We have moved again - now at St Kilda. You can contact us on 0411 105 365. We are in the process of setting up hydroponic and aquaculture displays.

Monday 0930 to 1730
Friday 0930 to 1730
Saturday 0930 to 1230

We are available for consultation and site visits at these times- other times by appointment by email (robin@soladome.com.au)

After 35 years at 44 Chapel Street it was time for a change to a web based operation and to offer guidance based on many years of practical experience.

 

 

Commercial Aquaculture

Practical advice, definitions and tips to help you start up a commercial aquaculture venture.

How I very nearly lost my shirt by investing in aquaculture
- a true story by J. Perch.
(87 Kb PDF document)

This means making a profit and supporting yourself.

If you are looking for full time employment in your own aquaculture enterprise you need to consider the following.

How much gross profit is required so that you can support the operation and yourself ?

Firstly a few definitions

Turnover is the money you get when you sell something (and get paid for it)

Gross margin is what is left after you take out the cost of purchases you made to get the sale - cost of the young animals, their feed, electricity, labour and so on. (don't forget the GST)

The gross margin is then reduced by the fixed costs of the business - these are the costs that the business has to pay for just to be in business, things like the cost of the loans, the depreciation, telephone service, rates and taxes, licence and permit fees, motor vehicle registration and insurance, wages and superannuation and workcover. These fixed costs are often called overheads.

Variable costs are the costs that depend upon the number or range of things produced. higher or lower numbers of fingerlings, extra harvest labour, more freight to bring in extra food etc.

After deducting all your business costs from the turnover figure you should end up with a profit before the tax man asks for his share.

A typical small business might have a gross margin of 20 - 30 % of sales and fixed and variable costs of 15 to 25% of sales leaving a margin before taxation of 15% to minus 5% !!!

If the business is aquaculture then the minimum sales will have to be in the region of $ 175,00 to $ 250,000 per annum in order to support one full time person ( yourself )

If the average farm gate sale price is $10.00 per kilogram then you will have to produce and sell and get paid for 17,500 to 25,000 kilograms per year (17.5 to 25 tonnes) to achieve the minimum turnover figures required.

Of course you can start in a small way but until you can get your production and sales up you will not be able to support either the business or yourself and you will need to sink cash into the business to keep it going. Aquatic animals need regular and constant supervision so even if you only have a few tanks or ponds they will need to be checked two to three times per day.

The first thing to consider is the thing that most people put last - the marketing. Who is going to buy your plant or animal, what are their requirements for size, condition and quantity. Where is the product to be delivered, how often and how much will the buyer pay ? Is the buyer financial ? Are there other buyers ? You are either going to have to do the marketing yourself or employ some-one to do it for you.

Generally speaking the faster the animal or plant you are trying to cultivate grows the better off you are financially as your risk of the animal or plant dying before you can sell it is decreased.

Trying to economise on food is also a trap - Generally the better the food quality the better the food conversion ratio and the better the growth.

Water is heavy stuff and reducing the height that you pump water is a saving in pumping costs. Also careful selection of the type of pump can save money.

Trying to grow a species that is new or that not been cultivated intensively carries risks of "pioneering" - you may end up going broke discovering all the problems or finding the solutions.

The climatic or culture conditions need to be matched to the requirements of the species being grown. Barramundi like warm water so trying to grow them in cold water is asking for problems. Similarly trying to grow trout in hot conditions will stress the fish and they will not grow at their best.

You need to thoroughly understand the biology of the species you are planning to cultivate, the optimum conditions required for growth and a proven cultivation system or regime and the costs to set up this system and run it.

You cannot set up a fish farm anywhere - sometimes the Authorities, Local Councils and your neighbours will do everything in their power to frustrate your plans. Check before you build that shed or dig that pond.

Talk to as many fishfarmers as possible before you start spending serious money - you will find that it look them 3 to 5 years before they got over all their production problems. Anticipate and expect problems - have your possible solutions ready. If you rely on electicity from the grid then expect that it will go off just when your system is filled to bursting point with animals and 15 minutes without water and air pumps will have them all belly up. Your back up power needs to work anytime and everytime - especially on Christmas Eve. Many fish farmers will have an automatic back up generator to supply electric power when the electricity supply fails - the smart ones have a back up oxygen system as well so that when the electricity supply fails and the generator power board fuses blow then pumping oxygen into the tanks will keep the fish alive whilst you sort out the problems. Back up to back up is the best way to avoid potential problems.

Unfortunately the sound of running water has been known to soften the brain so try to sit down well away from water, put all your plans in writing, double check the figures and ask your partner to double check any assumptions and calculations.

These comments are a guide only and before undertaking any major investment decisions you need to consult your bank and financial advisor or accountant.

REMEMBER AQUACULTURE IS A RISKY BUSINESS

(many aquaculturalists have gone broke)