 307 Debt Service (Principal + Interest) - 51 134-153 474-140 691-127 908-127 908 Net Cash Flow 61 687 241 565 274 100 307 622 329 399 NPV AT 12% DISCOUNT RATE $825,160 Discount Rate for NPV 12 % 26 Feasibility Study on Organic Aquaculture
Table 10: Product Costing Selling Price in US$ per kg HOSO HLSO PPVTO Average Selling Price in US$ per kg 23.04 22.48 22.90 Price in Thai Baht @ 32.45 per US$ 772.31 647.05 695.73 Less Selling Expenses a) Freight 0.382 0.227 0.249 b) Cess & Taxes 0 0 0 c) Clearing and Forwarding 0.057 0.045 0.073 d) Post Shipment Finance 0.040 0.230 0.232 Total Selling Expenses 0.479 0.502 0.554 Net Sales Realisation 22.56 21.97 22.35 Variable Cost a) Raw Material Price 8.60 8.60 8.60 b) Yield in % 98.0 58.82 52.63 c) Adjusted Raw Material Cost 8.77 12.14 12.67 d) Freezing Charges 0.309 0.215 0.268 e) Packing Material 0.006 0.102 0.107 f) Consumable Stores 0.007 0.029 0.005 g) Labour Charges 0.032 0.070 0.045 h) Storage Charges 0.006 0.009 0.009 i) Others 0.112 0.129 0.051 Total Variable Cost 9.24 12.69 13.16 Contribution 13.32 9.28 9.19 Fixed Expenses a) Sallary & Allowances 0.003 0.076 0.153 b) Administrative Expenses 0.075 0.078 0.162 c) Electricity Charges Fixed Portion 0.013 0.023 0.043 d) Repairs & Maintenance 0.024 0.024 0.052 e) Interest on Term Loan 0.082 0.082 0.095 f) Interest on Working Capital 0.068 0.070 0.070 g) Depreciation 0.048 0.048 0.048 Total Fixed Overhead 0.313 0.401 0.623 NET PROFIT 13.00 8.88 8.57 Feasibility Study on Organic Aquaculture 27
Table 11: Conversion Details for Average Export Price Processed as HOSO HOSO Size Processed RM Price/kg Av. 30 gram size 25% 20/30 23 284.80 28.35 Av. 35 gram size 40% 30/40 37 255.70 24.45 Av. 45 gram size 25% 40/50 23 284.80 21.25 Av. 65 gram size 10% 60/70 9 313.90 18.10 Av. Price/kg 93 139.20 23.04 Total Selling Price for HOSO 2 145 694 Processed as HLSO HL Size Processed RM Price/kg Av. 30 gram size HO to HL - 8/12-10% 8/12 + 5 590.25 30.10 Av. 35 gram size HO to HL - 13/15-25% 13/15 13 975.63 22.90 Av. 45 gram size HO to HL - 16/20-40% 16/20 22 361.01 20.10 Av. 65 gram size HO to HL - 21/25-25% 21/25 13 975.63 16.80 Av. Price/kg 55 902.50 22.48 Total Selling Price for HLSO 1 256 409 Processed as PTO PPVTO Size Processed RM Price/kg Av. 30 gram size HO to PTO - 8/12-10% 13/15 5 001.96 27.40 Av. 35 gram size HO to PTO - 13/15-25% 16/20 12 504.89 24.40 Av. 45 gram size HO to PTO - 16/20-40% 21/25 20 007.82 21.50 Av. 65 gram size HO to PTO - 21/25-25% 26/30 12 504.89 18.30 Av. Price/kg 45 017.60 22.90 Total Selling Price for PPVTO 1 030 903 28 Feasibility Study on Organic Aquaculture
Table 12: Profit and Loss Account Item HOSO HLSO PPVTO (in US$) Raw Material in kg 95 040 95 040 95 040 Yield % 98.0 58.82 52.63 Total Production & Sales Quantity in kg 93 139.2 55 903 50 020 Income Sales 2 145 694.32 1 256 409.32 1 145 447.74 Less Selling Expenses 44 613.68 28 063.07 27 710.83 Net Income 2 101 080.64 1 228 346.25 1 117 736.91 Expenditures Variable Expenses 860 792.49 709 626.69 658 007.21 Contribution 1 240 288.16 518 719.56 459 729.70 Fixed Expenses a) Salary, Admin, Electricity, Repairs 10 711.01 11 236.41 20 508.02 b) Interest on Term Loan 7 637.41 4 584.01 4 751.86 c) Interest on Working Capital 6 333.47 3 913.18 3 501.37 d) Depreciation 4 470.68 2 683.32 2 683.32 Total Fixed Expenses 29 152.57 22 416.91 31 444.56 Profit Before Tax 1 211 135.59 496 302.64 428 285.14 Tax* 0.00 0.00 0.00 NET PROFIT 1 211 135.59 496 302.64 428 285.14 * Tax exempted for export Feasibility Study on Organic Aquaculture 29
Export Sales Table 13: Costing at 70:30 Ratio of Product Mix Grade Processed Weight (kg) Price/kg Value HOSO 65% 20/30 23 284.80 28.35 660 124.08 30/40 37 255.68 24.45 910 901.38 HLSO 35% 8/12 + 5 590.25 30.10 168 266.61 13/15 13 975.63 22.90 320 041.97 Total 66 130.73 1 739 292.07 Less Selling Expenses 35 425.62 Net Income 1 703 866.45 Variable Expenses 13 058.03 Contribution 1 690 808.41 Fixed Expenses 9 540.49 Profit Before Tax 1 681 267.92 Tax* 0 TOTAL PROFIT AFTER TAX 1 681 267.92 * Tax exempted for export 30 Feasibility Study on Organic Aquaculture
11. FEASIBILITY OF AN EXTENSIVE ORGANIC FRESHWATER PRAWN FARM Tarlochan Singh Feasibility Study on Organic Aquaculture 31
Water Spread Area Pond Size Table 1: Production Plan - Extensive Organic Fresh Water Prawn Farm Item Culture Details Quantity 20 Hectare 1-4 Ha Number of Ponds 10 Culture Period 10 Months - 2 Months Nursery Rearing and 8 Months Culture Crop per Year 1.2 Main Species Cultured Other Species Cultured Fresh Water Prawn Stocking Density-grow Out Fresh Water Prawn Juvenile Requirement Fish Stocking Density - Grow Out Fish Fingerling Requirement Feed Used Fresh Water Prawn (Macrobrachium rosenbergii) 3 Species of Fish - Silver Barb, Common Carp and Tilapia 3 per sq.m 600 000 pcs 0.05 pcs per sq.m 10 000 pcs Farm Made Organic Feed, Costs $0.65 per kg Feed Conversion Ratio 2.5 Feed Requirement (Kg) Organic Fertilizer (Kg) Calcium Carbonate (Kg) Harvest Details 82,500 Kgs @ 4 125 per Hectare 15,500 Kg @ 75 kg per Month per Hectare 15,500 Kg @ 75 kg per Month per Hectare Grow Out Survival at Harvest - Fresh Water Prawn 80% Grow Out Survival at Harvest - Fish 90% Average Size at Harvest - Fresh Water Prawn Average Size at Harvest - Fish Production - Fresh Water Prawn (Kg) Production - Fish (Kg) Total Production (Kg) 50 gm 1 kg 24,000 kg @ 1,200 kg per ha 9,000 kg @ 450 kg per ha 33,000 kg Feasibility Study on Organic Aquaculture 33
Table 2: Costing Details - Extensive Organic Fresh Water Prawn Farm Fixed Cost Land Lease @ US$ 625/ha 12 500 Pond Renovation @ US$ 100/ha 2 000 US$ TOTAL 14 500 Variable Cost Farm Maintenance 3 000 Seed Cost (Fresh Water Prawn @ US$ 0.03/Juvenile and Fish Seed @ US $ 0.06/fingerling) US$ 24 200 Feed Cost (Farm Made Feed @ US$ 0.65/Kg) 53 625 Fuel/Energy 1 800 Farm Management Charges (Salary and Wages) 33 600 Certification Charges 6 258 Inputs (Lime and Fertilizer) 1 980 Pond Preparation Charges 4 400 Harvesting Expenses 6 300 TOTAL 135 163 Table 3: Production Details In Kgs Value In US$ Freshwater Prawn @ 1 200 kg/ha - 1.2 Crop per Year, Price US$ 6/Kg 28 800 172 800 Fish @ 450 kg/ha, Price US$ 1.2/Kg 10 800 12 960 TOTAL 39 600 185 760 Table 4: Profitability Item Year 1 Year 2 Year 3 Year 4 Year 5 Fixed Cost 7 250 14 500 15 225 15 986 16 786 Variable Cost 67 582 135 163 141 921 149 017 156 468 Total Cost 74 832 149 663 157 146 165 003 173 254 Annual Production in Kg 1) Fish (in kg) 5 400 10 800 11 340 11 907 12 502 2) Freshwater Prawn (in kg) 14 400 28 800 30 240 31 752 33 340 Total Production (in kg) 19 800 39 600 41 580 43 659 45 842 Income by Sales 92 880 185 760 195 048 204 800 215 040 NET INCOME 18 049 36 097 37 902 39 797 41 787 34 Feasibility Study on Organic Aquaculture
Bank Loan (75% of Fixed Cost) Working Capital (50% of Variable Cost) Table 5: Repayment Schedule Item Year 1 Year 2 Year 3 Year 4 Year 5 10 875 0 0 0 0 67 582 0 0 0 0 Total 78 457 0 0 0 0 Principal Fixed Cost O/S 0 2 718.75 2 718.75 2 718.75 2 718.75 Principal Working Capital O/S 0 16 895 16 895 16 895 16 895 Interest on Loan Towards Fixed Cost @ 12% p.a Interest on Loan Towards Working Capital @ 10% p.a 1 305 979 653 326 326 6 758 5 069 3 379 1 690 1 690 Total Interest 8 063 6 047 4 032 2 016 2 016 REPAYMENT 8 063 25 661 23 646 21 630 21 630 Table 6: Bankability Item Year 1 Year2 Year 3 Year 4 Year 5 Gross Income 92 880 185 760 195 048 204 800 215 040 Less Variable Cost 67 582 135 163 141 921 149 017 156 468 Gross Surplus 25 299 50 597 53 127 55 783 58 572 Repayment 8 063 25 661 23 646 21 630 21 630 NET SURPLUS 17 235 24 936 29 481 34 153 36 942 Inspecting harvested live fresh water prawn held in a net on enclosure. Fatima Ferdouse Feasibility Study on Organic Aquaculture 35
Table 7: Cash Flow Statement Year Year 1 Year 2 Year 3 Year 4 Year 5 Operating Activities Cash Flow from Operations 25 299 50 597 53 127 55 783 58 572 Total from Operations 25 299 50 597 53 127 55 783 58 572 Financing Activities Share Capital 3 625 0 0 0 0 Long Term Loan 10 875 0 0 0 0 Working Capital 67 582 0 0 0 0 Repayment Principal 0-19 614-19 614-19 614-19 614 Interest - 8 063-6 047-4 032-2 016-2 016 Total Financing Activities 74 018-25 661-23 646-21 630-21 630 Investing Activities Total Investment - 74 018 0 0 0 0 Reserve for OPEX any 0 0 0 0 0 Total from Investing Activities - 74 018 0 0 0 0 Net Cash Flow 25 299 76 258 76 773 77 413 80 202 CUMULATIVE CASH FLOW 0 101 557 178 330 255 743 335 945 Table 8: Project IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Total Investment - 74 018 0 0 0 0 Free Cash Flow 25 299 50 597 53 127 55 783 58 572 Net Cash Flow - 48 719.9 50 597 53 127 55 783 58 572 Project IRR in % 101 % Discount Rate for NPV 12 % NPV AT 12% DISCOUNT RATE $103,337 Table 9: Equity IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Equity Investment - 3 625 0 0 0 0 Free Cash Flow 25 299 50 597 53 127 55 783 58 572 Debt Service (Principal + Interest) 8 063 25 661 23 646 21 630 21 630 Net Cash Flow 29 737 76 258 76 773 77 413 80 202 NPV AT 12% DISCOUNT RATE $236,695 Discount Rate for NPV 12 % 36 Feasibility Study on Organic Aquaculture
Table 10: Product Costing Selling Price in US$ per kg Live FWP Chilled FWP Fr. HOSO FWP WR Fish Live WR F Chilled Average Selling Price in US$ per kg 12.00 9.00 7.50 3.50 2.50 Price in Thai Baht @ 32.45 per US$ 389.40 292.05 243.38 113.58 81.13 Less Selling Expenses a) Freight 0.2930 0.2470 0.3800 0.2830 0.198 b) Cess & Taxes 0.0 0.0 0.0 0.0 0.0 c) Clearing and Forwarding 0.0109 0.0243 0.0550 0.0109 0.008 d) Post Shipment Finance 0.0040 0.0120 0.0230 0.0040 0.16 Total Selling Expenses 0.3079 0.2833 0.4580 0.2979 0.366 Net Sales Realisation 11.69 8.72 7.04 3.20 2.134 Variable Cost a) Raw Material Price 6.10 6.10 6.10 1.30 1.30 b) Yield in % 98.0 98.0 98.0 98.0 98.0 c) Adjusted Raw Material Cost 6.22 6.22 6.22 1.33 1.33 d) Freezing Charges 0.00 0.00 0.287 0.00 0.00 e) Packing Material 0.065 0.102 0.005 0.042 0.011 f) Consumable Stores 0.007 0.006 0.004 0.008 0.005 g) Labour Charges 0.032 0.065 0.012 0.033 0.063 h) Storage Charges 0.020 0.009 0.006 0.02 0.008 i) Others 0.110 0.024 0.095 0.11 0.025 Total Variable Cost 6.45 6.34 6.629 1.54 1.442 Contribution 5.24 2.38 0.41 1.66 0.692 Fixed Expenses a) Salary & Allowances 0.0328 0.007 0.003 0.061 0.006 b) Administrative Expenses 0.0164 0.037 0.074 0.044 0.027 c) Electricity Charges Fixed Portion 0.011 0.0067 0.013 0.014 0.007 d) Repairs & Maintenance 0.0438 0.0052 0.024 0.024 0.005 e) Interest on Term Loan 0.017 0.012 0.072 0.09 0.011 f) Interest on Working Capital 0.015 0.006 0.060 0.008 0.005 g) Depreciation 0.0 0.0121 0.042 0.0 0.012 Total Fixed Overhead 0.136 0.086 0.288 0.252 0.073 NET PROFIT 5.10 2.29 0.13 1.41 0.619 Feasibility Study on Organic Aquaculture 37
Table 11: Conversion Details for Average Export Price Processed as HOSO Live Live FWP Processed RM* Price/kg 80 g above - 50% 14 400 14 112.00 12.00 50-80 g - 50% 14 400 14 112.00 10.00 Total 28 800 28 224.00 Av. Price/kg 11.00 Total Selling Price 310 464 Processed as HOSO Chilled HOSO Size Processed RM Price/kg 80 g above - 50% 14 400 14 112.00 9.00 50-80 g - 50% 14 400 14 112.00 7.00 Total 28 800 28 224.00 Av. Price/kg 8.00 Total Selling Price 225 792 Processed as HOSO Frozen HOSO Size Processed RM Price/kg 80 g above - 50% 14 400 14 112.00 7.50 50-80 g - 50% 14 400 14 112.00 6.50 Total 28 800 28 224.00 Av. Price/kg 7.00 Total Selling Price 197 568 * Raw Material 38 Feasibility Study on Organic Aquaculture
(in US$) Table 12: Profit and Loss Account Item Live FWP Chilled FWP Fr. HOSO FWP WR Fish Live WR F Chilled Raw Material in kg 28 800 28 800 28 800 10 800 10 800 Yield % 98.0 98.0 98.0 98.0 98.0 Total Production & Sales Quantity in kg 28 224 28 224 28 224 10 584 10 584 Income Sales 338 668 254 016 211 680 37 044 37 044 Less Selling Expenses 8 690 7 996 12 927 3 153 3 153 Net Income 329 998 246 020 198 753 33 891 33 891 Expenditures Variable Expenses 182 155 178 827 187 097 16 331 16 331 Contribution 147 842.96 67 192.88 11 656.51 17 559.91 17 559.91 Fixed Expenses a) Sallary, Admin, Electricity, Repairs 2 935.30 1 577.72 3 217.5 1 513.51 1 513.51 b) Interest on Term Loan 479.81 338.69 2 032.1 952.56 952.56 c) Interest on Working Capital 423.36 169.34 1 693.4 84.67 84.67 d) Depreciation 0.00 341.51 1 185.4 116.42 127.01 Total Fixed Expenses 3 838.46 2 427.26 8 128.5 2 667.17 2 677.75 Profit Before Tax 144 004 64 766 3 528 14 893 14 882 Tax* 0 0 0 0 0 NET PROFIT 144 004.49 64 765.61 3 528.00 14 892.75 14 882.16 * Tax exempted for export Feasibility Study on Organic Aquaculture 39
Table 13: Costing at 80:20 Ratio of Product Mix Grade Processed WT Price/kg Value GG Fish Export Sales HOSO Live 20% 80 g above 5 760.00 9.00 51 840.00 HOSO Chilled 80% 50-80 gram 23 040.00 8.00 184 320.00 Total 28 800.00 236 160.00 37 044.00 Less Selling Expenses 8 159.04 3 152.97 Net Income 228 000.96 33 891.03 Variable Expenses 3 349.30 16 331.11 Contribution 224 651.66 17 559.91 Fixed Expenses 539.74 2 677.75 Profit 224 111.93 14 882.16 Tax* 0 0 Net Profit 224 111.93 14 882.16 TOTAL PROFIT AFTER TAX 238 994.09 * Tax exempted for export 40 Feasibility Study on Organic Aquaculture
Harvesting and Marketing of Live Organic Freshwater Prawns in Myanmar Tarlochan Singh Feasibility Study on Organic Aquaculture 41
12. FEASIBILITY OF AN EXTENSIVE ORGANIC FRESHWATER FISH FARM Feasibility Study on Organic Aquaculture 43
Water Spread Area Pond Size Table 1: Production Plan - Extensive Organic Fresh Water Fish Farm Item Culture Details Quantity 20 Hectare 1-4 Ha No. of Ponds 10 Culture Period 10 Months - 2 Months Nursery Rearing and 8 Months Culture Crop per Year 1.2 Main Species Cultured Other Species Cultured Average Stocking Density of Fish - Grow Out Fish Seed Requirement Fresh Water Prawn Stocking Density-grow Out Fresh Water Prawn Juvenile Requirement Feed Used 3 Species of Fish - Tilapia, Silver Barb and Common Carp Fresh Water Prawn (Macrobrachium rosenbergii) 0.6 pcs per sq.m 126,000 pcs 0.13 pcs per sq.m 25,000 pcs Farm Made Organic Feed, Costs $0.25 per kg Feed Conversion Ratio 2.5 Feed Requirement (Kg) Organic Fertilizer (Kg) Calcium Carbonate (Kg) Harvest Details 289,000 Kg @ 14,450 kg per Hectare 15,500 Kg @ 75 kg per Hectare per Month 15,500 Kg @ 75 kg per Hectare per Month Grow Out Survival at Harvest - Fish 90% Average Size at Harvest - Fish (Kg) 1 Grow Out Survival at Harvest - Fresh Water Prawn 80% Average Size at Harvest - Fresh Water Prawn (gm) 80 Production - Fresh Water Prawn (Kg) Production - Fish (Kg) Total Production (Kg) 1,600 kg @ 80 Kg per ha 114,000 kg @ 5 700 Kg per ha 115,600 kg Feasibility Study on Organic Aquaculture 45
Table 2: Costing Details - Extensive Organic Fresh Water Fish Farm Fixed Cost US$ Land Lease @ US$ 625/ha 12 500 Farm Renovation @ US$ 100/ha 2 000 TOTAL 14 500 Variable Cost US$ Farm Maintenance 3 000 Seed (25 000 Fresh Water Prawn @ US$ 0.04/Juvenile and 126 000 Fish Fingerling @0.06 /seed) 8 560 Feed 72 250 Fuel/Energy 1 800 Farm Management Charges (Salary and Wages) 33 600 Certification Charges 5 021 Inputs (Lime and Fertilizer) 1 980 Pond Preparation Charges 4 400 Harvesting Expenses 6 300 TOTAL 136 911 Table 3: Production Item In Kgs Value In US$ Fish @ 5 700 kg/ha - 1.2 Crop per Year, price @ US$ 1.2/kg 136 800 164 160 Freshwater Prawn @ 80 kg/ha - 1.2 crop per Year, price @ US$ 6/kg 1 920 11 520 TOTAL 138 720 175 680 Table 4: Profitability Item Year 1 Year 2 Year 3 Year 4 Year 5 Fixed Cost 7 250 14 500 15 225 15 986 16 786 Variable Cost 68 456 136 911 143 757 150 944 158 492 Total Cost 75 706 151 411 158 982 166 931 175 277 Annual Production in Kg 1) Fish (in kg) 68 400 136 800 143 640 150 822 158 363 2) Freshwater Prawn (in Kg) 960 1 920 2 016 2 117 2 223 Total Production (in Kg) 69 360 138 720 145 656 152 939 160 586 Income by Sales 87 840 175 680 184 464 193 687 203 372 NET INCOME 12 135 24 269 25 482 26 757 28 094 46 Feasibility Study on Organic Aquaculture
Bank Loan (75% of Fixed Cost) Working Capital (50% of Variable Cost) Table 5: Repayment Schedule Item Year 1 Year 2 Year 3 Year 4 Year 5 10 875 0 0 0 0 68 456 0 0 0 0 Total 79 331 0 0 0 0 Principal Fixed Cost O/S 0 2 718.75 2 718.75 2 718.75 2 718.75 Principal Working Capital O/S 0 17 114 17 114 17 114 17 114 Interest on Loan Towards Fixed Cost @ 12% p.a Interest on Loan Towards Working Capital @ 10% p.a 1 305 979 653 326 326 6 846 5 134 3 423 1 711 1 711 Total Interest 8 151 6 113 4 075 2 038 2 038 REPAYMENT 8 151 25 946 23 908 21 870 21 870 Table 6: Bankability Item Year 1 Year2 Year 3 Year 4 Year 5 Gross Income 87 840 175 680 184 464 193 687 203 372 Less Variable Cost 68 456 136 911 143 757 150 944 158 492 Gross Surplus 19 385 38 769 40 707 42 743 44 880 Repayment 8 151 25 946 23 908 21 870 21 870 NET SURPLUS 11 234 12 823 16 800 20 873 23 010 Feasibility Study on Organic Aquaculture 47
Table 7: Cash Flow Statement Year Year 1 Year 2 Year 3 Year 4 Year 5 Operating Activities Cash Flow from Operations 19 385 38 769 40 707 42 743 44 880 Total from Operations 19 385 38 769 40 707 42 743 44 880 Financing Activities Share Capital 3 625 0 0 0 0 Long Term Loan 10 875 0 0 0 0 Working Capital 68 456 0 0 0 0 Repayment Principal 0-19 833-19 833-19 833-19 833 Interest - 8 151-6 113-4 075-2 038-2 038 Total Financing Activities 74 805-25 946-23 908-21 870-21 870 Investing Activities Total Investment - 74 805 0 0 0 0 Reserve for OPEX any 0 0 0 0 0 Total from Investing Activities - 74 805 0 0 0 0 Net Cash Flow 19 385 64 715 64 615 64 613 66 750 CUMULATIVE CASH FLOW 0 84 099 148 714 213 327 280 078 Table 8: Project IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Total Investment - 74 805 0 0 0 0 Free Cash Flow 19 385 38 769 40 707 42 743 44 880 Net Cash Flow - 55 420.5 38 769 40 707 42 743 44 880 Project IRR in % 63 % Discount Rate for NPV 12 % NPV AT 12% DISCOUNT RATE $63,029 Table 9: Equity IRR Year Year 1 Year2 Year 3 Year 4 Year 5 Equity Investment - 3 625 0 0 0 0 Free Cash Flow 19 385 38 769 40 707 42 743 44 880 Debt Service (Principal + Interest) - 8 151-25 946-23 908-21 870-21 870 Net Cash Flow 7 609 12 823 16 800 20 873 23 010 NPV AT 12% DISCOUNT RATE $55,295 Discount Rate for NPV 12 % 48 Feasibility Study on Organic Aquaculture
Table 10: Product Costing Selling Price in US$ per kg Live FWP Chilled FWP Fr. HOSO FWP WR Fish Live WR F Chilled Average Selling Price in US$ per kg 12.00 9.00 7.50 3.50 2.50 Price in Thai Baht @ 32.45 per US$ 389.40 292.05 243.38 113.58 81.13 Less Selling Expenses a) Freight 0.2930 0.2470 0.3800 0.2830 0.198 b) Cess & Taxes 0.0 0.0 0.0 0.0 0.0 c) Clearing and Forwarding 0.0109 0.0243 0.0550 0.0109 0.008 d) Post Shipment Finance 0.0040 0.0120 0.0230 0.0040 0.16 Total Selling Expenses 0.3079 0.2833 0.4580 0.2979 0.366 Net Sales Realisation 11.69 8.72 7.04 3.20 2.134 Variable Cost a) Raw Material Price 6.10 6.10 6.10 1.30 1.30 b) Yield in % 98.0 98.0 98.0 98.0 98.0 c) Adjusted Raw Material Cost 6.22 6.22 6.22 1.33 1.33 d) Freezing Charges 0.00 0.00 0.287 0.00 0.00 e) Packing Material 0.065 0.102 0.005 0.042 0.011 f) Consumable Stores 0.007 0.006 0.004 0.008 0.005 g) Labour Charges 0.032 0.065 0.012 0.033 0.063 h) Storage Charges 0.020 0.009 0.006 0.02 0.008 i) Others 0.110 0.024 0.095 0.11 0.025 Total Variable Cost 6.45 6.34 6.629 1.54 1.442 Contribution 5.24 2.38 0.41 1.66 0.692 Fixed Expenses a) Salary & Allowances 0.0328 0.007 0.003 0.061 0.006 b) Administrative Expenses 0.0164 0.037 0.074 0.044 0.027 c) Electricity Charges Fixed Portion 0.011 0.0067 0.013 0.014 0.0065 d) Repairs & Maintenance 0.0438 0.0052 0.024 0.024 0.0053 e) Interest on Term Loan 0.017 0.012 0.072 0.09 0.011 f) Interest on Working Capital 0.015 0.006 0.060 0.008 0.005 g) Depreciation 0.0 0.0121 0.042 0.0 0.012 Total Fixed Overhead 0.136 0.086 0.288 0.252 0.0728 NET PROFIT 5.10 2.29 0.13 1.41 0.62 Feasibility Study on Organic Aquaculture 49
Table 11: Conversion Details for Average Export Price Processed as HOSO Live Live FWP Processed RM* Price/kg 80 g above - 50% 960 940.80 12.00 50-80 g - 50% 960 940.80 10.00 Total 1 920 1 881.60 Av. Price/kg 11.00 Total Selling Price 20 697.6 Processed as HOSO Chilled HOSO Size Processed RM Price/kg 80 g above - 50% 960 940.80 9.00 50-80 g - 50% 960 940.80 7.00 Total 1 920 1 881.60 Av. Price/kg 8.00 Total Selling Price 15 052.8 Processed as HOSO Frozen HOSO Size Processed RM Price/kg 80 g above - 50% 960 940.80 7.50 50-80 g - 50% 960 940.80 6.50 Total 1 920 1 881.60 Av. Price/kg 7.00 Total Selling Price 13 171.2 *Raw Material 50 Feasibility Study on Organic Aquaculture
(in US$) Table 12: Profit and Loss Account Item Live FWP Chilled FWP Fr. HOSO FWP WR Fish Live WR F Chilled Raw Material in kg 1 920 1 920 1 920 136 800 136 800 Yield % 98.0 98.0 98.0 98.0 98.0 Total Production & Sales Quantity in kg 1 881.6 1 881.6 1 881.6 134 064 134 064 Income Sales 22 579 16 934 14 112 469 224 335 160 Less Selling Expenses 579 533 862 39 938 39 938 Net Income 22 000 16 401 13 250 429 286 295 222 Expenditures Variable Expenses 12 144 11 922 12 473 206 861 206 861 Contribution 9 856.20 4 479.53 777.10 222 425.58 222 425.58 Fixed Expenses a) Sallary, Admin, Electricity, Repairs 195.69 105.18 214.5 19 171.15 19 171.15 b) Interest on Term Loan 31.99 22.58 135.5 12 065.76 12 065.76 c) Interest on Working Capital 28.22 11.29 112.9 1 072.51 1 072.51 d) Depreciation 0.00 22.77 79.0 1 474.70 1 608.77 Total Fixed Expenses 255.90 161.82 541.9 33 784.13 33 918.19 Profit Before Tax 9 600.30 4 317.71 235.20 188 641.45 188 507.39 Tax* 0 0 0 0 0 NET PROFIT 9 600.30 4 317.71 235.20 188 641.45 188 507.39 * Tax exempted for export Feasibility Study on Organic Aquaculture 51
Table 13: Costing at 80:20 Ratio of Product Mix Grade Processed WT Price/kg Value GG Fish Export Sales HOSO Live 20% 80 g above 384.00 9.00 3 456.00 HOSO Chilled 80% 50-80 gram 1 536.00 8.00 12 288.00 Total 1 920.00 15 744.00 335 160.00 Less Selling Expenses 543.94 39 937.67 Net Income 15 200.06 295 222.33 Variable Expenses 370.99 206 860.75 Contribution 14 829.07 222 425.58 Fixed Expenses 77.40 33 918.19 Profit 14 751.67 188 507.39 Tax* 0 0 Net Profit 14 751.67 188 507.39 TOTAL PROFIT AFTER TAX 203 259.06 * Tax exempted for export 52 Feasibility Study on Organic Aquaculture
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