FEASIBILITY STUDY REPORT ON FISH FARM PROJECT

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 TABLE OF CONTENTS

1.0 Introduction/ Executive summa.......................................................................4

1.1 Purpose..............................................................................................................4
1.2 Project description.............................................................................................4
2.0 Fish Farming Feasibility study......................................................................5
2.1 Fish market.........................................................................................................6
2.2 Project location...................................................................................................6
3.0 Project technical feasibility................................................................................6
3.1 Project execution plan........................................................................................7
3.2 Risks and challenges...........................................................................................7
4.0 Economic /Financial plan...................................................................................8
4.1 Operational costs................................................................................................9
4.2 Salary/ Wages....................................................................................................10
4. 3 Variable costs...................................................................................................10
4.4 Amortization of costs........................................................................................10
5.0 Estimated revenue............................................................................................10
6.0 Conclusion.........................................................................................................11

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 LIST OF TABLES

Table 4.1 Cost of land and fish farm infrastructure development...........................8

Table 4.2 Estimated revenue accruing for the first 5 years...................................10
Table 5.1 Condensed income/expenditure of fish farm project..............................11

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1.0 INTRODUCTION / EXECUTIVE SUMMARY
Fish farming business in Nigeria is not something new. People around Nigeria
engage in fish farming business especially those who live in places blessed with
abundant fresh water. Although, Fish farming is a lucrative business which
requires time, patience and money. One must be ready to take risks if you must
venture into this kind of business. The reason why most fish farmers in Nigeria fail
is because they believe the saying that fish farming requires little investment and
therefore results in huge profits. I tell you that If it were so easy, everyone would
be doing it.

Nigeria like most of the developing countries suffers from protein deficiency in the
diet of the people. This problem is becoming more and more acute with the
increase in population. Increase in fish production through Aquaculture could be
an important source of animal protein. The successful implementation of an
aquaculture project depends upon a number of parameters, such as proper selection
of site, soil and water quality, project management on scientific lines etc. The
present report has been prepared keeping all these parameters in view.

1.1 Purpose
The purpose of the study is to assess the viability of the establishment of a fish
farm at Kuje area council, Abuja, Nigeria by attempting to provide data for the
following:
 The entire concept of the project

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  The most viable dimension of the project including construction and
structures
 The production technology
 The cost and revenue estimates for a year period
 Expansion/development and implication schedule
 Cash flow and financial plan of the project

1.2 Project description

 The fish farm project is for the purpose of producing fish (catfish) for sale.
The project would be located at Kuje and would produce fish and
fingerlings.
 The labor required would be available, particularly the unskilled, which are
readily available in the project area. Manual construction would be adopted
for the construction of the fishponds because of the economic advantages.
There is abundant unskilled manpower in the project environment. The
market existing in the area, surrounding the project has not been exploited.
The project market is therefore unlimited and all fish produced would be a
ready market. The demand for fish exceeds the supply.
 Required electric power would be supplied by a 5 KVA generator. The
electric supply would be used in pumping water from the borehole.
 The project is financially viable and at the envisaged scope of operation (5
years). A short term loan of N 13,500,000 (Thirteen million five hundred
thousand Naira), is to be raised. From the second year, the project would
generate sufficient cash to sustain production. The loan would be defrayed in
the third year of the project.

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  The project is socio-economically viable. It would create employment and
has no discernible hazardous impact on the environment.
 There would be no difficulty in the introduction of the technology to be
adopted for the project. The manager of the project will be an adequately
trained personnel with skills in fish farming.
 The projections for the project take care of bills payable from the first year
and even at that the profit would be high.

2.0 Fish Farming Feasibility study

It is very important to carry out feasibility study on fish farming business if you
want to venture into it in Nigeria. This is help ascertain what you would need in
order to equip yourself in order to achieve positive results in fish farming
business.

The following factors below may vary if you want to start a successful fish
farm in Nigeria and they include:
 Location
 Cost of labour
 Cost of materials
 Cost of feeding the fishes
 Cost of fingerling (fish seed)
 Type of Water
 Marketing
 Distribution

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2.0.1 LOCATION

Location plays a vital role in fish farming as it helps decide the kind of fish pond
to be constructed. Usually, areas with swampy environment can be useful for
fish farming in Nigeria and earthen pond a good fit for fish farm whether the
location is swampy or the have a high-water retaining capacity
You should try to avoid bushy areas with lots of trees, unless you have the
financial power to do so.
If you opt for a concrete pond, the farmer should make provision for bore hole
for water supply or alternatively he or she should buy water. He should also
provide a shade for the fishes and fingerlings

2.0.2 COST OF LABOUR/MANPOWER

It could be cheap or expensive based on the location. Unless if you opt for
earthen pond which is not expensive to create, concrete pond might require you
to spend on labour. Whatever the case might be, cost of labour is a very
important factor to be considered when carrying out a feasibility study on fish
farming.
2.0.3 COST OF MATERIALS

You are to find out the cost of the materials you are going to use to kick
start your fish farming business. for example, if you want to build or erect
the pond, you would need to find the cost of cement, bricks, e.t.c

2.0.4COST FOR FEEDING THE FISHES

The cost of feeding varies. Foreign feeds are normally more expensive than
local feeds. Example, cupens is sold above N5,000, while local feeds cost
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 below N4,500. You could also opt in producing the feed locally, as it will
even still maintain the the high level of protein in the feed just as in the
foreign feed.

2.0.5 MARKETING

The marketing aspect is very vital when carrying out a feasibility study on how
to start fish farming business in Nigeria. This is determined by the market
forces (demand & supply). One thing you should note in fish business is that
the size of the fish determines the market.

Retailers, consumers and restaurant owners would prefer big fishes rather than
small fishes. So you would have to invest in your big fishes, which will draw
customers for you.

Finally, Feasibility study on the market helps you to know when your fishes are
on demand and when you are to supply them and gives a fish farmer an
overview of what he needs to know about the fish business after which you can
draw a fish farming business plan to help give you a focus on what to do as you
start you fish farming business.

2.1 Fish market

The fish farm proposed is expected to supply fish to Kuje and its neighboring
communities at affordable prices. The demand for fish in both towns is huge and
some of the fish from the farms can be transported to these places for sale to
increase the market for the product.
2.2 Project location
Prior to the determination of site suitability, a careful consideration has been
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given to the easy accessibility of sufficient quantity of water, easy accessibility to
the site, proper climatic conditions, easy availability of production inputs, socio-
economic aspects, marketing channels etc. The project would be located on a 100 x
200m piece of land at Kuje. The water table at this location would be higher and
make it easier to drill a borehole. Presently, there is no fish farm in the area and the
main decision to locate the proposed fish farm at Kuje was based on the fact that
the market for the product is large and can be

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profitable. The cost of the land is considerably low because it is presently not used
for any major economic venture.

3.0 PROJECT TECHNICAL FEASIBILITY

The project would be in two separate compartments: Fish production unit and a
hatching unit. The fish production section would be concerned with the production
of table size fish for consumption. The layout of production would start with 2
production ponds measuring 25m2 each. In the 1st year of operation, the ponds
would be constructed and stocked. The two ponds would have a stocking density
of 6,000 catfish fingerlings each, per culture period. The 2 initial production ponds
would therefore have total fish density of 12,000 catfish fingerlings when fully
stocked. It is expected that total yield would be increased per unit of production. In
the second year, 2 additional production ponds measuring 25m2 each would be
constructed.
The bio-technical feasibility of the selected species is given as follows:
The catfish belongs to the family Clarinda. This family is divided into two genera:
Claries and Heterobranchus. Claries have 8 major species while the latter has 3
species in the southern zone of Nigeria. The former has a single rayed dorsal fin
extending almost to the tail; the latter has a rayed dorsal and adipose fin. The
Claries family would be used for the project because they feed on wide variety of
food ranging from weeds and planktons to insect larvae, snails
crustaceans, worms and shellfish. The Claries species can accept a wide variety of
agricultural by-products, brewery and flourmill wastes which are available locally.
When catfish are stocked at the stocking rates described; with proper feeding, they
can grow to an average of 1000 g in a year.
The hatchery section starts in the second year of production. At this time, all the
fingerlings required for the production ponds would be supplied from the hatchery.
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In the hatchery, catfish would be artificially induced to spawn by hormonal
treatment using pituitary hormone within the hatching units. Catfish matures after
7-10 months at a weight of 200- 500 g. However, spawning would not take place
since the final stimulation associated with the rise in water levels and the
inundation of marginal areas would not occur. In the hatchery, four female brood
fish each weighing 500 g can produce 10% body weight of eggs. The rate of
hatchability is estimated at 50% and the survival rate of fry to fingerling at 30%.
This means that the hatchery can produce 20,000 fingerlings from the 4 brood
fishes, sufficient to meet the fingerling requirements of the production ponds after
the initial cropping.
3.1 Project execution plan
When the project is fully implemented, a total of 1 brooder pond and 2 nursery
transition ponds would be constructed. The brooder ponds measure 4×4 m (16 m2)
and the nursery/transition ponds measure 3×4 m (12m2). 4 production ponds would
also be constructed and stocked for the production ponds, measure 5×5 m (25 m2).
3.2 Risks /challenges
Power -The supply of power to the area is poor. For the project to be successful, it
would rely largely on power supply from the generator which could increase the
operational cost.
Water - During the dry season, the water table in the area drops to a low level. This
would put a lot of stress on the pumping machine and could result in frequent
break downs which would increase the operational cost of the project.
Security -There are security challenges in the area which may result in loses if not
properly managed. However, this can be managed by using locals who are
conversant with the environment as security personnel.

4.0 ECONOMIC /FINANCIAL PLAN

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Table 4.1: Cost of land and fish farm infrastructure development
Activity Amount (=N=)
A. Cost of land and land development
Land acquisition 2,000,000
Survey of land 100,000
Pond construction 1,000,000
Total 3,100,000
B. Fish farm infrastructure
development
Cost of farm house / office 2,000,000
Fencing of the farm 1,500,000
Fish shade building 500,000
Generation of power (5 KVA) 100,000
Water pump 60,000
Bore hole 1,000,000
2 800Litre tanks 500,000
Total 5,660,000
C. Fish production and hatchery
materials
Equipment (Nets, water analysis kit etc) 1,000,000
Total 1,000,000
D. Salaries and wages of staff
Project /farm supervisor 600,000
2 Farm assistants 480,000
Security 240,000

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Total 1,320,000
E. Variable inputs
12,000 Fingerlings 360,000
Feed 400,000
Organic fertilizer 20,000
Other chemicals 20,000
Transportation 500,000
Total 1,300,000
F. Other operational costs
Fuel
Maintenance on pond 100,000
Maintenance on equipment 200,000
Stationery 50,000
Total 350,000
Grand total 12,730,000

The land required for the project was acquired from the community for a cost of
=N=2,000,000 and the perimeter and topographic survey have been carried out.
The design of the farm has also been completed. The constructions of the ponds
were estimated at =N=1,000,000. The construction would be undertaken manually,
because, it would be more expensive to transport earth moving equipment from the
state capital to site. The method of construction would also provide opportunity for
greater participation by the unskilled unemployed labor force in the project area.
With close supervision of the construction work, it is expected that the time

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schedule for the implementation of the project would be easily met. A farmhouse
would be required in the site to secure the project. It would provide areas where
farm equipment would be assembled and maintained. A small office and a store
would be constructed as part of the building to enable adequate control of the staff
activities on the project site. In view of the high cost of building materials and
transportation of such materials to site, it is estimated that it would cost =N=
2,000,000. All other equipment such as generator, tanks and other equipment
would be procured from established companies. The total cost of all infrastructure
for fish farm, would cost =N=5,660,000.
4.1 Operational costs
The operational costs for the fish farm include the cost of the day-to-day
management of the hatching, the wages and salaries of staff and procurement of
other operational inputs. The purchases for all the materials making up the
hatchery equipment will be made from Lagos and transported to the project site.
4.2 Salaries and wages
The estimated total annual expenditure on wages and salaries is estimates at
=N=1,320,000.

4.3 Variable costs

The total variable costs of the project amount to =N=1,300,000 for procurement of
fish fingerlings, feed ingredients, inorganic fertilizer, inorganic fertilizer and other
chemicals.
4.4 Amortization of cost
All of the capital expenditure would be made in the 1st year of implementation of
the project. Already, land acquisition, land surveying and fish designing have been
completed. It shows that the 1st year of the project, a total expenditure of

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(=N=12,730,000) would be made to take care of the operating costs of the project.
A total of =N=2,970,000 would be needed for the operational expenditure of the
project. After that, the project would be capable of generating sufficient funds to
take care of all the operational expenditures.

5.0 ESTIMATED REVENUE

For the purpose of this feasibility report, the revenue expected is restricted to the
operation of the production ponds. It is however necessary to mention that the
hatchery ponds would produce the fingerlings required for the production ponds
after the 1st year of operation. The production ponds when fully stocked would
have a total fish density of 12,000 fingerlings, making provision for mortality at
50% mature fishes. The fish harvested would be 6,000 kg. It is expected that
catfish would sell for =N=900 per kg. Sales and total estimated revenue for the 1st
year of production would therefore, is =N=5,400,000. With a modest estimated
annual increase in the prices of fish of 10%, the estimated revenue accruing from
the project for the first 5 years would be as shown in Table 4.2.

Table 4.2: Estimated revenue accruing for the first 5 years.

Year Income (=N=)
1 5,400,000
2 5,940,000
3 6,534,000
4 7,187,400
5 7,906,140

The Farm /project supervisor would be trained in fisheries and have acquired skills
to provide technical and specialized leadership needed for the management of the
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fishponds. He would be personally responsible for the day to day running of the
fish farm. The positions of the farm assistants would be occupied by men/women
who have acquired some form of formal or informal experience in fish farm
management. It is also expected that they would be trained practically on the job.

Table 5.1: Condensed income/expenditure of fish farm project

Activity Year 1 Year 2 Year 3 Year 4 Year 5
Sales 5,400,000 5,940,000 6,534,000 7,187,400 7,906,140
Costs of 9,760,000 - - - -
sales
Gross profit (4,360,000) 5,940,000 6,534,000 7,187,400 7,906,140
Operating 2,970,000 2,780,000 2,400,000 2,560,000 2,700,000
cost
N.P.B.T. 2,403,000 3,160,000 4,134,000 4,627,400 5,206,140
Tax 45% - 1,422,000 1,860,300 2,082,330 2,342,763
Proposed 780,000 880,000 1,000,000 1,150,000 90,000
loan
repayment

Table 5.1 shows the Principal =N= 13,000,000 + interest 30 % = N 3,900,000.

6.0 CONCLUSION
The fish farm, when in full operation would have tremendous economic and socio
economic well-being of the people in Kuje area council. Fish has become a very
scarce commodity because of the ecological changes due to changes in climate.
The scarcity has also made fish very expensive

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and unaffordable to majority of the population in the area. This has resulted in
serious deficiency in the intake of protein by the people in the area. The prices of
fish produced in the farm would be cheap relative to the present supply. This can
aid the increased intake of protein by majority of the people as it would be
affordable and accessible. The project would provide direct employment for people
for this operation. This is a significant contribution to the economic well being of
the people and social improvement of the project environment. The fish farm
would be a highly profitable project which would generate sufficient cash to
sustain production from the second year. The profits from the project would be
able to repay the loan and interest within the first 5 years.

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