Tilapia farming is a agricultural business. There are many ways to farm with tilapia and this is the way that we do it.
1. We farm with the only commercially viable species, oreochromis niloticus. This has been classified as an invasive species. You will require a permit to hold any live specimens. No permit, no live fish. Permits are not being issued in the provinces of Limpopo, Mpumalanga and KZN and yes, the irony is not lost on us.
2. We farm using semi intensive RAS systems which we call APUs for entry level farming. We also farm using high intensity RAS at higher production levels. APUs are appropriate production models for farms up to 100 tons per annum. Above 100 tons per annum, high intensity RAS systems are financially more attractive but these start at an investment level of R2m and head upwards to R500M+ in remarkably short order, and you will need considerable experience in order to be able to manage these (or very deep pockets to buy these skills in). Above 100 tons per annum your APUs will be used in the nursery and hatchery components of your business – there is never a dead loss in investment in other words.
3. We will consult on projects that involve other species or other production techniques. We’ll quote you on this depending on scale and scope. APUs are NOT species specific and can be tailored to suit different species.
4. We do not offer training. Everything you need to know can be found online but our sister company does offer a training course that will dramatically speed up the process.
5. We do not sell bass or carp or catfish fingerlings. We occasionally offer mossambicus for non commercial purposes – stocking of dams, aquaponic usage, or as a substitute species when awaiting a niloticus permit.
6. Selling your fish is part of your business development and probably a good portion of why you wanted to become a fish farmer in the first place. If we buy in fish from you it will be at a lower price than if you sold them yourself.
7. We do not borrow or lend money to start a fish farm business. If this is you you are in the wrong business.
8. We start small. If you cannot prove that you can grow a fish you have no business. We spent 4 years learning how to grow fish. It should take you between one and a half and two years now that we can give you the right tool to use. Buy one. Use it. Prove you can grow fish. Then expand your operation to commercial levels. Do not begin at commercial levels only to then discover you have a lot to learn. We can not save you. You have been warned.
9. We selected tilapia for simple reasons. We developed our own internal classification system in which species are categorised into one of two options. We call these Open or Closed Loop species. Tiliapia, in this case, niloticus is what we consider a Closed Loop species because it is able to robustly satisfy criteria posed as 4 simple questions, namely:
- Can you breed them?
- Can you feed them?
- Can you grow them?
- Can you sell them?
Within each of these questions we have a robust set of criteria that have to be fulfilled. By way of example, being able to breed a fish does not mean that a theoretical spawning once a blue moon after the winter solstice is sufficient evidence to prove that a business which has constant need of supply of fish, literally on a daily basis, will work. A case in point is kabeljou. Yes they can be bred, eventually. However, replicable breeding on demand is not as yet sufficiently well proven to a level on which a business case can or should be based. Of perhaps more importance however is that if an internal breeding program is disrupted for whatever reason there are no other kabeljou breeders from which fish can be acquired, at any price. Hence production is at significant risk should there be a failure in breeding, and there is not adequate risk mitigation to be able to solve the problem from external sources. The same is not true for niloticus which can be imported from literally just about anywhere on the planet in the event of an emergency.
10. Tilapia is a proven species globally. It is not yet proven locally. However, progress is slow and steady and we believe that there is a commercial case to be made for it. No matter what, however, knowing how to farm the species is an absolute requirement – if you have not farmed with fish before it makes no difference how good or how bad your business plan is. No skills, no experience, no farmer, no business. As obvious as this sounds, we’ve all been seduced by the dark side of the spread sheet.
Your decision is an easy one. If you want to farm with tilapia, then start. An APU is going to cost you R30k ex VAT and this is the tool you can use to farm with and be up and running within a few hours. Once you have mastered this and once you understand the impacts of the environmental conditions on the farming process THEN you can start to build an actual business based on actual data – not even we can predict how good or how bad a farmer you are going to turn out to be.
If you don’t want to plonk down R30k ex VAT
All fish farming revolves around 4 key principles when it comes to species selection.
Can you breed them?
Can you feed them?
Can you grow them?
Can you sell them?
We are going to step you through the process of what building a successful fish farming business is all about. There are some hard truths in this and whilst we are focussed on tilapia this is only as an example.
Note that we use the word business. We are commercially focused in other words and in order to be successful in what is essentially a brand new industry means you need to know what you are doing.
In any business there are two big broad areas to be considered. Firstly there is the Production of a good or service and secondly there is Selling that good or service. We’re doing that right now – our product is the APU and the process of selling it is this website that tells you what this product can do for you.
However, we have found that most people who want to start fish farming have no idea what fish farming is all about and that we have to teach them before we can sell them anything.
Quite often this means we lose sales. But rather that than selling something on false pretenses, BEBTA style.
So let’s begin. Quite often the emails that come in read along the lines of “I want to farm fish – I have water and land”.
Further interrogation will sometimes reveal that the four big questions haven’t been thought of yet.
What do you want to farm?
How do you want to farm it?
How much of it do you want to farm?
Where do you want to farm it?
All of this fits into the Production side of the business. Some questions come in about the Selling side of the business – such as “I want to farm fish but I don’t know where I can sell my fish?”
It is hard to know how to sell fish if you don’t know how many fish or even what fish it is that you want to sell.
The way to start the process is to consider a few different scenarios in broad terms. For instance, we always find it useful to decide on an annual tonnage target of production of fish, or to consider an annual profit target. This will start to give you some broad ideas as to the scale of these things.
For instance, if we take 20 tons of fish production per year, 20,000 kg of fish, and we sell that for R45/kg for an annual turnover of R900k. If we produce the fish for R35/kg that leaves a profit of R200k. These are just rough and ready numbers of course but if we drill down into them we can get a sense of the scale of operation needed to produce this level of tonnage. 20 tons per annum breaks down into 1.67 tons of fish every 30 days which is 4,166 fish of 400 grams each. Loosely this is about 1,050 fish every week.
What this simple rough math has already done for us is to give us a sense of what is involved. Of course it assumes perfect and linear production which may or may not be possible. The sales price and the cost of production figures are just a guess at this stage and the next step is then to check these two figures to a higher degree of detail to see if they are even achievable, or realistic.
What we need now in other words, is the dreaded spread-sheet.
Spread sheets are incredibly powerful amplifiers of assumptions. If you assume something to be fact and it turns out not to be fact the spread sheet will exaggerate the differences in such a way that it is not in your favour. This is called Murphy’s Law. Do not assume anything without a sound basis to do so and the words “the expert opinion was….” will not hold water when the auctioneer is selling your equipment to the highest bidder for between 5% and 10% of what you paid for it.
BS in = Super BS out when it comes to spreadsheets in other words.
We probably need to decide on a species we want to farm first. We can revisit this later on once we have carried the exercise through to completion – and in our case the species we will be looking at is tilapia for a number of cogent and valid reasons which are detailed in the business planner that you can buy from us. Or you can do all the homework and research yourself and save yourself the five hundred bucks.
Now that we have a species the question becomes one of addressing how we produce it and how we work out what it costs to produce it. Once we have the Production side of the business documented and understood then we can look at the Selling side of the business. And once both Production and Selling are done we’ll be in a position to see whether the business makes sense or not.