How to Start a Fish Farming Business in Nigeria

HOW TO START A FISH FARMING BUSINESS

By Ayoade Apelegan

Fish is a healthy and nutritious source of protein which is popular around the world. Industrial fish farming, or aquaculture, provides almost half the seafood around the world and this is expected to increase with time as more people are embracing fish farming due to its lucrative nature.

One of the most lucrative businesses one can venture into is fish farming business. Fish farming can also be referred to as aquaculture. Fish farming is one of the most common types of farming.

Fish farming business is the system in which fishes are reared either sale or for consumption.

A good way to venture into the agriculture industry and generate some good income id through fish farming. 

Whether you are a new farmer hoping to start a fish farming business or an existing farmer looking to expand your capacity, contact us at MATOG CONSULTING for your comprehensive business plan and feasibility study.

Benefits of Fish Farming

Huge Demand

Fish is one of the main sources of protein, fish is widely consumed on a large scale. Thus, the demand for fish is stable all year round. Fishes are known to grow rapidly. So, investing in a fish farming business will result in huge patronage and source of cash flow.

Affordability

It is a known fact that fishes are cheaper when compared to most meat products and hence, sells faster. It is an attractive venture as it remains the top choice for consumers in terms of affordability.

Rapid Growth

The growth pattern of fish is fast. This singular characteristic of fishes ensures that fish farmers can harvest and sell in a short time.

Low Cost of Set-Up

Fish farms are easy to set up. It can be set up in residential areas as well as on a large scale.

Fish farming can be easily practised alongside any type of farming.

Fish farming business is one of the most lucrative agricultural business one can venture into.

Click here to read How to Grow Your Business Through Export of Goods and Services

Methods of Fish Farming

Fish farming may range from ‘backyard’ subsistence ponds to large scale industrial enterprises. Farming systems can be expressed in terms of input levels.

Extensive fish farming: In extensive fish farming, inputs such as economic and labour are usually low. The type of feed employed is natural fish. The system’s productivity is relatively low. Fertilizers are used to increase fertility and thus fish production.

Semi-Intensive fish farming: This involves higher labour and feed costs, as well as higher fish yields, compared to the extensive fish farming method. It requires a moderate level of inputs and fish production is increased by the use of fertilizer

Intensive fish farming: This type of fish farming method involves a high level of inputs and stocking the ponds with as many fish as possible. The type of fish feed employed here is the supplementary feed, while natural feed plays a minor role.

The target market for fish

Hotels

Eateries

Restaurants

Households

Exporters

Frozen food sellers

Types of fish to consider when starting a fish farming business

Tilapia

The tilapia fish is an inexpensive, mild-flavoured fish.

The following attributes of the tilapia fish make it one of the most widely cultured fish in fish farming.

  • grow rapidly at warm temperatures;
  • good tolerance to poor water quality;
  • they eat a wide range of natural food organisms;
  • it grows quickly and consumes a cheap vegetarian diet.

Catfish

Catfish is the most common type of fish reared when it comes to fish farming businesses. This is because the catfish market is a large one as there is always a demand for it all year round. When it comes to feeding, it is important to feed your catfish with good quality feed to ensure fast growth and optimal size.

Some characteristics of catfish are:

  • It is widely acceptable;
  • It can be cultivated anywhere;
  • Catfish breathe fresh air from the atmosphere;
  • Catfish can survive harsh climatic and water conditions;
  • can be processed either for domestic or export purposes;
  • It can survive and grow in brackish and low oxygen water.

Factors to consider when starting a fish farming business    

Registration of Business

Whenever one decides to start a business, registering the business is the first thing to do. It saves one from a lot of legal issues when one registers the company.

Registering a company, in simple terms, means letting the government know you now own a business and that your business name is yours.

In Nigeria, the Corporate Affairs Commission is the Agency authorized by the Company and Allied Matters Act 1990 to register businesses.

Since fish is a major source of export in Nigeria, it is also important to register as an exporter.

If you are considering exporting fish from Nigeria, you will be required to register with the Nigerian Export Promotion Council (NEPC). Registration as an exporter can only be done using the e-registration platform. The page contains all the required information needed to obtain an Exporter’s Certificate.

 Benefits of registering with Nigerian Export Promotion Council

  • Trade promotion support services 
  • NEPC administered (pre- and post-) export incentives
  • Numerous training, clinics, seminars, and more
  • A network of exporters to collaborate and exchange ideas.

Guidelines & procedures

There are documents required for completing the registration process. The documents depend on the type of company involved in the export process.

DOCUMENTS FOR LIMITED LIABILITY COMPANY

  • Certificate of Incorporation (issued by the Corporate Affairs Commission)
  • Certified True Copy of Memorandum and Articles of Association
  • Current Certified True Copy of Form CAC 1.1 – “section C” (Particulars of Directors).

DOCUMENTS FOR CO-OPERATIVE SOCIETY

  • Certificate of Registration (issued by State Ministry of Commerce, Local Governments and Federal Capital Territory Area Councils)
  • Bye-Laws of the Society

DOCUMENTS FOR GOVERNMENT AND NON-GOVERNMENT ORGANIZATION

  • Certificate of Registration (issued by the Corporate Affairs Commission)
  • Constitution of the Government Organization and non-Governmental Organization
  • Memorandum for Guidance of Applicant

 Fees & Charges

The following are the costs associated with obtaining an exporter’s certificate excluding bank charges.

  • New certificate registration – ₦13,500
  • Expired certificate renewal – ₦7,500
  • Late certificate renewal (after Three months of expiry) – ₦12,500
  • Lost/mutilated certificate – ₦12,500 

Payment can be made through the following channels

  • Nigerian local cards
  • International credit / debit cards
  • Internet banking
  • Commercial bank branches in Nigeria

A company’s duties and obligations continue after incorporation.

This new status of incorporation endures indefinitely – subject to the observance of a set of conditions stipulated by the CAMA and enforced by the CAC. These set of conditions/activities are known as Post-incorporation Matters.

Post-Incorporation requirements for a fish farming business

Below are some requirements expected of a fish farm owner.

Business Entity Concept

According to the business entity concept, every business is considered to be separate and distinct from its owners. Business transactions are recorded in the books of accounts from the business point of view and not owners.

Owners being separate from the business are considered creditors of the business to the extent of their capital.

Keeping a Separate Bank Account

One of the most important things a newly incorporated company should do is to open a bank account for their business. Most business owners make the mistake of using a personal bank account for their business.

Having a separate account for your business will enable you to easily separate your business and personal expenses, which will help you reconcile your accounts when it’s time to complete your annual returns.

Separate own account from the business account.

Tax Registration

A company incorporated in Nigeria is required to be registered with the relevant tax authorities for tax purposes. Following the incorporation of a company, a Tax Payer Identification Number (TIN) is automatically generated for the new company. This TIN is to be used when remitting taxes due to the Federal Government. Taxes imposed by State Governments require separate taxpayer registration.

Filing of Annual Returns

The Annual Returns of a company is a yearly statement which gives essential information about a firm’s composition, activities, and financial position, and which must be filed by every active incorporated firm with an appropriate authority.

In Nigeria, it is a statutory requirement that all duly registered businesses and companies submit their annual returns yearly to the CAC.

New companies may not file its return within the first 18 months of its incorporation, while for older companies, the annual return is due no later than 42 days after its Annual General Meeting. Section 374 CAMA.

For Business Names

Partnerships, Business Ventures and all other types of organizations registered as Business Names need not submit Annual Returns for their first year of operation after registration. For subsequent years, however, the business is required to file its Annual Returns and make payments of the applicable fees on or before the 30th day of June of each year.

Very vital importance is that filing of the annual return by a company helps to keep the Corporate Affairs Commission (CAC) aware that such company is still actively in operation and still engaging in business activities or otherwise.

Get a tax advisor

It is always a good idea to get a tax advisor. A brief meeting with a tax advisor can give you valuable insight into how you should file your taxes as an entrepreneur.

Keep Records

Keeping good records is vital for any business. Whether it’s to help manage your costs, whether it’s for legal, regulatory or tax purposes, or simply to help manage and improve your business.  Collecting, storing and effectively analyzing your data is vital.

Obtain Necessary Permits

It’s always necessary to get one’s business registered with a related body. This is because most businesses are supervised by associations. Often, there are fees to be paid before becoming a member of these associations.

Land / Site Selection

The importance of land cannot be overemphasized when it comes to agriculture.

The type of pond to be used for fish farming goes a long way in determining the land selection.

For earthen ponds, factors such as Flood history, environment, soil type, soil texture and soil composition should be considered when setting up a fish pond. The land to be used for fish farming should be free from harmful activities such as; pollution, industrial waste and domestic waste. Factor such as the source of water is also considered.

Coastal areas and the areas near rivers and stream are suitable for establishing fish farming businesses.

Aquarium or fish tank or pond

Fishpond is a great alternative to natural water reservoirs. With the construction of a fishpond, fish farming can be in a controllable environment. There are different types of fish ponds available to a fish farmer; such as:

  • Earthen Pond: Earthen ponds are mainly constructed from soil materials
  • Concrete Pond: concrete ponds are the type of ponds wherein blocks are used to construct the pond above the ground level, using cement, gravel and sand. Concrete ponds are used for intensive fish farming. Concrete walls eliminate erosion due to currents caused by mechanical aeration, waves generated by the wind and fish activities.
  • Fibre Pond: This is a type of pond also known as a plastic fish pond. It is constructed by carving a tank out of a full tank. One advantage this type of pond has over the other types of the pond is that it can be moved from one place to another.

One needs to engage the services of a pond construction engineer and also ensure that the plumbing work is properly done to ensure proper drainage.

Water Pump

The use of a water pump is to ensure the fishes have adequate freshwater by filling the ponds, or tanks with fresh water from the source.

They also came in handy when you choose to drain the ponds at the end of the growing cycle.

Aeration Devices

Aeration is of vital importance in fish farming. Water quality is vital to the financial health and productivity of fish farming. Aeration devices are to ensure an adequate supply of oxygen to the fish. Aeration devices also make it easier to recycle water after removing impurities

Net or Seine Reels

Nets and seine reels are a large wall of netting deployed around an entire area or school of fish. The seine reels and nets are used in harvesting fish from the pond or river as the case may be.

Handling and Grading Equipment

Handling and grading equipment is used to grade and separate fish according to their sizes.

Two types of fish grading equipment are:

  • Manual fish graders: Manual fish graders are made of boxes that are fitted with different sized screens, each relating to a range of physical fish size. It allows small fishes to go through the screen while retaining the larger ones in the box.
  • Mechanical fish graders: Mechanical fish graders is a machine that is used in grading fish into different size.

Water Testing Kit

Water testing kit is a must-have item in fish farming. Water testing kits are used to measure important parameters in aquaculture. Some testing methods use reagents and colour discs to make a visual determination of the parameter concentration. Other testing methods use reagents and titration procedures to measure parameter concentration. Water quality parameters such as; Dissolved oxygen, temperature level and pH are monitored and kept at acceptable ranges to achieve the best results in fish farming.

Source of water

Adequate water supply is essential for the success of a fish farm and lack of it may result in disaster because water needs to be changed at regular interval. Naturally available sources of water such as borehole and river water are the most suitable. However, rainwater and water from a chemically treated source like tap water are not recommended for fish farming.

Water Tank

This is to serve as a water reservoir from which water is supplied to the ponds. The water tank is connected to the fish ponds through a plumbing system to make it convenient for water to flow into the ponds when needed.

Fingerlings

 The life cycle of a fish starts with an egg. The egg hatches into what is called a yolk sac. The larva stage begins when the fish has absorbed the yolk and starts feeding for itself. The fry is the development stage of fish immediately after the larva stage. When the fish gets bigger and looks very much like an adult, it is considered a fingerling.

The fingerling is the development stage of fish following the fry stage and continuing into the first three to four months of life. There is also the yearling which is the development stage of fish following the fingerling stage and lasting until approximately one year of age. The development stage of a fish after fingerling is what we refer to as juvenile. The best practice if one is starting a fish farming business is to buy either fingerlings or juveniles as this will save you from the headaches of mortality. There are fish farmers that specialize in hatching fingerlings and selling juveniles. It is important to get your fingerlings and juveniles from reputable fish hatcheries.  Once the fish matures and can reproduce and lay eggs, it becomes an adult.

Fish Feeds

An important part of the commercial fish farming business is feeding. Farmers should ensure they provide fishes with high quality and nutritious feeds. High quality feeds not only ensures maximum production, but it also helps to keep the fish healthy. Fish feeds occur in the form of granules or pellets. They provide the nutrition to fishes in a stable and concentrated form, enabling the fish to feed efficiently and grow to their full potential.  Fish feeds are combined with other ingredients like vegetable proteins, cereal grains, vitamins and minerals and formed into feed pellets.

There are different types of fish feeds available to fish farmers namely:

  • Natural Fish Feed: This is found naturally in the pond. This include; detritus, bacteria, plankton, worms, insects, snails, aquatic plants and fish (yes, fish eat fish if they`re hungry). Natural fish feeds are naturally in the pond. They may include bacteria, plankton, worms, insects, snails, aquatic plants, molluscs and smaller fishes. Variety of natural fish feeds are found in water bodies. Their presence depends on the productivity of the water body.

The demand for natural food varies from species to species and between the age group of fishes. Natural fish feeds have high protein and fat content, which promote the growth of fishes.

  • Supplementary Fish Feed: This usually includes cheap materials locally available such as terrestrial plants, maize, bone powder, kitchen wastes or agricultural by-products.
  • Complete Fish Feed: Complete fish feeds are made from a mixture of carefully selected ingredients to provide all the nutrients necessary for the fish to grow well. They are made by experts who understand the perfect formula for the fish at a different stage.

Harvesting

After a while, the fishes become suitable for harvesting. Harvesting of fishes depends on the fish species. Harvesting is done when a sizeable number of fish reach the marketing age. Harvesting of fish id done by the aid of nets or by draining water from the pond. Harvesting should be done when in the morning or late afternoon when the temperature is low.

Harvested fishes can be sold as:

Fresh fishes

Dried fishes

Smoked

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Understanding the export market

Should you consider exporting harvested fishes, you need to ensure that you understand your target market(s).

This involves researching your export destination(s). 

Good market research isn’t all about assembling facts and figures, it should focus on what drives the target market(s) and how to get the best out of it.

 Tips to Understand the market

  • Gather basic market information, from import regulations to trade statistics. You can make use of available Market Analysis tools.
  • Narrow the focus of your research to your product or service to make it more specific.
  • Research competitor markets. (Find out what they are doing right and how they are doing it)
  • Attend market-specific seminars
  • Seek practical advice from experienced exporters
  • Develop direct contacts with potential buyers. (You can make use of several online directories)
  • Understand the market environment. (Relevant Trade Fairs and Embassies are good sources of information)

EXPORT CONTRACT DOCUMENT

  • An export contract can be defined as an agreement between a seller and a buyer on the terms of export business.
  • The export contract document spells out the obligations of both the buyer and the seller.
  • This document is issued by the exporter and the importer.

QUALITY ASSURANCE DOCUMENTS

  • Quality assurance documents are documents that help to ensure exported goods conform to safety measures (as stated by agreed terms of the contract and international conventions). Using international recognized bodies is very important.
  • Relevant quality assurance documents include:
  • A phytosanitary certificate for agricultural, animal and plant commodities issued by Nigeria Agricultural Quarantine Service (NAQS).
  • Health certificate for processed and semi-processed food items issued by the National Agency for Food and Drug Administration and Control (NAFDAC)

Funding options

There are numerous funding options available to help you finance your export business:

  • Government export incentives
  • factoring
  • loans (commercial banks/family and friends)
  • support from financial institutions

Factoring

Factoring might be an attractive way to help your cash flow. Factoring is a financial transaction where the receivables (such as the invoice) is given to a third party, called a factor for a fee.

Loans

Other ways of funding include loans from friends and family, commercial banks. To access bank loans, one would have to write a bankable proposal.

When writing a bankable proposal take into account the following steps:

  • Familiarize yourself with the responsibilities of each financial organization
  • Prepare funding request based on their priorities
  • Get a copy of their template and use it to develop your proposal
  • Formally submit your proposal

Financial institutions

Financial institutions offer a lot of funding options and are therefore a very important source of export financing. Find the main institutions for financial support below.

NIGERIAN EXPORT IMPORT BANK

The Nigerian Export Import (NEXIM) bank offers a wide range of funding options for your export business.

Some of which are:

  • Direct Lending Facility (DLF)
  • Export Credit Insurance Facility
  • Stocking Facility (for manufacturing exporters)
  • ECOWAS Interstate Road Transit Scheme
  • Foreign Input Facility (for manufacturing exporters)
  • Local Input Facility

Below is an abridged version of a fish farm business plan

As consultants, we have years of experience in the industry and we are vast in management and are ever ready to keep supporting your business. We shall ensure that management personnel is always available for your enquiries.

Executive Summary

Fish farming is a lucrative business. Anyone with a small space who can find a market within a locality can engage in fish farming. This business plan discusses how you can set up a fish farming business.

Our business plan on fish farming will begin with the production of catfish while tilapia shall be added as time goes on. Targeted customers shall be the open market, restaurants, hotels, and grocery stores.

Over time due to expansion, we shall commence exporting the harvested fishes when the local market is satisfied.

On a small scale, the fish farming project would take approximately ₦ 4,000,000 (Four Million Naira) to be deployed as follows: Startup Expenses and Capitalization.

General Company Description

The business will be hinged on preparing the site, acquiring mobile ponds, fertilizing the ponds, buying fingerlings for the ponds, feeding the fingerlings till maturity at 6 months and then sell off as either fresh fish or as dried fish. Having sold off, we stock again and repeat the process of brood and sale.

Mission Statement

To create employment opportunities for others, provide protein to the populace and help save some foreign exchange for Nigeria.

Company Goals and Objectives 

The company aims to be a successful company that is a leader in customer service and that has a loyal customer following. Our objective will be to have our fish from our farm being consumed by every household in Nigeria.

Target Customer 

There are no religious, cultural or demographic barriers on the consumption of fishes. Therefore, our customers shall be the open market, restaurants and grocery shops. Over time with reasonable expansion, we shall commence exporting the product when the local market is saturated.

Industry Analysis

The fish farm industry generates lots of money from fish farming through retail of fish. The growth of the fish farm industry is expected to continue to rise as more Nigerians are seeking to add fish and other seafood products to their diets for both the taste and health benefits associated with seafood.

Customer Profile

The Company intends to do business with markets, fishery coops, and fish/seafood wholesalers that will acquire the company’s inventories of fish.

Fish Farming Marketing Plan

The Fishery’s marketing operations will be minimal as once the Company solidifies an ongoing relationship with fishery coops and wholesalers, very little marketing will be required to maintain these relationships.

At the onset of operation, we intend to aggressively develop a relationship with local and regional fish sellers that will assist the fish farm in maintaining the pricing (through forward and future contacts) so that the sale of fishes will always be a stream of income.

However, in the future, we might seek to brand certain fish items that we produce. In this instance, the farm will hire a marketing/advertising firm to properly position the farm’s image and brand so that it can directly sell packaged fish to major groceries, supermarkets, farmer’s markets, and retailers.

This Fishery intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Fishery.

Marketing Objectives

We intend to develop a relationship with major groceries and fish/seafood wholesalers that will purchase bulk inventories from us.

Pricing

Pricing shall be as follows

Age in months PRICE (N)
Table Size 6 1500 per kg
Brood Stock 8 and above 3000 per kg

The prices of our fish shall be average prices and compete on quality and service.

Credit policy shall be on a cash and carry basis.

Economics

As stated in the executive summary, the fish farm is intended to bosom into a multi-fish producing farm that will spawn, grow, and distribute its fish to seafood wholesalers throughout the target market.

Facts of the industry

The size of the market is a huge one as almost everybody eats fish.

Change in government regulations would favour the business because there will be a ban on imported fish.

Features and Benefits

In operating a fish farm, the business will be contributing to the reduction of unemployment by employing as much as will be profitable to us.

Our after-sale services will include delivery, service contracts, support for processing, follow-up on startup fish farms, and refund policy.

Customers

The customer base shall cut across all religions, ages, gender, location, social class, educational level and occupation.

For business customers, we have open market, restaurants and grocery shops

Competition

Most fish farmers depend on imported fish feed. However, due to its cost, the farm intends to formulate its feed which will be nutritive enough but cheaper, translating into higher profits even if the farm sells cheaper.

Niche

The unique corner of the market is just to start producing table size fish for resellers, restaurants etc.

Sales Strategy

Sales strategy shall be through phone call and personal contacts to inform people of our readiness to sell at maturity and average prices.

Promotion

Advertising: phone calls, short text messages, posters and handbills.

The farm will use pursue other methods such as dealer incentives, word of mouth and network of friends and professionals.

Distribution Channels

The distribution channel shall be through retail for families, wholesale for resellers, agents and independent representatives who might want some commission are also welcome.

Sales Forecast

Except for a 10% mortality rate, which is provided for in any animal husbandry outfit, 95% of fishes are expected to be sold.

Operational Plan

Daily operation of the business will be feeding the fishes on the farm. Changing of water and monitoring water parameters as at when due.

Production

The ponds are washed, fertilized and stocked with fingerlings, feeding continues until maturity is achieved.

Aerated water constantly flows through the pond to achieve an artificial stream. Depending on the age and size of the fish, quantity of feed, measured in kg, is used in the feeding.

Customers are placed on notice when the fish will mature.

Daily feed consumption is noted to ensure that the farm has enough feed to last for  1 month before restocking.

Our consultants are always ready to assist with our product development and general support.

Legal Environment

The farm shall be registered with CAC (Corporate Affairs Commission) in affiliation with NASSI (Nigerian Association of Small Scale Industrialists) and AFAN (All Farmers Association of Nigeria).

Personnel

The number of employees shall be 2 for a start, the type of labour shall be skilled, and professional input shall be on consultation. Over time, the farm shall evolve a schedule and written procedures and job descriptions for employees. For certain functions, contract workers will be used in addition to employees.

Inventory

Major inventory in this business is fish and the feed, with some fuel to pump water. The farm shall also keep feed raw materials since it intends to formulate and prepare its feed. We are looking at inventory investment of ₦ 600,000.00 (Six Hundred Thousand Naira only). The lead-time for orders is 1 month.

Credit Policies

The farm does not plan to sell on credit because it is not customary in this industry and clients would neither be expecting it.

Professional and Advisory Support

Board of directors:

Attorney:

Accountant:

Insurance agent:

Banker:

Consultants:  

Mentors and key advisors:

Financial Plan

The financial plan consists of a 12-month cash-flow projection and a break-even calculation. Together they constitute a reasonable estimate of the company’s financial future. 12-Month Profit and Loss Projection

Business Plan Projected Cash Flow

The profit projection is the heart of our business plan, cash flow is the blood that the heart pumps.

 

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Do you need a fish farming business plan? Reach out to MATOG CONSULTING, we are experts in writing business plans alongside a detailed and comprehensive financial model.

Call 08023200801 or email enquiry@matogconsulting.com

You can also fill the contact form and we will get in touch with you 

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