Possibility entering regional and world markets

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1 Products Unique fish products Trout, sturgeon, catfish, crayfish, caviar Antibiotics free Markets Eurasian Economic Union (EEU) CIS European Union (EU) Big potential of entering Middle Eastern and Asian markets INVESTMENT PROJECTS (preliminary calculations) 1. Farm Annual production of 2000,000 young fish $ 750, sq. m. fish farm (Trout or sturgeon) 2.1 Improved water management (semi-closed) system 100 tons annual production $ 300, Water recirculation (closed) system 200 tons annual production $ 560, Fish product processing 1,500 tons annual volume $250, Aquaponics productions 100 tons/year crayfish 50 tons sturgeon 6.3 tons sturgeon s black caviar $3,500, Caviar production 150 tons Sturgeon 20 tons sturgeon s black caviar $3,000,000 Significant growth potential During the last decade, this sector has grown by more than 50 percent. The production volume in 2015 has been more than tones. It is possible to increase the production volumes by more than 20 times, using today s technologies (running aquaculture). Meanwhile, by using advanced technologies it is possible to increase the production volumes by 10 more times. There are around 200 fish farms today in Armenia, most of which are located in Ararat valley. Other regions of Armenia also have significant growth potential in this sector. EXPORT POSSIBILITIES Almost half of fish production in Armenia is being exported. Main export markets are EEU member states (Russia) and EU member states (Belgium, Germany, France). Armenia s unique geographic location creates export potential to Middle Eastern and Asian markets as well. Trout and sturgeon production in Armenia has excellent chances of becoming stable supply source for cheap, safe and ecologically clean fish products. SOLUTIONS FOR MARKET ENTRANCE Ministry of Economic Development and Investments invites interested investors for the development of aquaculture sector, from fish food production to fish production and processing. Armenia already has aquaculture sector, which can offer the following competitive advantages. o High quality cold spring water for aquaculture o Possibility of production set up in Ararat valley (central Armenia), which is advantageous from production as well as logistics perspectives. o Antibiotics free aquaculture o Cheap labor force o High meet volume productivity Possibility entering regional and world markets Jobs Provision Security Benefiting communities Competitive production

2 Products Salmonidaea (Rainbow trout) COMPLIENCE WITH STABLE PROPORTIONATE DEVELOPMENT GOALS Development of aquaculture and export promotion are one of the greatest priorities on government agenda. On middle and long-term perspectives, development of aquaculture is important for provision security, job creation and rational use of natural resources. Hence, it is important to pay attention to: use of beneficial ties between agriculture and aquaculture, promotion and use of best practices and advanced technologies, promotion and use of eco-friendly technologies (less water usage) Lasting (eco-friendly) business solutions Acipenseridaes (Siberian and Russian sturgeon) FAVOURABLE INVESTMENT AND BUSINESS ENVIRONMENT Caviar (sturgeon) Crayfish Catfish o o o Open door policy towards investments Equal rights for foreign and domestic investors (national treatment) Legal guarantees of investment protection o No restrictions on investments, no restrictions on remittances, free repatriation of profit, currency exchange and staff recruitment o Government transparency ( o 19.9% tax rate (source: Report on tax payments, 2016) o Tax and custom privileges for investing in new technologies, production facilities and machinery. Aquaculture, not the internet, represents the most promising investment opportunity of the. 21st Century Peter Drucker, one of major modern day business management scientists. o Development of aquaculture and export promotion are one of the greatest priorities on government agenda. Grass and black carp

3 Investment Project 1 Farm Description Around 2000,000 annual production of young fish. Year round production. Specialized farming of young fish will help fish farming companies to reduce fish growth time and expences. It will also allow ensuring high quality young fish (including triploid young fish) provision through selction and use of other technologies, which will satisfy the needs of a wide range of fish farming companies. Market Products will be sold to aquaculture companies in local and regional markets, namely Georgia and Russia. Cost $750,000 for establishing 900 sq. m. fish farms, with modern equipment. Profitability $500,000 annual gross profit Payback period 2.5 years IRR Over 42 % Jobs 5-10

4 Investment Project 2.1 Fish farm (semi-closed water system) Description 1000 cubic meters for trout or sturgeon production, with improved water management system. The farm uses partial water rotation system, with modern equipment for water purification, air and saturated oxygen enrichment. Market Armenian, CIS (Georgian) and EEU (namely Russian and Belorussian) markets, with possibility of entering other markets as well. Cost $300,000 for establishing and equiping a 1000 cubic meters fish farm Profitability >$110,000 annual gross profit. Payback period 3.5 years. IRR Over 20% Jobs 5-10

5 Investment project 2.2 Fish farm (closed water system) Description 1000 cubic meters for trout or sturgeon production, with improved water management full water rotation or closed system. The system allows year round production, in a fully controlled environment in terms of water temperature, purity, oxygen and nitrogen saturation. The system also allows high productivity level (2-3 times higher than with the water flow systems used today in Armenia). The production volume is 200 tons annually. Market Armenian, CIS (Georgian) and EEU (namely Russian and Belorussian) markets, with possibility of entering other markets as well. Cost $560,000 for establishing and equiping a 1000 cubic meters fish farm Profitability >$170,000 annual gross profit Payback period 4.5 IRR Over 12% Jobs 5-10

6 Investment project 3 Fish product processing Description 1,500 tons of fish products annualy. Year round production. Production includes processed fish meat, e.g. fish meat pieces in vacuumsealed packages, marinated fish, prepack and semifinished food from different fish types. The plant will use fish and crayfish produced in Armenia. Market Local, regional and other markets throughout the world. In addition to CIS (Georgian) and EEU (namely Russian and Belarusian) markets, the products can be exported to other markets, such as Middle Eastern and Asian. Cost $500,000 for establishing and equiping a fish processing plant of around... sq. m. Profitability $... annual gross profit. Payback period... years IRR Over...% Jobs 20-25

7 Investment Project 4 Crayfish production (with use of hydroponic technologies) Description Production includes: tons of crayfish - 50 tons of sturgeon tons of sturgeon black caviar The project is based on use of hydroponic technologies, which is one of leading eco-friendly technologies today in world. This is a loss free production, which efficiently combines cray fish production, fish production (sturgeon), agriculture and renewable energy (production and use of biogas for heating the plant). The farm can also be used for tourism, namely ecotourism. Market Local, regional and other markets throughout the world. In addition to CIS (Georgian) and EEU (namely Russian and Belarusian) markets, the products can be exported to other markets, such as Middle Eastern and Asian. Cost $ 3,500,000 for establishing and equiping a fish farm. Approximately 6 acres. Profitability $1,800,000 annual gross profit. Payback period 5.5 years IRR Over 75% Jobs 25-30

8 Investment Project 5 Caviar production Description Production of sturgeon and sturgeon black caviar. Estimated production volumes 3 years after the initial investment: tons sturgeon annually - 20 tons caviar annually Market Local, regional and other markets throughout the world. In addition to CIS (Georgian) and EEU (namely Russian and Belarusian) markets, the products can be exported to other markets, such as Middle Eastern and Asian. Cost $3,000,000 for a) establishment and equipment of a fish farm b) establishment and equipment of caviar extraction, processing, preserving and packaging plant Profitability $ 1000,000 annual gross profit (profits will increase drastically starting from the 6 th year of the investment, because of caviar sales) Payback period 5 years IRR 20 % Jobs 15-20