GEOSSY COMPANY LTD CAGE FISH FARM BUSINESS PLAN Majanji Landing Site Majanji Sub County, Busia District, Eastern Uganda

Transcription

1 GEOSSY COMPANY LTD CAGE FISH FARM BUSINESS PLAN Majanji Landing Site Majanji Sub County, Busia District, Eastern Uganda Tel: / geossyco.ltd@gmail.com, info@geossy.com

2 Table of Contents Executive Summary:... 3 Project/Innovation:... 4 Market Research:... 5 Marketing Mix - Product:... 9 Marketing Mix - Price: Marketing Mix - Place: Marketing Mix - Promotion: Marketing Mix - People: Form of Business: Legal Responsibilities & Insurance: Labor Costs Form: Indirect Costs Form: Depreciation Form: Product Costing Form (Direct Material Costs): Product Costing Form (Sales and Profit Analysis): Budget: Cash Flow Plan: Sources of Revenue: Risk Analysis: Action Plan:

3 EXECUTIVE SUMMARY 3.0 Name of business Geossy Ltd; A private Limited Company Registered in the Republic of Uganda in 2008 with Registration No Business Innovation: Aquaculture (Cage Fish Farming using local affordable alternatives) 3.2 Location: Majanji landing site - Busia District) 3.3 Products i. Table Fish 3.4 Customers i. Fish wholesalers in local communities, trading centers and the urban residents of Eastern Uganda and Western Kenya ii. Fish Filleting and packaging industries iii. Fish vendors/retailers. 3.5 Shareholders Shareholders Name Amount of share Nationality 1. Emanu Georwell 75% Ugandan 2. Nakawuka Proscovia 25% Ugandan 3.6 Number of staff: Currently Ten (2) but target number by end of 2016 is twenty (10). 3.7 Required capital: $40, Objective: To establish 26 fish cages worth an output of 78 tons of fish production in Sources of capital 1. Grant $ 20, Equity $20,000 3

4 PROJECT/INNOVATION 4.0 Community Challenge Increased fishing pressure, water pollution and illegal fishing practices have contributed to a decrease in fish stocks from our water resources; thus a threat of food insecurity, poverty and unemployment (direct and indirect) as some fish processing industries have been forced to close. Even the surviving industries are operating at low capacity (Mugabira 2008). 4.1 Innovation Our innovation is Aquaculture Development - construction of affordable, modern, easy to manage fish cages and hatcheries that produce high quality table fish and seeds using bamboo, eucalyptus and cheap metal; as a sustainable option for the depleted fish in our water bodies and high cost of imported cages, to help solve the above challenges. 4.2 Products and Services i. Table size fresh tilapia fish. 4.3 Our Customer Segment i. Fish wholesalers in local communities, trading centers and the urban residents of ii. iii. Eastern Uganda and Western Kenya Fish Filleting and packaging industries Fish vendors. 4.4 Project Impact (Needs addressed) i. Increased supply of fish protein (food) through sustainable means. ii. iii. Improved community livelihood through incomes generated at various value chain points Creation of jobs for unskilled, semi-skilled and skilled youth, men and women in our community. Direct employment Number Full time employees at the farm 10 Part time employees (Casual laborers) 22 Indirect employment Fish Wholesalers 10 Fish vendors 11,900 Total Number 12,942 iv. Reduced pressure of on natural waters to enable fish regeneration. 4

5 Volume ('000 tonnes) Value (million USD) MARKET RESEARCH 5.0 Economic Analysis Increased fishing pressure, pollution and illegal fishing practices have contributed to a decrease in fish stocks from lakes. Fish processing industries have closed due to lack of fish while others operate at low capacity (Mugabira 2008). There was a 46% drop in revenues from fish exports in Uganda in the period 2006 to 2009 from $ 141 million in 2006 to $ 75.6 million in 2009 due to decreasing Nile perch export volumes. (Hammerle et al. 2010). There are indicators that the exports dropped further after Trends in total formal export volumes of fisheries products from Uganda by volume and value (UBoS 2010; Hammerle et al. 2010) Value Volume Year 0 With this excessive depletion and closure of industries, majority of people in the fishing communities and those employed started experiencing a poor livelihood up to date. This therefore triggered our focus on fish production in cages. Our idea therefore serves as an alternative source of fresh quality fish, employment, food security and house hold income. 5

6 6.0 Fish Consumption by Species in Uganda (adapted from data by Odongkara (2003). 15% 8% 25% 52% Tilapia Nile perch Rastrineobola Others Our project targets to produce up to 78,000 Kgs of Tilapia fish by 2016 and employ up to 12,942 fish vendors and many others in the fishing industry. This will require an investment of 40,000 USD in the first 2015 Phase which will give turnover of up to 182,000 USD by the end of the first year with net profits of 102,000 USD. We will achieve this through production of cheap metallic, bamboo and eucalyptus cages with simple, replicable, adoptable, sustainable and cheap technology. Our target market comprises of 3.6% of Eastern Uganda s fish market segment in the first year with growth to 7.2% in the third year (2019/2020), considering the population of Eastern Uganda estimated at 9,204,915 (UBOS, 2014 Census) and taking only Uganda s National average per capita fish consumption per year per person at 4kg (Ministry of Agriculture Animal Industry & Fisheries, 2009). Eastern region would consume 24,819,660 Kg of both farmed and capture fish per year. Uganda depends 98% on fishermen for its fish supply and now has no fish for the market and almost 1,500,000 fishermen have become jobless with an unknown number of those working in the fish industries and markets across the country. Given the fact that the fish catch is on decline; aquaculture development therefore holds the key to increased food production and thus an enterprising business in Uganda and beyond. 6

7 7.0 Competitive Analysis Products Customers Needs & Competitors Preferences of customers Fresh tilapia fish. Vendors, retailers, whole sellers, filleting industries Quality table size fresh low price tilapia SON fish farm, Masese Cage farmers association, Okokorio Fish fingerlings Fish farmers Good quality 5-10cm fingerlings with preference to male tilapia. Fish feeds Fish farmers High protein feed with high quality and fish growth performance fish farm SON fish farm, Spring fish farm, Ugachic, Kajjansi Feed Ltd 7.1 Key Competitors s/n Competitor Strength Weakness Competitive Advantage. 01 SON fish farm Jinja 02 Jinja Cage fish farmers association Existed in market for long. Have financial power Popular Supply fish to end consumers Expensive Take orders of 2 ton and above Order must be on schedule. Majorly supply Rwanda. Inconsistent supply Individual farm Small scale production of less than 1 ton Less Expensive -2.3 USD per Kg. Take all orders Sale on buyers schedule Supply Eastern Uganda and western Kenya. Fishermen owned farm Large and small scale sales to both end consumers, factories and whole sellers. 03 Okokorio Fish farm, Katakwi Supply fish to end consumers Small scale production of less than 1 ton Large and small scale sales to both end consumers and whole sellers. 04 Eastern Rice Ltd, Tororo. Have financial power Supply fish to end consumers Depends majorly on ponds Pond fish have foul smell due to mad. Use low cost cages Fresh fish without foul smell. 7

8 8.0 Competitive Leverage Our niche is both Eastern Uganda and Western Kenya. We are to embark on the practice of delivery of fresh fish using refrigerated trucks to distant retailers/fish vendors We are in the process of scaling up our operations so as to maintain constant production for daily market sustainability. Production of quality and affordable fish. We offer a wide range of products Superior customer service Low operational costs Excellent after-sale service especially for customers that consult us on service provision. 8

9 MARKET RESEARCH PRODUCT 9.0 Market Trends: The gap between the supply of fish and the demand for fish is widening both in Uganda and globally. Virtually all the natural fish stocks in rivers and lakes have been fished almost to maximum levels and yet the world population is on the increase. The national average per capita fish consumption is estimated to have declined from about 14kg per person per year before 1990 to about 4 kg per person per year which is below the recommended WHO level of 12.5 per capita. Over the last 10 years, the fisheries sector has taken a strong position in the country s economy as the second largest foreign income earner after coffee (MFPED, 2003) with the Nile Perch, Tilapia and silver fish forming the mainstay of the fisheries. 9.1 Production Trends: With the existing five major and 160 minor water bodies, the country is able to produce 460,000 metric tons - out of which 210,000 metric tons* is for small fish. Aquaculture is estimated to contribute 150,000 metric tons. 9

10 By 2016 the fisheries sub sector is expected to produce up to 1,000,000 metric tons mostly through revamped aquaculture and making use of emerging fishery of small fish like Silver fish on Lake Victoria and Ragogi on Lake Albert. On the other hand, Uganda s population is estimated at about 35 million people and is growing more than 2.5% per year which is an indicator of more fish demand and thus an opening for profitable investment Our Product Range: Range of products 1. Tilapia Quality High/ Good Color Silver/brownish Size g Packaging Kg/Iced fish trays 10.1 Cage Fish Production Process- 10

11 Price (USD/kg) MARKETING STRATEGY 11.0 PRICING Though there are substitute protein products that directly compete for the same market with fisheries products, the price for Fish in Uganda hasn t fluctuated much on the low because of fish scarcity. The pricing though varies with the type and size of fish; and it s on this basis that we focused on the production of the highly demanded fresh Tilapia which is priced averagely at 8,000/=. Owing to our innovation which minimizes production costs, we decided to offer unbeatable prices depending on the season. Average retail market prices ($/kg) for animal protein products on the Uganda market 2001 to 2010 (UBoS, FAO) Chicken R. argentea Dry Nile perch Dry Tilapia Fresh Nile perch Fresh Tilapia Meat Pork Farmed Catfish Year 11

12 11.1 Current Fish Pricing Item Quantity Our Price Market Price Tilapia Fish 1 kg 7,000/= 8,000/= Besides our core products of Cage fish farming, we have adopted other income generating services and below are their pricing; 12.1 Cage Construction Pricing 12

13 MARKETING STRATEGY PLACE 13.0 Location Geossy Fish Cages are situated at Majanji Landing Site in Busia District; Eastern Uganda Administrative Office: Nalukolongo Industrial Area - Rubaga Division Kampala. Contact: Tel: / Justification for the location i. The extensive shore line of the lake with fresh calm waters is suitable for fish farming. ii. Cheap labor supply iii. Its border positioning with good road networks between Eastern Uganda and Western Kenya offers a wider market for the products. iv. The Landing site has electricity and the place is secure v. Availability of a good fish market with storage facilities and an ice plant with production capacity of up to 5,000 kg of ice per day. vi. The water space available can accommodate up to 1,000 cages. This gives us room for expansion. vii. There is a fish filleting industry 300 meters away from the site thus saving us and our customer the cost of transportation. The choice of our office in Nalukolongo is because the city harbors lots of market potential Sales and Distribution Strategy Use refrigerated trucks to increase on the supply to Individuals in residential areas and to fish vendors (retailers) situated far away from our production site. Industries and wholesalers make purchases directly at the farm since they make bulk purchases which is a cost saving to the company. The local fish retailers (vendors) also purchase at the site directly. Consultative selling approach especially for our services like construction of hatcheries, cages etc, aimed at building a long term business relationship. 13

14 MARKETING STRATEGY 14.0 PROMOTION While we are strongly committed to providing the best quality fish farm products that have helped us retain our already existing customers, we plan to attract and scale up our numbers through massive marketing using both Direct and Indirect strategies like local radio and television stations, Newspapers, using our partners and stakeholders and other relevant strategies depending on the changing needs of our target market. We also offer low cost ice packs to our customers to ensure that the fish reaches the final consumer as fresh as from the farm since they can t easily access the cooling blocks. Type of Marketing Marketing Details Cost Local Radio Stations Announcing our product ranges. Sustainable livelihood through affordable Aquaculture innovation Refer to the budget Better pricing Dissemination of Brochures Word of Mouth advertising Promotional offers Our location Product ranges. Sustainable livelihood through affordable Aquaculture innovation Better pricing Our location Zero charge on installations Free Guidance on maximizing production capacity Excellent customer service Follow up on products installed to monitor efficiency Price discounts to our loyal customers to influence retention. Refer of the budget Zero cost Zero cost Zero cost 14

15 MARKETING MIX PEOPLE 15.0 Organization Chart Directors Gen Manager Accountant Fisheries Officer Cage Farm Manager Site Engineers Hatchery Technician Feed Mill Manager Fish Feeders Jua Kali Leader Fry Feeders Mill Operators Jua Kalis Jua Kalis Farm Cleaners Packaging Team Stores NB: This will be fully installed as we grow. 15

16 16.0 Experience & Qualifications of Key Personnel Strategy Position Experience Qualification Emanu CEO/ Site Supervisor 8 Years Dip. Med. Entomology Georwell Awor Esther Okalang John Benjamin Tafuga Yosam General Manager 4 BA (Social Works & Social Administration) Accountant 10 yrs Dip UDBS Accounts, BA Commerce Accounting option, MA Financial Mgt. Fisheries Technician 5 Dip. Fisheries Management and Technologies 16

17 FORM OF BUSINESS 17.0 Incorporation Status: The business is registered as a Private Limited Company for profit. Registration number by the Republic of Uganda Business Name: Geossy Limited Company Mission: To deliver the best value for money to our clients by perfecting they want and delivering it to them in the ways that best meet their needs professionally Objective: To establish 52 fish cages worth an output of 208 tons of fish production by Shareholders Details: Name Share Name Share 1. Emanu Georwell 75% Description of Key skills 2. Nakawuka Proscovia 25% Description of Key skills Cage, hatchery, tank and pond design Leadership Communication Feed production Fish Feed mill design and fabrication Fish Hatching, treatment and management Financial Management Leadership Communication Relevant Experience Relevant Experience Cage, hatchery, tank and pond design Leadership Communication Fish Feed production Fish Feed mill design and fabrication Fish Hatching, treatment and management Fish disease identification Fish species identification, grading and sorting Fish handling Leadership Communication 17

18 LEGAL RESPONSIBILITIES AND INSURANCE 18.0 Eligible Taxes 1. PAYE 2. VAT 18.1 Employee regulations a) 8 Hours of work per day b) 48 working hours a week c) 21 days of Annual leave d) 90 days of maternity leave e) 3 days of Bereavement leave f) Sick leave g) Paid overtime 18.2 Licenses and permits License Cost Trading License 250,000/= 18.3 Insurance: The business plans to undertake the following insurance policies, Insurance NSSF Employee Health Cover Fire & Theft (Property Cover) Cost In plan In plan In plan 18.4 Other responsibilities of the business a) Identifying a competent company lawyer to advise on required legal issues b) Compliance with Environmental standards c) Compliance with child labor laws d) Compliance with foreign trade regulations e) Compliance with Tax laws 18

19 KEY STAFF LABOUR COSTS FORM Employee Total Working Hrs Per Month (8 hrs x No of days) Total Monthly Pay Hours in Production per month Emanu Georwell 8 x 20 of days = 160hrs 300, Awor Esther 8 x 20 of days = 160hrs 400, Okalang John 8 x 20 of days = 160hrs 400, Benjamin Tafuga Yosam 8 x 20 of days = 160hrs 300, Total 640 hrs 1,400,000= 440 hrs 19

20 BUDGET FOR FINANCIAL YEAR 2015 S/N ITEM UNIT COST (USD) 1. Staff wages QUANTITY AMOUNT (USD) Skilled Laborer (2) Months 931 Fish feeds ingredients ,400 Kg 6,090 4 Brood stock fish , Welding Labour Welding rods Cage nets ,828 8 Sampling equipments 104 Assorted Solar Lighting System set Transportation and Fuel 690 Assorted Life jackets and overalls 14 2 pairs Sorting and grading equipment 52 3 sets Fingerlings ,000 3, Repairs 345 Assorted Harvesting Trays 690 Assorted Packaging materials 690 Assorted Happas Anchoring Heavy duty ropes Total 20,023 20

21 FINANCIAL PROJECTIONS CASH FLOW (3 YEARS) Year 2015/ Sales (Kg) 60, , ,000 Cost Per Kg (USD) Total Sales (USD) 138, , ,000 Expenses Staff wages Skilled Laborer (2) Fish feeds ingredients 6,090 12, Brood stock fish Welding Labor Welding rods Cage nets 4, Sampling equipments Solar Lighting System Transportation and Fuel Life jackets and overalls Sorting and grading equipment Fingerlings 3, Repairs Harvesting Trays Packaging materials Happas Anchoring Heavy duty ropes Total Expenses 20, ,353 Gross Profits 117, , ,647 21

22 SOURCES OF REVENUE 27.0 Required Investment = $40,000 Source Amount USD Owners Equity 20,00 Grant 20,000 Total Amount 40,000 22

23 RISK ANALYSIS & CONTROL 28.0 The following are the business risks along with mitigation strategies. Risk Mitigation Fish diseases Routine fish examination Theft Insurance cover Floating security house with 24/7 guard Poor seeds Production of seeds or purchase from a certified hatchery Poor quality feeds Routine feed testing or formulation Predators Predator nets Increasing costs as a result of Inflation By pursuing cost saving approaches Competitor threat By maintaining quality of our products 23

24 ACTION PLAN Task/Activity Responsibility Timeline Budgeting Procurement Transportation Fabrication of fish cages Installation of cages Breeding of fingerlings Production of fish feeds Stocking of cages & transportation of feeds to the cages Training of staff Fish Feeding Grading and sorting Treatment Quality control Harvesting Sales Restocking cages Esther, Okalang Emanu Esther, Emanu, Moses Emanu + Yosam Emanu and Yosam Emanu, Yosam and Nasasaka Yosam, Emanu Yosam, Emanu Esther Moses Kavuma Moses Kavuma Moses Kavuma Yosam, Emanu Emanu + Moses + Esther Esther, Okalang Yosam 24

25 Majanji Cage Fish farm Work Plan Summary s/n Item April May June July Aug Sept Oct Nov Dec Jan-16 Feb-16 1 Construction of cages 2 Purchase of Fish feed ingredients 3 Purchase of brooders 4 stocking of cages 5 feeding, sampling of cages 6 Harvesting of cages Restocking of 7 cages 25