FISH Feed Production Enterprise, Business

plan.
Executive Summary.

THE BUSINESS
FISH Feed Production Enterprise is a proposed feed making company, the government of Zambia has
in the past few years embarked on aqua-culture farming specifically fish farming. This year, the
Citizens Economic Empowerment Commission (CEEC) a Government body is giving fish
farming loans to individuals all over the country. Since the country will be flooded by fish
ponds by the end of the year, we have decided to take the opportunity of fish feed
production. By producing our own feed and selling them directly, we will have control of the
price we sell for and be able to keep costs down. This will allow us to sell to sectors of the
community that currently cannot afford to buy feed because it is too expensive and can only
be bought from limited monopoly suppliers.

The primary activities of “Fish Feed Production Enterprise” are the production and selling of
Fish. The feed is made from a number of components namely:

Fish meal -Protein and calcium

Salt -Iodine

Flour -Roughage

Cooking Oil -Special Vitamin for poultry

Vegetable -calcium phosphate

Cassava -Starch

Wilting Vegetable -Minerals

PRODUCTION OF LAYER FEED PER 50KG

Production of Fish feed is easy and fast, all that is required is a shovel for mixing and
knowing the right quantity to mix. However, since we intend on going commercial, we plan
on buying a pellet maker and a few other commercial necessities which will later be
indicated. Quantity of making a 50kg bag of the feed is as follows:

1
Fish meal -15kg

Salt -0.5kg

Flour -20kg

Cooking Oil -400ml

Vegetable -5kg

Cassava -1kg

Wilting Vegetable -5kg

FEEDING PROGRAMME
In general, most fish do quite well on one feeding per day. Most fish require 16 to 24hrs to
fully digest the food they eat, so a once a day feeding can be quite sufficient however a
lightly twice a day is advised.

OUR OPPOTUNITY IN THE MARKET

Currently there is a huge opportunity in this market. As at current, prices of Fish feed are as
high as K200 per 50kg bag. We went to one of the leading suppliers of layer feed NOVERTEK,
their prices are as follows: Pellet starter 50kg-K185.00 Pellet grower50kg-K182.00. However,
according to our analysis, Costs are as follows:

Ingredient Market Price Total

Fish meal -15kg*K2kg = K30

Salt -0.5kg*K5 =K2.5

Flour -20kg*K2 =K40

Cooking Oil -400ml*K10per 1000ml =K4

Vegetable -5kg =K20

Cassava -1kg =K3

Wilting Vegetable -5kg =K10

Total =K109.50

2
MANAGEMENT TEAM
Currently, we are two of us in partnership, our company name is ELI-MO general dealers,
and are registered with PACRA and ZRA. We plan to employ 5 Fish feed mixers, 1 delivery driver
and eventually a farm manager. We hope to be able to use our Financial Management skills
and farming skills to develop and market the company.

TRACK RECORD
We have been studying fish feed making since 2013. We have read books and articles and
also have consulted with Agro consultancy firms such as Pro-Agri and Farmers friends. We
have visited other Fish farms and have met with members of organisations related to the
industry. We also once kept.

FINANCIAL PROJECTIONS
Below are the fixed cost, monthly variable cost and future cash flow project:-

FIXED COST

DESCRIPTION QUANTITY PRICE TOTAL

Fish feed pellet machine 1 16,000.00 16,000.00

Solar fish feed pellet machine 2 65,000.00 130,000.00

Transport to Zambia 1 10,000.00 10,000.00

Construction of machine house 1 10,000.00 10,000.00

166,000.00

3
VARIABLE COST

DESCRIPTION UNIT QUANTITY PRICE TOTAL

Sacks 95 1 600.00 600.00
Water 1 1 500.00 500.00
Electricity 1 1 1,000.00 1,000.00
Fish meal 1000 1 1,000.00 1,000.00
Salt 50 1 400.00 400.00
Flour 50 2 600.00 1,200.00
Cooking Oil 40l 2 400.00 800.00
Vegetable 1 1 500.00 500.00
Cassava 1 1 600.00 600.00
Wilting Vegetable 1 1 200.00 200.00
Transport 1 1 500.00 500.00
Marketing 1 1 500.00 500.00
Incidental 1 1 5,000.00 5,000.00
12,800.00

REVENUE

The cost of producing a 50Kg of fish feed is K109.5 as illustrated on page 2 and the market
price is K170 to K200, to beat our competitors, we shall be selling at K150. We expect to sell
more than 60 bags of Feed in the first month while we shall be producing more than 100
bags. After three months we expect our operation to stabilize, by producing 200 bags of
50Kg fish feed on a monthly basis, the cost of producing fish feed in a month is K7,800 and
the cost of sale is K200, giving us a revenue of K30,000. We expect to be having a monthly
net profit of K22,200.

THE MARKET
The potential market for Fish feed at the right price is huge in Zambia. With a high pricing
starting from about K185.00 per 50kg bag (note: these are NOVATERK prices as at date), we
plan on flooding our feed at K150.00 per 50kg bag still leaving us with a 70% plus turnover.
Entering the market with this strategy will help win us a lot of customers. The current
manufacturers only sell to agencies therefore monopolising the market and setting a fixed
market price. Therefore, with this strategy, it will help in the de-monopolisation of the feed
pricing.

We plan to initially sell to people that will be given CEEC loan as our first target market then
later on sell to our clients in the Fish production sector

4
MARKETING
Our primary form of marketing will be through placing advertisements in local newspapers.
By targeting newspapers that are popular with the demographic that we are aiming at and
running adverts weekly, radio stations and TV stations. Due to completion in the media
industry, advertisement costs have been slashed to affordable prices as low as K50.00 for
radio stations. We should reach a significant number of potential customers. We also plan
to put up flyers around the neighbourhoods where our potential customers live. We will be
asking as many people as we can to tell people about our business and the value for money
products that we sell, this will also bring in more customers.

When we have established a client base, we can start to introduce loyalty discounts for
repeat customers and bulk buy discounts for those with the ability to store larger quantities.
As our product range increases more customers will be attracted to our shop. We are
considering a website, but this is currently beyond the reach of most of the people we are
aiming our products at, so this will be the subject of a cost benefit analysis before it is
implemented. We may use twitter and Facebook because many people have mobile smart
phones.

TIME MATERIALS AND FINANCIAL COMMITMENTS

We are totally committed to Fish Feed Production Enterprise It is something we believe
passionately in. Apart from providing us with an opportunity to earn a good living, we
believe it can provide us with opportunities to create jobs for some of the people in our area
and to provide a good source of food to people that at the moment cannot afford it. We
believe this business can help us to play our part in the development of our nation and to
change the lives of both our customers and our future employees in a way that is
sustainable, ecologically sound and would only have beneficial impacts on the environment.

OPERATIONS
We plan to remain in overall control of the business and to direct operations as necessary.
We will employ people to tend the feed making process as the business grows, this will
allow us to focus on developing and Marketing the business. When we open a shop for the
retail side of the business will need to employ a shop manager and a shop assistant, and
eventually we will also employ a delivery driver. We also recognise that we will need to
employ an accountant or at least a book keeper. Initially this will be a part time position but
eventually it will be full time when there is sufficient work to warrant it. All of the positions
will only be filled when there is enough work to warrant their employment and sufficient
funds coming in to cover their wages.

5
RISK ASSESSMENTS
There are a number of potential risks to the business. The main risks that we have identified
are as follows:-

 Economic risk caused by an unstable national economy. Global economic down-

turn causing a drop in demand for copper, in turn this increases unemployment in
Zambia and increased inflation. Rising costs in feed products. This leads to increased
product prices to the customers who have lower levels of income. The end result is
the market for the product shrinks and feed becomes harder to sell. By ensuring the
feed production is carried out as efficiently as possible; only using enough feed to
reach the optimum lay for the birds, the effects of inflation on the production of
feed and eggs can be minimised. If our feed prices remain constant in a time of
inflation our market will increase rather than decrease.
 Other producers entering the market. The potential market for feed in Lusaka is so
large that other producers entering the market will have little impact on the
business. This situation may change in the future if a large number of producers
enter the market but this will take a number of years and the business can adapt as
the market develops. The situation is such that keeping up with demand may be a
problem in itself.