contemporary aquaculture technologies fish markets and export armenia

68 Pages·2016·5.08 MB·English

by  World Bank Group

d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
Photo by G. Gabrielyan
d
e
z
ri CONTEMPORARY AQUACULTURE
o
h
ut TECHNOLOGIES
A
e
ur FISH MARKETS AND EXPORT
s
o
cl
s
Di ARMENIA
c
bli
u
P
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
This material is developed in cooperation with the
Ministry of Economy of the Republic of Armenia
and the Development Foundation of Armenia.
Ministry of Economy of the Republic of Armenia
© 2015 International Finance Corporation. All rights reserved.
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433
Internet: www.ifc.org
The material in this work is copyrighted. Copying and/or transmitting portions or
all of this work without permission may be a violation of applicable law.  IFC does
not guarantee the accuracy, reliability, or completeness of the content included in
this work, or of the conclusions or judgments described herein, and accepts no re-
sponsibility or  liability for any omissions or errors (including, without limitation,
typographical errors and technical errors) in the content whatsoever or for reliance
thereon.
FOREWORD
The strength of each country is its economic base. Fish farming can be a key
element of a country’s economic base and represent a segment of the population
with a unique culture. Development of fish farming in Armenia is largely influ-
enced by the rich experiences and effective management of economic entities en-
gaged in the area, which in turn make the sector both profitable and promising.
Although the industry is quite developed, the value creation chains, regional
integration, new technology development, strategic planning, and especially export
mechanisms need improvement.
At the same time, studies show that the sector has significant unused resources:
the rational use of such resources may produce beneficial outcomes.
With a view to fulfilling the aforementioned intentions, and in light of the pecu-
liarities of the sector, the International Finance Corporation (IFC), a member of the
World Bank Group, introduces this brochure in addition of the Fish Export Chain
Mapping review of September, 2015, within the scope of the Armenia Investment
Climate Reform Project jointly implemented with the Ministry of Economy of the
Republic of Armenia (RA).
Undoubtedly, this new guide can become a useful source of information for fish
industry development and export promotion in Armenia. Moreover, recommenda-
tions from international experts will contribute to an increase in the efficiency of
activities of fish and associated servicing industries, hence creating conditions not
only for further development of the industry and an increase in productivity, but
also for an increase in investments, production and export volumes in this tradi-
tional now sector, which will, in turn, open up new development prospects.
Vahagn Lalayan
Head of the Department of Investment Policy
Ministry of Economy of the Republic of Armenia
ii
ACKNOWLEDGMENT
The booklet is developed by IFC Armenia Investment Climate Reform Project,
which is implemented by the World Bank Group (WBG) Trade and Competitive-
ness Global Practice, in partnership with Austria’s Federal Ministry of Finance and
Hungarian Partnership Funding/Hungary EXIM Bank, at the request of the Minis-
try of Economic Development and Investments and the Development Foundation
of Armenia.
The Contemporary Aquaculture Technologies booklet is prepared by Mr. Mar-
cel de Rooij, WBG International Expert. The Fish Markets and Export booklet is
prepared by Mr. Andrew Kaelin, WBG International Expert. Works were assisted
by Mr. Gagik Gabrielyan, WBG Consultant.
Prior to this booklet, the Project, at the request of the Ministry of Economy
of the Republic of Armenia and the Development Foundation of Armenia, devel-
oped and published the “Armenia Aquaculture Sector Review” in September 2015,
which lead to lively discussions among the participants of the workshop. In De-
cember 2015, the Project organized the workshop on “Food Safety Standards for
fish production, new technologies and export market analysis” during which the
international experts presented the possibility of implementing new technologies
in fish farm operational management and analyzed the competence of the Arme-
nian fish industry product and export market in order to sketch out the global
picture for further opportunities for export-oriented development.
The Project would like to thank the representatives of business entities and
public authorities (Ministry of Economy and Ministry of Agriculture) for their ac-
tive participation in the discussions, as well as all those organizations and individ-
uals that so readily gave of their time and expertise, thereby making a significant
contribution to this booklet. In this regard, we would like to extend our special
thanks to Mr. Arkadi Gevorgyan, fish farmer, for his valuable contribution.
iii
Table of Contents
CONTEMPORARY AQUACULTURE TECHNOLOGIES
1. INTRODUCTION .....................................................................................2
2. FARM GATE COSTS/PRICE .....................................................................3
2.1. Fixed costs ..............................................................................................3
2.2. Variable costs ..........................................................................................3
2.3 Profit and profit margin ...........................................................................3
2.4. Cost driver ..............................................................................................3
2.5. Farm management ..................................................................................3
3. BASICS OF FISH FARMING .....................................................................5
3.1. Feed ........................................................................................................5
3.2. Oxygen ...................................................................................................9
3.3. Water environment ................................................................................16
4. PRODUCTION EQUIPMENT ................................................................19
4.1. Hatchery ...............................................................................................19
4.2. Purchase eggs or harvest from own brood stock ..................................22
4.3. Grow out ..............................................................................................22
4.4. Examples of financial calculations .........................................................29
4.5. Considerations for recirculation aquaculture system .............................29
4.6. Water availability/usage in Armenia ......................................................31
4.7. Multi-pass systems outdoor ..................................................................31
5. FARM MANAGEMENT .........................................................................33
5.1. Feed conversion ....................................................................................33
5.2. Production volume ................................................................................37
5.3. Monitoring ...........................................................................................38
6. SUSTAINABILITY ...................................................................................39
6.1. Marketing value ....................................................................................39
6.2. Certification ..........................................................................................39
7. FISH FARM PRACTICAL CALCULATIONS AND DETAILS .................40
7.1. Fish farm – scenario 1 ...........................................................................40
7.2. Fish farm - scenario 2............................................................................41
7.3. Financial figures for fish farms (scenario 1 and 2) ................................44
7.4. Evaluation of fish feed...........................................................................45
7.5. Determine water flow............................................................................46
FISH EXPORT AND MARKETING
1. INTRODUCTION ...................................................................................49
2. PRODUCTION COST .............................................................................50
3. PRODUCT FORM AND TARGETING NEW MARKETS ......................52
4. MARKET PRICE .....................................................................................55
5. TARGET MARKET .................................................................................56
6. TRADE SHOWS ......................................................................................57
7. INTERNATIONAL PROCESSING CONTROL REQUIREMENT .........57
8. BRANDING AND MARKETING ...........................................................60
iv
Photo by M. de Rooij
CONTEMPORARY AQUACULTURE
TECHNOLOGIES
1. INTRODUCTION
Fish farming has been carried out for centuries and is essentially fairly simple. It
becomes a challenge when it is used for commerce. The ability to successfully man-
age the complications of an intensive and cost-efficient fish farm makes the differ-
ence between a healthy enterprise and a struggling one. This brochure highlights
the major complications associated with intensive and cost-efficient fish farming.
In Armenia, there are a number of pro and cons to its relationship with fish
farming. Armenia has abundant clean water sources. The water has limited sus-
pended solids and little to no dissolved nitrogen. The effect of urbanization is also
very limited, and water availability varies based on geographic location. Labor
costs in Armenia are also low compared to European Union (EU) countries.
However, Armenia’s geographical location presents a challenge. Feed, eggs, and
equipment have to be imported, mainly from the U.S. and EU, which adds extra
transportation costs that have significant impact especially on the cost of feed.
Trout and Siberian sturgeon are among the main species of fish farmed in Ar-
menia.
There is a lot of information published on standard practices relating to trout
farming (www.thefishsite.com, www.fao.org), while sturgeon farming has not been
intensively researched and there is little published information about it.
Sturgeon is farmed mainly for its high-priced caviar and, as a secondary prod-
uct, its meat. On the international market, sturgeon meat is a less common product.
To be a player on the international fish market, a fish farm must be competitive
in three main areas:
Ž Consistent quality,
Ž Sufficient volume,
Ž The right sales price.
For the last area in particular, farm gate prices are very important. To obtain a
competitive farm gate price, several topics have to be addressed and are discussed
in this brochure, along with common perspectives of fish farming.
2
2. FARM GATE COSTS/PRICE
The farm gate price consists of three major components: Fixed costs + Variable
costs + Margin.
2.1. Fixed costs
These are the costs that recur each year no matter how much the fish farm pro-
duces, for example indirect personnel costs, investment interest, etc.
2.2. Variable costs
These costs depend on the production volume, for example direct personnel
and feed costs.
2.3 Profit and profit margin
Profit is the surplus revenue remaining after total costs (including production
costs, depreciation, interest, taxes, and other expenses) are deducted from total
revenue. Profit margin usually refers to the profit as percent of sales revenue.
2.4. Cost driver
The main cost driver of every fish farm is the price of feed, calculated per ki-
logram of fish growth. The price of a kilogram of fish growth depends on the feed
price in combination with the feed conversion ratio.
Feed conversion ratio (FCR) is the ratio between the dry weight of feed fed and
the weight of yield gain, measure of the efficiency of conversion of feed to fish (e.g.
FCR = 2.8 means that 2.8 kg of feed is needed to produce one kilogram of fish live
weight).
A common misconception is that cost savings can always be achieved
by purchasing cheaper feed.

The m𝑪𝑪𝑪𝑪e𝑪𝑪th𝑪𝑪 o𝒑𝒑d𝒑𝒑 𝒑𝒑o 𝒌𝒌f 𝒌𝒌ev.𝒇𝒇a𝒇𝒇l𝑪𝑪u𝒇𝒇a t𝒌𝒌in𝒑𝒑g𝑪𝑪 𝒈𝒈th𝑪𝑪e𝒇𝒇 c=os𝑭𝑭t 𝒑𝒑p𝒑𝒑e𝑭𝑭r 𝒑𝒑k𝒑𝒑il𝒇𝒇o𝒑𝒑g𝒑𝒑r×am𝒇𝒇 𝒑𝒑fi𝒑𝒑s𝑭𝑭h 𝒑𝒑i𝑪𝑪s 𝒄𝒄d𝒄𝒄es𝒑𝒑c𝒑𝒑r𝑪𝑪ib𝒇𝒇𝑪𝑪e𝒄𝒄d 𝒑𝒑in𝒓𝒓 𝑪𝑪s𝒇𝒇e𝑪𝑪ction 3.1
and chapter 7.
2.5. Farm management
There are three main factors that are critical to sound farm management.
3
2.5.1. Growth
There is only a daily contribution to fish farm revenue if fish grow every day.
This is achieved by maintaining the right standing stock, providing the optimum
feed volume over the course of the day, and careful management.
2.5.2. Mortality/loss
When a fish dies or is deformed in any way, it cannot be sold, and the feed
invested in the fish is considered a 100 percent loss.
2.5.3. Feed conversion
As feed costs are the cost driver and the feed purchasing cost is fixed, the farm-
er can manage the feed conversion ratio through sound management. Good man-
agement means a ensuring a proper feeding schedule, grading, oxygen availability,
and reducing feed spill.
The farm gate price is reduced when there is higher production per cubic meter
of water and lower mortality.
4