Floating Fish Feed Production in Nigeria; The Feasibility Report.

Nigeria, with a population of about one hundred and sixty-five (165,000,000) million people is grossly underprovided with an essential food component, protein. For example, data from the Federal Office of Statistics (FOS), Central Bank of Nigeria (CBN), and Food and Agriculture Organization (FAO) indicate that from cattle, less than two (2) kg of beef is available to an average Nigerian per year and just mere four (4) kg of eggs per annum is available to each Nigerian.

In fact, milk production has been nose diving or at best has remained constant since 1994.This scenario is compounded more so when the volume of egg supply is very low, being 10.56g per person per day as compared with the usual recommendation that an egg should be consumed by an adult per day. This recommendation would imply a crate of thirty (30) eggs per month. This story also holds for other fish products.

To ameliorate this problem of low-level of protein intake, there is the need for concerted effort, among the various stakeholders to bring about the massive production of protein based food items at competitive costs so that they would be affordable to the general masses. Aside from the other necessary economic reforms, massive investment fish farming is one way of resolving the problem and invariably in the production of feeds.

Manufactured feeds are an important part of modern commercial aquaculture, providing the balanced nutrition needed by farmed fish. The feeds, in the form of granules or pellets, provide the nutrition in a stable and concentrated form, enabling the fish to feed efficiently and grow to their full potential.

Feed is a major expenditure for fish farmers as it accounts for forty to fifty percent (40 – 50%) of the production cost. The global aquafeeds market is estimated to grow at a compound annual growth rate (CAGR) of 11.7 per cent from 2013 to 2018, reaching 82,390.5 KMT by 2018.

The global aquafeeds market has grown exponentially in the last few years and a similar trend is expected to follow for the next five to seven years. Leading companies are focusing on launching of new products for expansion of the business in local as well as foreign market. Investment and expansion is the second most preferred growth strategy after new product launches.

Asia-Pacific and Europe are the leading consumers of Aqua feeds, together accounting for more than seventy percent (70%) of the consumption on a global scale. Asia-Pacific is estimated to be the fastest growing region in terms of revenue. Growth is particularly high in countries such as China, Japan, Indonesia, and Ecuador.

Fish accounts for the maximum consumption of aquafeeds. The feed composition of most of the fish consists for fish meal, soybean meal, and fish oil. Recently, the use of rice, wheat, and corn-based products has also become common. There is no major difference between feed composition of fish and crustaceans. The mollusks feed consists primarily of algae.

The global market is driven by many factors such as growth in Aquaculture industry, increased consumption of fish and sea food, flexibility in use of secondary raw materials, and increasing income of expanding middle class in developing nations. The main obstacles in the growth of global market are the rising cost of raw materials and strict regulatory structure. Other reason, which is restricting the farmers from switching to the Aqua feeds, is the high cost.

The world’s aquafeed business is highly fragmented, and global players, like Cargill compete with a lot of regional feed producers. Around thirty-five percent (35%) of the aquafeed market is divided among four global companies, none of which has more than a twelve percent (12%) market share.

This report examines the financial viability of producing floating fish feed in Nigeria, an essential requirement in fish rearing and production.

The proposed plant would comprise of Floating Fish Feed Plant, Weigh Bridge, Generator, Transformer with Electric Poles, Project Vehicle, Forklift/Loader, Wood Pallets and AGO / PMS storage tank.

The production capacity of the proposed plant is one thousand (1,000) kg per hour and the plant would operate at seventy-five percent (75%) of the installed capacity for double (2) shifts of eight (8) hours per day in the first, second, third, fourth and fifth year of operations respectively.

Though the plant can produce different size by changing the moulds (different sizes and composition are required for different stages of growth), for the financials we would focus on the production of two (2) mm size of feed.

The raw materials required for production are Maize flour, Soya beans meal, Groundnut cake, Wheat offal, fish meal (68%), Fish meal (72%), Soya cake/full fat soya, Fish premix, Lysin, Methionine, Bone meal, Salt and Toxin binder. They are raw materials can be locally sourced.

Table of Contents

EXECUTIVE SUMMARY 1.0 Business Overview 1.1 Description of the Business 1.2 Vision and Mission Statement 1.3 Value Proposition 1.4 Critical Success Factor of the Business 1.5 Current Status of Business 1.6 Description of the Business Industry 1.7 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of product 2.2 Product delivery 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Production Plan 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating activities and expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implementation Schedule 4.0 Organizational and Management Plan 4.1 Ownership of the business 4.2 Profile of the promoters 4.3 Key Management Staff 4.3.2 Management Support Units 4.4 Details of salary schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start -up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Analysis 5.7 Cash flow Analysis 5.8 Viability Analysis 6.0 Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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