A Model Bankable Scheme for Setting Up of Export Oriented Fish Breeding Units

A Model Bankable Scheme for Setting Up of Export Oriented Ornamental Fish Breeding Units

The Marine Products Export Development Authority (Ministry of Commerce and Industry, Government of India)

MPEDA House, Panampilly Avenue Kochi – 682 036 India.

Tel: +91-484-2311979 Fax: +91- 484 - 2313361/ 2314467 Email: [email protected]

Website: http://www.mpeda.com

CONTENTS

S. No. Title Page

1. Introduction 1

2. Ornamental fish trade 2

3. Technology 3

4. The scheme for promoting export oriented ornamental fish production

4

5. Potential 5

6. Ornamental fish breeding unit 6

7. Breeding and culture of ornamental fishes 7

8. Salient aspects for successful production of ornamental fish

10

9. Water quality parameters 10

10. Profile of entrepreneur 11

11. Details of costs 11

12. Income estimated 12

13. Viability of the project 13

14. Lending norms 14

Annexure-1: Details of MPEDA Financial Assistance Scheme

Annexure-2: Viability Analysis

1. Introduction Keeping colourful and fancy fishes, popularly known as ornamental fishes, aquarium fishes, or live jewels is one of the oldest and most popular hobbies of the world. The hobby of keeping fish in aquarium has become the second most popular hobby after photography in the developed countries such as USA. With the increase in demand for ornamental fishes especially in USA, Europe and Japan, many countries in Asia have started capturing and culturing beautifully coloured ornamental fishes. The FAO estimates that nearly 60% of the international trade in ornamental fish originates from developing countries mainly from Asia. More and more fishes have been domesticated and popularised for business purposes. Not only the attractiveness and colour, but also the rarity is important in an export market. The top exporting country is Singapore followed by Hong Kong, Malaysia, Thailand, Philippines, Sri Lanka, Taiwan, Indonesia and India. The largest importer of ornamental fish is USA followed by Europe and Japan. China and South Africa are the emerging markets of ornamental fish trade. The wholesale value of the global ornamental fish trade is estimated to be US $ 1 Billion while the retail value is US $ 6 Billion. The entire industry, including accessories and fish feed, is estimated to be worth more than US $14 Billion. More than 2,500 species are traded globally and some 30-35 species of fresh water fish dominate in the international market. The Indian ornamental fish sector is a small but vibrant segment, with potential for tremendous growth and large-scale gainful employment generation. At present the ornamental fish export from India is dominated by the wild caught species, which cater to a small portion of the global market. India’s contribution to global ornamental fish trade is negligible. The country is bestowed with climatic conditions ideally conducive for growth, maturation and breeding of many exotic as well as indigenous ornamental fishes. Our rich and diverse agro-ecosystem is gifted with 164153 km of rivers and canals, 1.9 million ha reservoirs, 2.0 million ha tanks and ponds, 1.5 million ha beels and oxbow lakes and 1.4 million ha brackish waters. Table 2. Evolution of Export Value (In 1000 US $) of Top 10 Exporting Countries (Adapted From FAO, 2006.)

In 2004

2000 2001 2002 2003 2004

Ranking Contribution (%)

Singapore 43502 41581 41460 41427 49528 1 19.8 Czech Republic 10273 11272 13353 16183 19540 2 7.8 Japan 8458 7693 8332 12395 18495 3 7.4 Malaysia 8219 10583 17559 14147 18361 4 7.3 Indonesia 12841 13722 12648 13372 13389 6 5.3

2

Israel 5399 5540 5603 8525 10790 7 4.3 Thailand 2446 3370 5245 7392 9864 8 3.9 USA 8289 7045 8381 8561 8664 9 3.5 Sri Lanka 7714 5944 5527 6459 7385 10 2.9 Philippines 6737 6497 6439 6729 7346 11 2.9 Colombia 3162 3636 4284 4599 7272 12 2.9 Hong Kong 14774 5213 4785 4871 4686 14 1.9 China 2155 2019 2166 3025 3279 19 1.3 Peru 4753 9776 6439 3102 2967 20 1.2 Brazil 3235 3226 3250 2379 2664 21 1.1 Taiwan 1584 1713 1844 2073 2235 22 0.9 India 824 1285 1363 2369 1360 26 0.008 Total exports 174,638 175,102 183,032 211,195 250,749 100.0

1 Total exports include Spain which is probably misreporting, In 2004, Spain reported exports of US$ 18 million.

In spite of these advantages Indian ornamental fish sector is yet to be tapped for its potential. Development of the sector requires strategies involving sustainable exploitation of the existing natural resources and breeding of native and exotic varieties under controlled conditions. Presently the industry is not organised and the earning potential of the sector is not being exploited in a technology driven manner in harmony with nature. 2. Ornamental fish trade 2.1. International trade The steady increase in both exports and imports of international ornamental fish trade since the mid 80’s was followed by a decline during 1998 to 2001(Figure-1). The decline during 90’s was reversed since the millennium. In 2000, the imported value of ornamental fish was valued at around US $ 245 million and has increased at an average of 2.5% per year in last decade (Figure-1). Assuming an annual increase of 3 and 5 % global ornamental fish import value is expected to cross US$ 285 and 313 million respectively. Although reported exports were significantly lower, annual increase is notably higher. Major importers contributing to global import trade of ornamental fishes from Asian region are EU (UK, Germany, France, Netherlands, Belgium and Italy),

0.00

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150.00

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350.00

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

Va

lue

( U

S$

mil

lio

n )

Total imports Total exports

Figure-1: Global trends in ornamental fish imports and reports. Source: adapted from FAO, 2006.

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USA and Japan. Asia (Singapore, Malaysia, Indonesia, Thailand, Sri Lanka, Philippines, Hong Kong and China) leads as the largest global exporter of ornamental fishes with a contribution of 55 %. 2.2. Domestic trade The domestic market for ornamental fish is evolving at a fast rate. The major markets are metropolitan cities, larger cities and small town in all the states of India including North East India. The marketing chain comprises breeder, whole salers and retailers. 2.3. Export trade related regulations and issues In recent years, the ornamental industry, especially in Europe is being increasingly regulated and influenced by public perceptions of the hobby. Regulations impacting on the importation of ornamental fish and trade mainly relate to fish health, animal welfare, transport phyto-sanitation of aquatic plants, and sustainable resource management Fish health is one of the key regulations governing the trade through the recently updated Aquaculture Health Directive of EU. This Directive refers to the animal health status and certification requirements for imports of tropical and cold-water fish for ornamental purpose. This EU directive implements to the OIE (Office International des Epizooties) guidelines and requires compliance by all EU members and their trading partners, including third countries. The above Directive is also linked to the new transport regulations on the protection of live animals during transport and related operations. This Directive requires EU and third countries to comply with strict rules governing treatment, handling, welfare and health status of animals including fish to be transported The imports of genetically modified organisms into the EU are also regulated by European Directive, governing the release and marketing of Genetically Modified Organisms (GMOs) in the European Union. Import of GMOs is currently banned in EU and Singapore but trading is allowed in countries such the USA and China. The green/ eco trend is coming up in other leading importers such as US. 3. Technology At present in India, hundreds of exotic and indigenous ornamental fish varieties are being bred under captive condition. Majority of the production goes to domestic market and any quality standards for production are yet to be implemented. The effort to develop breeding technology for some of the high value indigenous species such as Puntius denisonii is underway. The following is a generalised production cycle of ornamental fishes:-

4

The breeding cycle given above is suitable for majority of the live bearers and egg layers. But this may not be the case with some high value species like Arowana, Discuss, which normally takes more than a year to reach the commercial size. 4. The scheme for promoting export oriented ornamental fish

production Ornamental fish breeding is an attractive activity, which requires skill and attention. Business potentials are enormous considering the large number of species involved, the ever-growing global trade and domestic demand. The real opportunity lies in its value addition through selective breeding and genetic manipulations resulting in development of new attractive colour strains and ornamental characters.

2 weeks

2 weeks

1st

month

3-4 weeks 2nd month

45-60 days

3rd & 4th months

7-15 days

4th month

Maturation

Breeding

Larval rearing

Grow- out

Conditioning

Sales

5

Government of India has identified ornamental fish sector as one of the thrust areas for generating employment opportunities and augmenting our foreign exchange earnings. Govt. of India has sanctioned a scheme for the development of export oriented ornamental fish industry in India. As per the MPEDA scheme the beneficiaries will be selected after comprehensive evaluation. The beneficiaries will be given a financial assistance up to 7.5 lakhs (50% of investment) on completing the construction of farm as per the guidelines of the Scheme. For the effective implementation the beneficiaries will be graded in to 3 categories based on the level of investment and details of the grading is as follows - Grade-1 units are micro scale units set up in a cluster comprising a minimum of 10 units. The maximum assistance per unit in the cluster of 10 will be Rs. 75000/- or 50 % of the capital cost which ever is less. Grade-2 units are small-scale ornamental fish breeding units, which can be set up as individual units. The maximum assistance will be Rs. 2 lakhs or 50 % of the capital cost which ever is less. Grde-3 units are larger individual multi-species ornamental fish breeding units breeding high value ornamental fishes. The maximum assistance will be Rs. 7.5 lakhs or 50 % of the capital cost which ever is less. The selected beneficiaries will be trained on various aspects of ornamental fish breeding and successful completion of training will be one of the criteria for providing the financial assistance. Ornamental Fish Marketing Societies: Apart from the breeding units, in order to develop effective marketing of ornamental fishes produced, financial assistance will be provided to set up Ornamental Fish Marketing Societies (OFMS) by breeders / entrepreneurs and will be registered as per the guidelines prescribed by MPEDA. OFMS can avail maximum financial assistance of Rs. 5 lakhs subject to conditions. The details of items/heads eligible for financial assistance are given in Annexure-1. 5. Potential Assuming the Global market for ornamental fish to grow at the rate of 6% per annum, the demand is likely to reach US $ 7.0 Billion in a period of 5 years. India is presently a marginal player in the Global trade, but it is possible to raise our share to the level of 10% in the next 15 years.

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6. Ornamental fish breeding unit 6.1. Site selection Site should be located in a flood free area having of continuous supply of good quality water. The water source can be dug or tube wells, ponds and rivers having required water quality parameters. Accessibility by road, rail and air is a prime requisite for transportation of broodstock/ other raw materials as well as to move the produce (live fish) to domestic/ international markets. Apart from these, uninterrupted power supply is essential for water pumping, aeration, lighting/ other machineries. A thorough survey of the site as well as strong considerations on the engineering aspects are inevitable for the larger volume water holding structures as well as building. 6.2. Setting up of Ornamental fish breeding units General outline of an ornamental fish breeding unit consists of components such as (a) maturation/ brood stock development, (b) breeding cum hatching, (c) larval rearing and (d) grow-out sub-sections. All these sections will have provisions for continuous supply of unpolluted water and air. Apart from these associated sub-sections such as live feed production section, water-quality testing laboratory cum chemical store, disease treatment cum quarantine section, packaging cum sales section and feed preparation cum storage section are associated to the breeding units. Species such as guppies, mollies, sword tails, angelfishes etc. can be matured, bred and grown up in glass aquaria and small cement tanks, where as goldfishes, barbs and many of the cichlids require a minimum water volume of 1000 liters and requires larger cement tanks. Earthen ponds of larger capacities are also used for grow out purpose. Apart from cement tanks, breeding and grow out of catfishes and carp varieties, require earthen ponds having a minimum water volume of 10 to 20 m3. Earthen ponds lined with plastic sheets are commonly used as breeding/ holding tanks for ornamental fishes. But the possibility of getting holes and strength loss associated with sunlight exposure are some of the problems associated with lined ponds. Generally one species is stocked in one tank/ pond but a number of compatible species can be stocked in one tank/ pond. The number of tanks/ ponds/ aquaria required depends on the variety of species bred. However a total tank/pond/aquaria capacity of 30,000 litres is considered sufficient for a small-scale model.

7

7. Breeding and culture of ornamental fishes The fishes reproduce by fertilization of eggs from which young ones emerge. The critical aspects of breeding are-

• Maturity and condition of fish • Environmental condition • Fertilisation rate and hatchability of eggs • Larval and post larval feeding and rearing

The method of breeding is based on the family characteristics of the fish. Depending on the species, fishes are classified as live-bearers, where they give birth to young ones where as egg layers release eggs outside the body and where it get fertilized and develop. Fishes such as guppies, mollies, platys and sword tails are the common live bearers and produce only few numbers of offsprings in comparison to egg layers though their breeding is relatively easy. Hundreds of varieties of live-bearers are traded in the market, the popular among them being Guppy, Black molly, Platy and Sword tail. Among egg layers, fishes such as goldfish stick their eggs to some substratum, where as tiger barbs are egg scaterers. Many of the African cichlids are egg layers and do parental care by mouth brooding of fertilized eggs. Cichlids such as Betas produce floating bubble nests on to which the eggs are fertilized eggs attached. Brooders are selected from standing crop or are purchased and reared. The fecundity of the live-bearers range from few to even 300 babies, where as most of the egg layers will produce 500-1000 eggs per spawning. A beginner should start by breeding live-bearers followed by easy to breed egg layers such as goldfish, angel fish etc. Guppy is the simplest to start with since it tolerates greater variation in water quality and accepts all types of foods. Among egg layers the popular ones are Gold fish, Barbs, Bettas, Tetras, Angelfish and Gourami. A sound knowledge on the biology, feeding behaviour and the requirement of ambient conditions of the fish are prerequisites for undertaking breeding and culture. 7.1. Induced breeding As in the case of food fishes ornamental fishes also can be induced to breed using hormones such HCG, LH-RH, SG-100 etc. to induce ovulation and release of eggs. Groups of fish can be spawned together in circular tanks, where a circular flow pattern is developed. Eggs are collected from the overflow with a fine-meshed net. An optional method is to hand-strip eggs and sperm from the fish, using the dry method.

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7.2. Larval rearing

The new borne larvae of livebearers are transferred to larger glass aquaria/ cement tanks with aged water. In the case of egg-layers such as gold fish and koi carp, the fertilized eggs can be hatched in aquaria/ hatching tanks with adequate aeration and water exchange. Temperature is the most critical factor affecting the egg development and hatching as well as for the growth and metamorphosis of the larvae. Generally, at 28-30 °C, the eggs will hatch in about 24 -48 hours time. Similarly in mouth brooding cichlids the mouth of parent fish is examined for hatched out fry, and the fry are further transferred to larval rearing tanks.

Many larvae in the egg layers group are extremely small at hatching, and survival rate is often very low in the first days of their lives. The situation can be improved by providing adequate quantities of live foods (rotifers and daphnia).

7.3. Grow out Brooder fishes collected from wild or sourced from farmers is bred in captivity and the young ones produced are reared for a period of 3 to 4 months to reach the marketable size. It is assumed that 3 production cycles can be taken in a year for many of the live bearers and egg layers. 7.4. Feeding The maturation of ornamental fishes requires feeding with high quality diet ensuring adequate supply of nutrients for sexual maturation and production of superior quality young ones with higher survival. Generally fresh feeds of animal origin (fish and shrimp meat) or live feeds (blood-worms, polycahaets, chironomid larvae etc.) are fed to brood fishes. The larval fishes are mainly fed with live feeds such as daphnia, infusoria, rotifer, and artemia nauplii where as juvenile fishes are fed with boiled egg yolk, tubifex worms etc. Daphnia is collected from ponds during early morning hours and fed to the fish in the morning. Daphnia is an ideal feed for larval and juvenile fishes. Dried block of Tubifex worms is available in market can be used for juveniles, and preferred for its ease of storage, handling and acceptance. Feeding is generally done twice a day - morning and evening, for post-juveniles and adults. The larvae are fed ad-libitum by assuring adequate quantity of live feed in the rearing water. The juvenile fishes also feed on mosquito larvae. In addition to the natural feeds, supplementary feed consisting of oil cake, rice bran and fishmeal prepared in the farm shall also be used as per requirement. Production of fish feed, brood stock diet and larval diet needs special attention. Formulated feeds imported as well as locally produced for shrimps/ carps are also fed to the fishes.

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7.5. Culling The fishes from the grow-out are periodically culled for the desired characteristics and graded for the size. During this process, the stunted, diseased and weak fishes are discarded. The grading will help assuring size uniformity of saleable fishes. 7.6. Marketing Marketable size fishes are sold to traders or their agents who repack them and sent to markets either national or international. The marketing channel for the domestic trade is given below. Fishes from far of places will reach Kolkota, Chennai and Mumbai by air or even by rail, which will be further exported, to EU, USA and Japan. Ornamental fishes are live animals and needs utmost care during handling and packaging to avoid mortality. Similarly fishes needs to be conditioned prior to transportation to trade destinations from the breeders’ point, to eliminate transportation associated stress, disease and death. As per the IATA (International Air Transport Association) regulations, ornamental fishes comes under the category of “Perishable Commodity” and therefore transportation associated storage for longer period is limited. To avoid the issues stated above, strong market linkages between buyers and sellers as well as domestic and international markets are essential. In order to strengthen India’s position in international ornamental fish trade, MPEDA envisages various strategies to enhance country’s capabilities in terms of technology and infrastructure and to develop export demand based production for major importers in EU, USA and Japan. Further the thrust will be given on quality improvement in terms of disease free/ healthy and developing superior genetic strains. 7.7. Pricing From the prevailing price patterns of ornamental fishes, it is possible to attract an average general price tag of Rs. 5 per fish produced. However for the bankability purpose a conservative price tag of Rs. 2.5 to 3 has been taken (Annexure-1).

Breeders Middle men/ Wholesalers

Retailers

Exporters

10

8. Salient aspects for successful production of ornamental fish

1. Suitable training for the entrepreneur or any other person associated with the project and facilities for consultation of an expert.

2. Selection of suitable species based on water quality of the area. All live-bearers generally prefer hard water- alkaline. Egg layers like Goldfish, Gourami, Danios, catfishes, Rosy barbs, Fighters etc can tolerate a wide range of water conditions. Species like Angel, Discus, Tetras, Oscar, Loaches etc prefers soft- acidic water.

3. Bio-filtration unit is a pre-requisite for smooth functioning of a unit. 4. The brood stock selected for breeding should be of superior quality so

that good quality fish seed could be produced. Brood stock needs to be replenished every two years. Fresh stock from a different source may be added in every two years to the selected parent stocks to improve breeding efficiency and production of healthy offspring.

5. The fish breeder should concentrate on few species so that it helps them to develop expertise on the particular species and good variety of fishes can be produced as per market demand.

6. In addition to exotic varieties, if an entrepreneur can breed indigenous varieties; it can fetch good price in the International market.

7. The unit should be set up in an area having reliable supply of water and electricity. It shall be ideal to set up the units near streams, since it can receive plenty of non- polluted water and the rearing unit can be made flow- through.

8. Availability of agro- based byproducts will facilitate preparation of pelletised diet for the fish. A mini pelletiser can be installed for this purpose.

9. All new incoming fishes should be quarantined from resident stock. Movement of fishes should be restricted from a suspected or unknown disease status area.

10. A few quarantine tanks should be constructed little away from the unit so that a proper observation can be made on health aspects. If any abnormal behaviour is observed in any of the culture tanks, the fishes should be isolated immediately.

11. The entrepreneur should always ensure to keep in touch with recent developments in the field and attend training and exposure visits.

12. The breeders should develop market relations with pet/ retail shops, potential farmers, vendors dealing with ornamental fish, marketing networks etc to facilitate the process of selling/ procuring new brood stocks.

9. Water quality parameters The degree of hardness of water has several biological effects on aquatic life. Hard water containing bicarbonates tend to prevent a solution from changing in acidity. Soft water lacking this protection may become acidic when carbon

11

dioxide is present, and this change causes stress on the organisms. But in the case of soft water species and sensitive naked cells like egg and milt, excess hardness causes problems in absorbing substances through its delicate membranes. Hence soft water has been found to play a vital role in successful reproduction of many species of ornamental fishes and for purpose of fish breeding a soft solution is desirable. To maintain soft water, all sources of calcium carbonate such as calcareous rocks, gravels, corals, broken shell and algae must be kept out of the aquarium system. Some of the important water quality parameters and their optimum ranges for aquarium fish are given below.

Temperature 24 to 28 degrees C pH 7.0 to 8.5 Carbon di oxide <10 ppm Alkalinity 75 to 120 ppm as CaCO3 Hardness 60 to 100 ppm as CaCO3 Dissolved Oxygen 6.0 to 8.0 ppm Free Ammonia < 0.05 ppm Ionized Ammonia < 0.4 ppm

10. Profile of entrepreneur The project is being implemented by Shri. _____________________________who has _____ years of experience in culture of food fishes. The entrepreneur has ______ acres of own land in which there is pond area of _____ acres. The ponds are presently being used for culture of food fishes. Encouraged by the returns derived from culture of food fishes and the experience gained, Shri. _______________________has decided to take up breeding of ornamental fish in his existing ponds. Shri. ____________________ shall be employing a person who has knowledge of breeding ornamental fish and has undergone adequate training on breeding technology. The entrepreneur will start with easy to breed fishes like livebearers and egg layers. Once sufficient experience is gained and a suitable market is established with wholesalers/ exporters, breeding of more price and most sought after varieties will be taken up. 11. Details of costs

11.1. Capital Costs No Item Quantity Rate (Rs) Amount (Rs)

1 Cost of shed sq ft 400 Annexure-2

12

2 Cement cisterns litres 2

3 Netting for top surface of tanks

LS "

4 Hand nets

5 Glass tanks 5.5

6 Electrical fittings and generator

LS

7 Motor and water pump LS "

8 Life saving equipments LS

9 Air pump, tubings and fittings LS

10 Water supply facilities LS "

11 Water filtration system (Biological filter)

LS "

TOTAL 11.2. Recurring Costs (in Rs., Per Year) No. Item Grade-1 Grade-2 Grade-3

1. Purchase of broodstock 10000 25000 60000

2. Feed cost 7500 36500 54500

3. Management costs 30000 90000 150000

4. Packing and transport 5000 10000 25000

5. Power charges 7500 15000 40000

6. Miscellaneous exp (chemicals, medicines)

5000 10000 25000

7. TOTAL 65000 186500 354500 12. Income estimated 12.1. Production per cycle (3 months)

No. of broodstock

Breeding unit

? ?

Young ones produced per ? brooder

Total young ones produced

No. Surviving after 2 months (@ 50%)

Live bearers (guppies, molly, platy and sword tail)

Grade-1 1300 325 10 13000 6500

Grade-2 3640 910 10 36400 18200

Grade-3 10733 2683 10 107328 53644

13

Egg layers (goldfish, bw ~ 75 g)

Grade1- 10 20 2000 13000 6500

Grade-2 27 54 2000 36400 18200

Grade-3 80 160 2000 107288 53644 12.2. Benefits Average

Production per cycle

Average No. of cycles/ year

Average Production per year

Average Rate (Rs per piece)

Average Income per year

Grade-1 6500 9 58500 2.50 146250

Grade-2 18200 9 163800 2.50 409500

Grade-3 53664 9 482976 2.50 1207440

13. Viability of the project The cash flow analysis presented in Annexure-1is based on general assumptions and various items of cost and benefit are market related. Recurring costs have been assumed to be escalating by 10% every fourth year. Generally the production of young ones shows a gradual increase over the years as the breeder gains experience in breeding technology. The price of young ones also increases as the markets develops and stabilises. Considering these factors, the annual income from sale of young ones has been assumed to be increasing by a modest 10% every fourth year. As can be seen in the annexure, the project generates benefits from the first year itself although the net benefit for first year shows negative figures since it is assumed that only one production cycle is obtained during first year. The production is expected to stabilise from second year onwards and yield the full benefits. The viability analysis of the project gives the following results.

NET PRESENT WORTH (NPW)

BENEFIT COST RATIO (BCR)

INTERNAL RATE OF RETURN (% IRR)

Grade-1 92611 1.29 53

Grade-2 210813 1.22 44

Grade-3 833110 1.32 45

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14. Lending norms 14.1. Unit Cost (in Rs., at unit sale price of Rs. 2.50)

Capital Total production for 5 yrs. (No. of fish)

Total interest for 5 yrs

Total recurring cost for 5 yrs

Unit cost

Grade-1 150000 256608 57488 292500 1.94 Grade-2 448000 720720 171281 861750 2.05 Grade-3 1766000 2125094 612911 1617750 1.88

14.2. Bank loan and margin money Out of the total financial outlay, up to 25 percent shall be contributed by the entrepreneur as margin money and the balance can be financed by banks. Any subsidy available from MPEDA or other agencies shall be reckoned against margin money. 14.3. Interest Rate and Security Interest rate on bank loan and security for the loan will be as per RBI guidelines issued from time to time. 14.4. Repayment period of loan and grace period The project generates sufficient income from second year onwards to cover the debt-servicing burden and leaves reasonable net surplus to the entrepreneur, and hence can be taken up as a primary source of income for the borrower. Net income during the first year will be negative since all fixed costs are incurred during the beginning of project and income is generated out of only one operating cycle. Hence grace period of one year may be allowed during which payment of principal and interest is not required. The repayment period of the loan has been fixed at 5 years.

ANNEXURE-1

FACILITIES ELIGIBLE FOR FINANCIAL ASSISTANCE AND MAXIMUM RATES ADMISSIBLE FOR EACH FACILITY TO SET UP ORNAMENTAL FISH MARKETING SOCIETY (OFMS)

No Essential items

Description Maximum rate

admissible

Amount of financial assistance

1 Cement Tanks Cement tanks including reservoirs and overhead water tanks.

Rs.2 per liter water holding

50% of estimated cost subject to a maximum of Rs. 30,000/-

2 Glass Tanks Minimum water holding capacity 10,000 liters

Rs. 5.5 per liter water holding capacity


3 Water Supply items

Motor & Pump, Water line pipes, hose and its fittings


4 Electrical Items

Wiring Materials, Lightings and its fixtures, Power generator, Submersible electrical heaters


5 Water Treatment Equipments

Biological filters, Carbon filters, UV units, Ozoniser, RO units


6 Building for housing the tanks

Only structure with cemented, brick walls, asbestos/metal/ RCC roofs for covering the aquariums and cement tanks excluding the overhead tanks are eligible.

Rs. 400 per square feet.


7 Life saving Equipments

Oxygen Cylinder, Regulator, Aerator, Compressor/Air blowers, Shade nets and Netting for tanks, Hand Nets and packing machine and Microscope.


8 Initial start up grant

Grant-in-aid for the purchase of ornamental fish.

50% of estimated cost subject to a maximum of Rs. 100,000

Total Not Exceeding Rs.5,00,000/-

FACILITIES ELIGIBLE FOR FINANCIAL ASSISTANCE IN EACH GRADE OF BREEDING UNITS

Sl.No.

Essential Items

Description Rate Grade-I Maximum Subsidy amount

(Rupees)

Grade-II Maximum

subsidy amount

(Rupees)

Grade-III Maximum

subsidy amount

(Rupees) 1 Cement

Tanks Cement tanks including reservoir and overhead tank.

Rs.2 per liter water holding

30,000 50,000 90,000

2 Glass Tanks Glass tanks include the aquarium stand as well.

Rs. 5.5 per liter water holding capacity

11,000 41,250 1,81,500

3 Water Supply items

Motor & Pump, Water line pipes, hose and its fittings

5,000 5,000 20,000

4 Electrical Items

Wiring Materials, Lightings and its fixtures, Power generator, Submersible electrical heaters

10,000 37,500 1,00,000

5 Water Treatment Equipments

Biological filters, Carbon filters, UV units, Ozoniser, RO units

5,000 37,500 1,00,000

6 Building for housing the tanks

Only structure with cemented, brick walls, asbestos/metal/ RCC roofs for covering the aquariums and cement tanks excluding the overhead tanks are eligible.

Rs. 400 per

square feet

2,00,000

7 Life saving Equipments

Oxygen Cylinder, Regulator, Aerator, Compressor/Air blowers, Shade nets and Netting for tanks, Hand Nets, packing machine and Microscope.

15,000 30,000 75,000

Total 76,000 2,01,250 7,66,500

Maximum eligible assistance as per scheme 75,000 2,00,000 7,50,000

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5Capital cost (Rs.) 150000Recurring cost 32500 65000 65000 65000 65000Total cost 182500 65000 65000 65000 65000No of fish / yr 23328 58320 58320 58320 58320Price rate (Rs.) 2.5 2.5 2.5 2.5 2.5Income 58320 145800 145800 145800 145800

Net income -124180 80800 80800 80800 80800

Disc rate 0.15PWC 320,064PWB 412,675NPW 92,611 141023.1891BCR 1.29 1.423762278IRR 53% 0.65868042

Loan amount 136875Total repayment 194363

Repayment scheduleYear 1 2 3 4 5Principal 0 34219 34219 34219 34219Principal o/s 136875 136875 102656 68438 34219Interest @12% 16425 16425 12319 8213 4106Repayment 16425 50644 46538 42431 38325

BANKABILITYYr 1 Yr 2 Yr 3 Yr 4 Yr 5

Gross income 58320 145800 145800 145800 145800less recurring cost 32500 65000 65000 65000 65000Gross surplus 25820 80800 80800 80800 80800Repayment 16425 50644 46538 42431 38325Net surplus 9395 30156 34263 38369 42475DSCR 1.57 1.60 1.74 1.90 2.11Av DSCR 1.78

Annexure-2: Viability Analysis

SMALLSCALE ORNAMENTAL FISH BREEDING UNIT

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5Capital cost ( Rs.) 448000Recurring cost 95750 191500 191500 191500 191500Total cost 543750 191500 191500 191500 191500No of fish / yr 65520 163800 163800 163800 163800Price rate (Rs.) 2.5 2.5 2.5 2.5 2.5Income 163800 409500 409500 409500 409500

Net income -379950 218000 218000 218000 218000

Disc rate 0.15PWC 948,242PWB 1,159,055NPW 210,813BCR 1.22IRR 44%

Loan amount 407813Loan repayment 579094




MEDIUM SCALE ORNAMENTAL FISH BREEDING UNIT

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5Capital cost 1766000Recurring cost 179750 359500 359500 359500 359500Total cost 1945750 359500 359500 359500 359500No of fish / yr 193190 482976 482976 482976 482976Price rate (Rs.) 2.5 2.5 2.5 2.5 2.5Income 482976 1207440 1207440 1207440 1207440

Net income -1462774 847940 847940 847940 847940

Disc rate 0.15PWC 2,584,448PWB 3,417,557NPW 833,110BCR 1.32IRR 45%

Loan amount 1459313Loan repayment 2072224




LARGE SCALE ORNAMENTAL FISH BREEDING UNIT

A Model Bankable Scheme for Setting Up of Export Oriented Fish Breeding Units

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Transcript of A Model Bankable Scheme for Setting Up of Export Oriented Fish Breeding Units