Large Scale Aquaculture Farm for Grouper & Abalone in Philippines

Opportunity Snapshot

  • Country: Philippines Philippines
  • Industry: Agriculture
  • Stage: Start-up
  • Investment size: $1,600,000 / min. $650,000
  • Type of investment: Equity

Investment Opportunity

My plan is to build a large scale seafood farm, farming high end species such as Grouper and Abalone. This will be exported live to the HK and China markets.

I am an entrepreneur from Manila, Philippines. I am a former BPO/Call Center executive in the Philippines and have my own BPO consultancy.

For the past 18 months I have been studying the Aquaculture Industry as I own 32 hectares of coastal land in Sagnay, Camarines Sur, Bicol Region, that's been declared a "Mariculture Zone" by the Philippine Government. This simply means that the land has been deemed perfect for aquaculture and they offer tax holidays, tax breaks etc.

The project is a start up. My plan is to build a large scale seafood farm, farming high end species such as Grouper and Abalone. This will be exported live to the HK and China markets. I have hired a Norwegian consultant to help me do the feasibility study, examine the land and come up with a business plan. I have also connected to all suppliers, government agencies etc and have made a connection in China for buyers. The project will scale to 2000 metric tons of seafood in 5 years equaling to $20M in revenue.

I need $1.6M for my project. I offer equity. I am open to negotiations in equity.

Competitive Advantage

Advantages related to the project location & scope
• Coast of town of Sagnay, Camarines Sur, Bicol Province, Philippines. Class 4 municipality with population of 29,000 with an abundance of potential local workers.
• Privately owned (Titled) land area of 32 hectares.
• Government leased marine area of 25 hectares. Ocean depth of 25-50 meters. Suitable for bottom dweller species.
• Newly built concrete highway along the land area. Access to domestic airport (Naga) by land in 30 minutes. Access to international airport (Legaspi) by land in 90 minutes. (2012-2013)
• Access to local port area in 5 minutes.
• Access to 12 more hectares of land (cadastral papers) in 5 minutes.
• Land is declared ‘Mariculture Zone’ by the Bureau of Fisheries and Aquatic Resources (BFAR) Philippines.
• Land is protected by islands in front and mountains behind from strong winds and typhoons.
• Mariculture Zone status comes with tax incentives, tax breaks and infrastructure grants.

Advantages of the Integrated Mutli-TrophicAqauculture method
• Quality Control (Together with hatchery)
• Eco-friendly and environmentally responsible
• By products (Seaweed and Mussels) can be sold for additional revenue
• Longer use of ocean area for farming
• Lessens fatality rate of harvest
• Globally being accepted as method for responsible fish farming
• Tax benefits and infrastructure grants from Philippine government
• Promotes positive reputation for company especially when we enter NA and EU markets

Rationale for the deal

Quick facts about the live reef food fish (LRFF) according to our market study:
• HK imports 85,000 metric tons of LRFF per year. 60% of imports are reexported to China
• Value of $US 850 Million per year
• Live Grouper imports to HK are 38,000 metric tons in 2009 (By air only)
• Live Grouper imports to Singapore 2000 metric tons in 2009 (By air only)
• 2009 report from Roland Berger Strategy Consultants indicates that between 84% and 88% of respondents (Chinese cosumers) professed a preference for green products, and over 90% said they would choose green products.
• Groupers fetch higher prices live than any other group of top-grade fish, and a price of 3-5 times or more is paid for live specimens at the right size - 600-1000 grams. A premium is also paid on products with “clean”, “green” and “organic” credentials (10% - 50% premium for foods carrying China’s GreenFood certification)
• HK imported $19USD billion of fish and other aquatic products in 2009
• There is a global shortage of 40,000-60,000 tons abalone per year worth $1.2 Billion

Our products and services:

Year 1-2:
Asian Seabass 20% , Pompano/ Cobia, 20%, Grouper 60% and Abalone.
Minor species are mid value but easy to grow for quick cash flow and return. Also easy
grow species are for training purposes of farm staff.

Year 3-5:
Brown Grouper, Red Grouper, Giant Grouper and Abalone
Year 3 will introduce hatchery for grouper and abalone which are high value and long grow out species.
• By-products from IMTA are seaweeds and mussels for local market starting Year 1.
• Any excess from hatchery can be sold to other fish farms starting Year 3.
• IMTA and own hatchery will set our business apart from others as growing awareness of eco friendly seafood is increasing in Asia.
• IMTA also sets up farm for references on NA and EU markets through seafood
consultancy such as BlueYou, who provide suppliers to top 10 buyers in EU and NA.

Year 4 and onwards:
• Introduce new species (species may depend on market demand) for NA and EU markets. Species, maybe organically grown tilapia (farmed and processed) and organically grown black prawn shrimp (farmed and processed)
• Introduce first Live Seafood Grocery in Manila, Philippines for upper segment market. Grocery will feature out products as well as other products from reputable suppliers.

Use of financing

Breakdown of Investor Capital
For 600 metric ton capacity:
1. Marine Facilities
2. On Shore Facilities
3. Two years harvest fingerlings and feeds
4. Support and services
5. Shipping and logistics

Breakdown of Bank Loan
For 2000 metric ton capacity:
1. Marine Facilities
2. On Shore Facilities
3. Hatchery
4. Support and services
5. Shipping and logistics

Opportunity for the investor

We are looking for a joint venture in exchange for equity. The business is expected to bring $20M annual revenue in 5 years.

• Investor Capital: 650,000 (Minimum)
• Loan Requirement: 965,000
• Loan Repayment Schedule: 10 years maximum. Est. 100,00o a year with interest. 38% debt ratio.
• Break Even Point: 18 months
• Return of Investment: 36 months

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