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PART I
1.0 Executive Summary
1.1 The following report and recommendation relate to the proposal by Carousel Fish Farm
to establish a Fishery at No 9 Park Avenue, G.R.A Enugu.
1.2 The project will require a start-up capital of N3,160,000, made up of N2,450,000 for
fixed assets and N710,000 for working capital.
1.3 The vision of the enterprise is to be the most outstanding and leading catfish producer
in South-East of Nigeria, and indeed the whole country.
1.4 The farm is located at Enugu because of its proximity to our target market and its
closeness to our sources of feed for the fisheries
1.5 A huge market exists for the business to serve. They include but not limited to
Households, Individuals, Hotels, Restaurants, Fast food eateries and Agriculture
merchants within Enugu State and the South-East geo-political zone of Nigeria.
1.6 The financial projections show that the project would be financially stable and liquid
by the time it matures. The sales figure stands at N2,000,000, N2,150,000 and
N2,300,000 for year 1, year 2 and year 3 respectively. Also the profits after tax are:
The cash flow position is equally good and encouraging by the second year through the
third year.
1.7 The competitive edge of the enterprise lies in its ability to produce fish at exceptional
and affordable prices within customer reach.
1.8 The sales forecast for the first three years are shown below:
Table 1: Sales forecast for the first three years
Year 1 Year2 Year 3
N970,000 1,509,400 1,529,100
From the point of view of the analysis of our findings, the proposed project is found to be
technically feasible, financially viable, and economically desirable. Thus the project offers good
investment benefits, and is therefore highly recommended for implementation.
PART II
2.0 Industry Analysis
The planned fish farm project is the result of strong industry and needs assessment studies
undertaken in the South Eastern Zone of Nigeria, particularly Enugu by the promoters of this
project. The study reveals vast opportunities available in the agriculture industry which can be
leveraged upon to contribute to the growing Nigerian economy in national food production and
perhaps, the exportation of fish and sea foods to other countries in order to make profit. Investing
in fish farming will firm up the Naira, improve GDP, reduce inflation and create more jobs.
The study also revealed that Nigeria’s total annual fish demand is estimated at 3.2 million metric
tonnes (mmt). However, just 30% of this demand is met domestically, resulting in an annual spend
of N125bn (US$625m) on fish imports. This implies that Nigeria’s aquaculture industry is greatly
untapped. Also, the current campaign for more consumption of fish protein has further heightened
the demand for fish. With the population of Nigeria growing at 5.7% annually, this expanding
demand trend is expected to be sustained in the future.
b. Due to production costs, fish from man-made ponds are usually costlier than those obtained
by fishermen from rivers. The business will therefore face the challenge of competition
from local fishermen, who supply fish to wholesalers and consumers at cheaper prices. The
business intends to major on catfish, which can be made in ponds in order to gain
competitive edge over fishermen who harvest other types of fishes that grow only in the
sea.
c. Compared to setting up a poultry or snail farm, establishing a fish farm is more expensive.
It is capital intensive and involves a lot of planning.
d. Fish are delicate animals that require careful management. Any slight error in maintenance
could lead to a drop in fish production. In some cases, some fishes may die, and this
amounts to financial losses. Competent staff and personnel will be employed to carefully
manage the fish.
2.5 Business Ownership
The business is a sole proprietorship owned and managed by Ajah Ogochukwu Peace, who has
undergone the requisite training for the management of a fish farm.
2.6 Locational Factors
The fish farm is located at No 9 Park Avenue, G.R.A Enugu. This choice of location is informed
by the following reasons:
1. Availability of land to contain expansion of the fish farm
2. Existence of good road network and ease of market access
3. Availability of cheap and reliable labour
4. Its proximity to produce markets in Enugu will make it easy to access feed supply sources
for the fishery.
PART III
3.0 Products
Carousel Fish farm will provide only the following product:
a. catfish
Fish farming consists of two major subdivisions, which could either be operated separately or as
an integrated process. The two subdivisions are the nursery and the grow-out pond operation. The
nursery operation is the basis for the grow-out operation and as such it cannot be operated without
the nursery.
The nursery involves the inducement of the female fish to lay eggs, which are then
fertilized, incubated and hatched fish are known as fries. These fries are then nurtured from
between three and four weeks into fingerlings which is the size suitable for use in the fish
grow-out operation.
Grow-out Operation
The nursery and grow-out operation is referred to as primary operation. It involves the
nurturing of the three or four weeks within which they could grow into post fingerlings,
mini juveniles and juveniles respectively. At this point, there are nurtured for between three
to four months into grow-out or table size fish suitable for sale and consumption.
Consequently, Carousel Fish farm has planned her fish farm in such a way that about 2 tons of fish
will be up for sales every three months. A ton of catfish weighs 1000kg and a single mature
juvenile weighs about 1kg. Two or three mini juveniles weigh 1kg also. Thus, in all, the farm will
produce about 2000 fishes every three months and 5000 every 6 months. The schedule of
production will ensure that the farm maintains its reputation amongst her customers as the place
where suppliers of juveniles are most assured.
3.2 Costing
The costing of the fish is mainly built around two major cost items, they are:
a. feeding
b. staff salary
Feeding: Upon hatching, the fries (small fish) is started with atamia. This is the powder-like form
of the feed. It is the most expensive of all the feed stages but the consumption rate of these fishes
at this time is relatively low. This feed type contains adequate minerals, vitamins and nourishment
to support growth, development and protection hence they are specially made. Below is the cost
analysis of the feeding of the catfish for the first 6 months of maturity.
Table 2: Cost Analysis for feeding of Catfish for first Six months
Carousel Fish Farm is located at 9 Park Avenue G.R.A Enugu which is within the reach of some
markets like Ogbete, Meyo, New market, Orie-Emene, and Kenyatta where fish is high on demand.
Information from experienced operators in the business reveals that about 100,000 metric tons of
fish are demanded yearly in Enugu and its environs for the past 4 years. And that this demand
figure is expected to increase as population within the market area being considered increases.
Experienced operators are agreed on the fact that not more than 35% of the fish demand figures
are met by existing fish farms.
3.4 Projected Annual demand of Fish foods in Enugu and its environs (2019-2021)
As earlier stated, about 100,000 metric tons of fish were demanded yearly in Enugu and its
environs for the past 4 years. This figure is expected to grow with the growth in population. Since
population growth rate in the area hovers around 2.5% to 3.25% for about 5 years now, it seems
rational to expect that the demand for fish will grow with at least a growth rate of ½% for the next
three years. (See table)
Table 3: Projected Annual demand of Fish foods in Enugu and its environs (2019-2021)
The projected average annual demand of fish in Enugu and its environment is about 143,750. It is
expected that this level of demand will subsist for the years following.
3.5 Projected Demand-Supply Gap of Fish products in Enugu and its Environs
As earlier stated, of the total demand for fish, only about 35% of the demand are met by existing
fish farms in the area. Thus, the demand-supply gap of fish in Enugu and its environs is shown in
Table 4 below:
Adjustment Demand-Supply
Gap
130,000
Less 20% due to expansion of existing fish farms and establishment of 26,000
new ones
104,000
The plan however is to produce about 10,400 tons of fish yearly (based on the installed capacity).
This represents about 20% of the total demand-supply gap of fish. It is therefore assumed that sales
will not be a problem.
PART IV
Carousel Fish farm has an exciting business opportunity since the market for fish protein is
unlimited and ever increasing especially in Enugu and its environs due to the increase in population
and the campaign towards more consumption of fish protein as a better alternative to animal
protein.
Carousel Fish Farm plans to articulate appropriate strategy for each class of customer.
PART V
Currently, the catfish is sold to main distributors at N500 per kilogram, and it is retailed at N600
per kilogram. Carousel fish farm intends to sell at this price in order to compete favorably, break
even and make profits. Survey data has shown that catfish is preferred to the frozen ice-fish in
nutritional taste and value. Therefore, if Carousel Fish farm commences operations as planned, it
will be a market leader in no distant time.
Introduce our business by sending introductory letters alongside our brochure to stake
holders in the agriculture industry, households, hotels and restaurants and agriculture
produce merchants et.al.
Advertise our business in agriculture and food related magazines and websites
Attend related agriculture and food expos, seminars, and business fairs et al
Leverage on the internet to promote our business
Engage in direct marketing
Encourage the use of word of mouth marketing (referrals)
Launch our juveniles into the market at a highly competitive price
Offer trade discounts to drive the market faster
Distribute calendars and almanacs to the numerous customers to help increase the farm’s
popularity amongst the middlemen in the fish market.
PROFIT 485,000
PROFIT 1,509,400
PROFIT 1,529,100
The farm intends to expand its capacity after the first three years so as to meet up with the
increasing demand for fish. Also there will be a constant stock of fish of 1000 to ensure continuous
production. Research shows that 10% loss on fish is recorded during harvest. For analysis purpose,
a loss margin of 20% is given for business safety reasons. To push sales however, 2% discount is
given to regular customers. Analysis is presented in the table above.
PART VI
6.1 Management and Organization
Carousel fish farm is a sole proprietorship owned and managed by Barr. Ajah Ogochukwu Peace.
She is a law expert with basic knowledge in financial management which she is expected to utilize
in running the farm. To help in the daily management of the farm, some other good hands will be
hired. The plan is that the hired hands will compliment Barr. Ajah especially in the area of technical
know-how in fish farming. The following table shows that staff and management compliments of
the fish farm:
Proprietor
Security
Personnel
PART VII
Legal, Environmental, Societal and Regulatory Issues
7.1 Legal Issues
Carousel Fish Farm plans to commence operations as a sole proprietorship. As such, it is just
enough to register the business name with the appropriate department at the Local government
Headquarters and Corporate Affairs Commission. Every attempt will be made to get the necessary
permit and licenses.
PART IX
9.1 Summary of Project Cost
The total cost of the project is N3,160,000 which is made up of N2,450,000 and N710,000 working
capital.
9.2 Fixed Capital Investments
Carousel Fish Farm is located at No 9 Park Avenue, G.R.A Enugu on a land area of about 5
standard plots of 60” x 20”. The site is accessible by road all year round. The following table shows
the fixed capital investments required for the projects.
Table 8: Fixed Capital Investments
S/N Item Cost (N) Number Total Amount (N)
1 Construction of Concrete ponds 200000 4 800000
2 Wiring of water system 50000 - 50000
3 Construction of Office 200000 - 200000
4 Store 150000 1 150000
5 Generator/Wiring 150000 1 50000
6 Freezers 100000 1 100000
7 Sinking of Borehole 600000 1 600000
8 Fishing Kits 20000 200000
9 Fencing of the ponds 200000 200000
10 Labour 100000 100000
Total 2450000
9.4 Utilities
The location of the fish farm is connected to sources of water and electricity, although these
utilities are not very consistent in supply. However, the farm will be powered by a generator set
whenever electricity supply is unavailable.
9.5 Other Expenses
There are other expenses to be incurred in the course of running the fish farm. They are shown in
the table below:
Table 10: Other Expenses
Type of Expense Year 1 (N) Year 2 (N) Year 3 (N)
Vehicle Maintenance 100000 105000 110000
Business Travels 30000 31500 33000
Public Relations/Advert 90000 94500 99000
Miscellaneous 50000 52500 53600
Total 270000 283500 295600