Catfish Farming Business Plan

Executive Summary

Fish and fish products are known worldwide as a very important diet because of their high nutritive quality and significance in improving human health. Fish which contributes 36.6gm per day of net protein utilization in Nigerian homes is still below the recommended requirement by the world health organization (WHO).

ABC FARMS which is currently producing and processing fish products intends to expand its production from 3,000 fish to 10,000 fish per cycle of production which takes between 5 to 6 months before harvest. The farm which has a land of about 15,000 square meters with two fish ponds, the farm which process some their fish has two smoking kiln, which used to smoke dry the fish.

The project requires about N10, 569,411 in which the applicant already has an existing assets of about N4, 933,500 which represent 47% of the project worth, the applicant intends to contribute N635, 911 to the project as equity which represent 6% of the project and intends to secure a loan of N5,000,000 from AGSMEIS program of the CBN which will represent 47% of the project worth.

Projected Revenue of N7, 411,577 is expected to be realized from the project semi-annually (every six months). . The cash flow projection shows positive net cash balance at the end of each circle. A projected profit and loss account shows indication of profitability at the end of each year of the project with Net profit of N 7,129,558, N7,189,558,           N7,239,558,  N7,289,558 and N7,339,558 from year 1 to final. The return on Sales, Capital employed and Equity are detailed below

	YEAR 1	YEAR 2	YEAR 3	YEAR 4	YEAR 5
NET PROFIT	7,129,558	7,189,558	7,239,558	7,289,558	7,339,558
RETURN ON SALES	48%	49%	49%	49%	50%
RETURN ON CAPITAL EMPLOYED	54%	55%	56%	56%	57%
RETURN ON EQUITY	1121%	1131%	1138%	1146%	1154%

 

The loan is expected to be paid back in 5 years. The cash flow shows a positive return with Net Present Value (NPV) of N34, 802,215 Benefit Cost Ratio of 2.18 and an Internet Rate of Return (IRR) greater than 50%.  All factors indicate positive viability of project which is worth the bank investing into. The summary of the total cost and financing plan is shown below

SUMMARY OF TOTAL PROJECT COST AND FINANCING PLAN
S/NO	ITEMS	BANK	APPLIC. CONTRI. (N)			TOTAL
		CONTR. (N)	EXISTING	PROPOSED	TOTAL	COST (N)
1	INVESTMENT ITEMS
1.1	Farm Land	-	900,000		900,000	900,000
1.2	Buildings & Structures	200,000	726,000	-	726,000	926,000
1.3	Machinary & Equipment	1,590,000	807,500	-	807,500	2,397,500
1.4	Vehicles & Motors		2,500,000	-	2,500,000	2,500,000
	SUB-TOTAL 1	1,790,000	4,933,500	-	4,933,500	6,723,500
1.6	10% Contingency	179,000	-	-	-	179,000
	TOTAL      1	1,969,000	4,933,500	-	4,933,500	6,902,500
2	OPERATING EXPENSES
2.1	Management & Labour	510,000	-		-	510,000
2.2	Material Inputs	2,346,733	-		-	2,346,733
2.3	Utilities	-	-	357,000	357,000	357,000
2.4	Repairs and Maintenance	-		126,555	126,555	126,555
2.5	Project Insurance	-	-	104,000	104,000	104,000
	SUB-TOTAL 2	2,856,733	-	587,555	587,555	3,444,288
2.8	10% Contigency	174,267	-	48,355.50	48,356	222,622
	TOTAL     2	3,031,000	-	635,911	635,911	3,666,911
2.9	GRAND TOTAL	5,000,000	4,933,500	635,911	5,569,411	10,569,411
	%Contribution	47	47	6	53	100
	NB : Contingency adjusted by N60,406.75 to roundup loan volume

 

Table of Contents:

EXECUTIVE SUMMARY

 

1.0             Business Overview                                                                                      6 - 9

 

1.1             Business Overview

1.2             Company Description

1.2 Vision and Mission Statement

1.3 Business Objective

1.4 Critical Success Factor of the Business

1.5 Current Status of Business

1.6 Justification of Loan

 

2.0       Marketing Plan                                                                                             11 - 15                                                           

2.1 Description of product

2.2 Target Market

2.3 Demand and Supply Outlook

2.5 Market Strategy

2.6 Competition

2.7 SWOT Analysis

 

3. Production Plan                                                                                                    16 - 21

 

3.1 Raw Materials

3.2 Production Equipment

3.3 Production Cost

           

                                   

Organizational and Management Plan                                                                  22 - 23

 

4.1 Ownership of the business

4.2 Administrative Structures

 

5. Financial Plan                                                                                                        24 - 31           

 

5.1 Financial Assumption

5.2 Project cost and Finance plan                                                                         

5.3 Revenue Projection                                                                                          

5.4 Cash Flow projection                                                                                       

5.5 Projected Profit and Loss Account                                                                 

5.6 Repayment Plan                                                                                    

5.7 Economics Analysis                                                                                         

5.8 Viability Test                                                                                                     

 

6.0 Benefits and Justification                                                                                 32

6.1 Benefits

6.2 Justification

 

1.0             BUSINESS OVERVIEW

Fish and fish products are known worldwide as a very important diet because of their high nutritive quality and significance in improving human health. Fish which contributes 36.6gm per day of net protein utilization in Nigerian homes is still below the recommended requirement by the world health organization (WHO). The shortfall is not because of the non-availability of the resource but due to none maximization and sustainable utilization of available aquatic resources. Nigerian has over 12.5 million-hectares of inland water capable of producing over 350,000 metric tons of fish annually. The demand for fish in Nigeria mostly outstrips the local production. Nigeria is the largest fish consumer in Africa and among the largest fish consumers in the world with over 1.5 million tons of fish consumed annually. Yet, Nigeria imports over 900,000 metric tons of fish while its domestic catch is estimated at 450,000metric tons/year

 

Fish plays a vital role in feeding the world’s population and contributing significantly to the dietary protein intake of hundreds of millions of the populace. On a global scale, almost 16 percent of the total average intake of animal protein was attributable to fish in 1988 (FAO 1990). In the developing worlds, fish is a highly acceptable food that supplies as much as 40 percent of all animal protein available of the countries where fish is the main sources of animal protein, 39 out of the top 40 are found in the developing world. Moreover, the poor spend proportionally more on fish than on meat or other sources of animal protein

1.1             Vision and Mission Statement

To develop a world-class Aquaculture community that is committed to fish production and processing for both the Nigerian market and the global market.

 

The mission of the company is to operate a complete fish farm committed to excellence in the production of quality products that would be accepted across the industry

 

To fulfill this mission, the company will:

§  Utilize local and available abundant resources

§  Partner with the host community

§  Set up viable out-grower scheme

§  Adhere to best practices

§  Recruit and retain the right people

§  Be goal – oriented

1.2             Business Objective

Our business objective is to make fish available across the nation with the production point at Minna Niger state.

1.3             Critical Success Factor of the Business

 Access to capital:  It is important to have access to capital to acquire, upgrade and maintain equipment and facilities and keep afloat working capital. Also, funds must be available to meet the contingent needs of the company.

    Tenured Sales Contract: The Company shall endeavor to discover and secure long-term supply contracts with major fish product buyers.

    Professional Management of Project: The plant shall be managed by experienced and technically competent professionals to ensure that the organization’s plan, as well as targets,  can be realized in good time.

    Organisational Structure: Controls must be put in place to avoid theft and maintain product quality. A lean and entrepreneurial organization structure ensures that the interest of staff and that of the owners are closely aligned.

    Innovation: The Company needs to take into consideration customers’ judgment of their service. They must also be proactive in anticipating customer’s future demands and position themselves to meet such demands.

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