Hi All,

I would like to setup a small business to rear Tilapia. I have done some research and am interested to use tank culture to rear them on land. Using some sort of a self improvised RAS system. i would like to seek your advice on this venture and what are the things that I need to take note of. At the same time, I would like to know the current market price for the fish. Appreciate all your advise

Razkyo:

Disease, feeding and costs, the biology of the fish, market movements.

Although tilapia are inherently tolerant to diseases, there are still some diseases that can be an issue, such as vibrio infection. Diseases are associated with aquaculture practices, such as water quality and sanitation, worker sanitation, cross-contamination controls etc.

Feeding and costs is just that: what to feed, how much to feed, and how to balance the costs of feeding with how much to feed. Not all feed is the same, I'm sure you know. Some results in better feed conversion, possibly due to feed additives such as enzymes that pre-break down the food for better absorption, or there might be other additives such as prebiotics or probiotics, which enhances overall growth and development. Good knowledge of feed material can often make or break an aquaculture venture. Eg. 5kg of standard feed would cost about RM25-RM30, and for every 1kg tilapia target weight, you need at least 1.3-1.5kg of feed. So for 4000kg of fish, you will need to fork out RM26,000 to feed the fish. If you average it out, you'd find that it amounts to RM6.50 cost per kg fish. And what's the price you're going to sell at? RM8? RM10? How about other fixed costs, like water and electricity?

Fish biology. Seriously, this is critical. If you don't know the fish, don't try to keep it. If you don't have much experience about it, go for training courses. There are a dime a dozen out there, and one will find them if serious enough. Why is this important? Some examples: (i) Unlike most other fish, female catfish actually grows faster and bigger than males. If you didn't know this, you'd probably keep male catfish instead, as the general understanding about most organisms is that males grow bigger and faster than females. (ii) Tilapias will begin breeding when they are about 8cm in size, especially if the population density isn't high enough. Often, their growth rate drastically slows down once they start breeding. That's part of the reason why many culturist prefer monosex tilapias. (iii) Keeping tilapias in ponds will damage your pond, especially if the density is not high enough to discourage breeding instincts. Why? Male tilapias, when mature/large enough will start to build "bower" nests at the bottom of the pond. This erodes the pond, making the pond shallow over time.

So you can see, why understanding the biology of the species is critical for success.

Market movements is a no brainer. Knowing where the market demand is will help you get better prices, and gain better market access.

It will also help to do a very thorough planning of your business, as RAS systems are overall more costly to install AND operate. Eg. 1 kilowatt hour of electricity is RM0.43 (commercial). Not alot right? But considering that the common RAS equipment uses 2.2kwh of electricity, 24 hours a day, for 210 days = RM4767.84 per unit. And that's just for water circulation and waste removal, not equipment cost. How many fish can that unit culture? 4000kg? 5000kg?

At present, the price of tilapia wholesale for grade B is RM8/kg, grade A is RM10 and above. Live fish can fetch around RM13-RM15 per kg.

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Added on April 26, 2012, 1:17 pmJust a small addition to the above. Not to sound condescending, but I'm sure you know that RAS systems are not economical when done small scale. The last I checked, the minimum equilibrium capacity for tilapia is about 96,000kg of fish. If cost of production is roughly 70%-80% of the selling price of the fish, you can see that it will be costing hundreds of thousands of dollars just to run the system each cycle.

This post has been edited by Michael J.: Apr 26 2012, 01:18 PM

Dear Michael J.,

Thanks for the valuable input. So would you suggest to rear them in ponds instead of tanks? As for training courses, I am currently looking out for suitable courses to attend.

Interestingly, I am also looking at the pallets that they are feeding on as I know that it will affect the quality and overall cost of the fish. However, there are not much information with regards to the pallets that are being sold in Malaysia. Do you happen to know about the pallets that are generally used in Malaysia for farming Tilapia?

Razkyo:

This is a dilemma, actually. Tilapia cultured in ponds are cheaper to produce, but has less long term sustainability and market access. The latter is only relevant if you want to enter US or EU markets.

Personally, I would prefer to culture them in tanks. There is more control on the quality aspect, especially when it comes to disease control, sizing/grading, harvesting etc. It is also easier to plan your production so you are consistently producing crop month after month.

However, tank culture can only be economical if one has large enough capital. If capital is an issue, then pond culture is the next best thing.

On training courses, you can try Sepang Today Aquaculture (STAC). Their courses are a little bit more technical, but it is quite thorough. Otherwise, you can check up Marble Goby Enterprise also.

For tilapia pellets, you can approach Asia Aquaculture or Star Mills (both under CP Group). Other feeds, I would suggest you do your own coating and feed additive blending. For this, you might like to talk to our forumer, Para, about these materials. His company carries a product that apparently has been shown to improve feed conversion rates. Do note that most aquaculture feeds in Malaysia are imported, either from China or elsewhere, and consists mainly of soy bean meal, ash, and lesser amounts of fish meals and fish oils. Generally, the crude protein content for tilapia should be around 35%. Higher protein contents may be beneficial, but it will be a lot more costlier.

@Michael J. & Razkyo
is RAS system just aquaculture or aquaponics ?

RAS Aquaponic

maybe you can follow the system in above link.

Kissan:

The system of recirculating water is very established, and used in culture practices ranging from hydroponics, to fertigation, and aquaculture. It is even used in industrial processes. Aquaponics is merely a hybrid of hydroponics and aquaculture. The cost is still about the same, no real difference. Just difference in crop out put and productivity.

Honestly, RAS (recirculating aquaculture system) is just a fancy name given to what's essentially an expanded version of the common aquarium filteration system. The principles are the same, just the application is made bigger.

the IDEAL situation to rear fishes are in tanks rather than pond culture as per what MichaelJ. said advantages. and also weather control.

rearing fish is usually about CONTROL : access control, disease control, size control, harvesting control & Quality Control...haha

you can also apply to DOF for courses depending on your location

This post has been edited by ParaOpticaL: Apr 26 2012, 05:38 PM

Dear Michael J.,

Many thanks for the information. I have linked up with Marble Goby Enterprise to do a cost evaluation of setting up a small time tank culture tilapia farming. Just awaiting some results.

The reason why my partner and I are doing it on a small scale is because this is a new industry that we are venturing into and we do not know anything about rearing fishes. All we did was to read up on the various methods and essential points to rear fishes. We are also very worried about the marketing of the fishes in the local market if we produce such large quantity. Since we do not have much contacts locally, we feel that it would be wise to start it up small to test the market.

We are also looking at value adding by processing the fishes but our general idea is to start it up first to do a sample of the market size before deciding which plan should we adopt to move the business forward.

After researching on the various methods, I agree that tank culture if done on a large scale will really be more value for money. However, as I mentioned above, I am just afraid that our contacts locally are not sufficient enough to take in large loads.

Razkyo:

It is good that you are approaching this more conservatively. Yes, marketing is a key component in any business. Certain fish species have higher demand than supply, and literally "fly" off the shelves.

At this moment, species such as tilapia are experiencing growth in culture by about 10%-20% each year in most regions, except Oceania. In Southeast Asia, the growth rate is closer to 40%. In terms of demand, cumulative demand is growing at about 20%-30% each year, especially for processed fish products. From this, it is easy to draw the conclusion that demand is outpacing supply.

Personally, my analysis of the situation is opposite to the gungho sentiment harboured by most. I believe that tilapia culture will have good running for another 5-10 years before reaching a plateau. Thereafter, there could be sharp price readjustments, maybe even price wars between different producing countries. This is certainly evident with what happened to pangasius catfish, and African catfish (keli). In addition, I have concern about Malaysia's lackadaisical attitude towards gaining EU and US certification for our fish products.

For me, my thoughts are like this: There are literally hundreds of white fish species in the world; you never know which species will be the next "tilapia" or "pangasius". With the tremendous success some Western countries are having with hybrid bass and other marine white fish, it is very possible that these species could overshadow Asian white fish species in the near future. The only aquaculture species I can have very good confidence, even to the extent of it having "guaranteed" market, is prawns/shrimp. There aren't too many species of prawns/shrimp that can be cultured easily. In fact, 80% of farmed shrimp are from two species: P. vannamei (white) and P. monodon (tiger). Smaller cultures consists of P. japonica (Kuruma), P. stylirostris (Western Blue), P. chinensis (Chinese White), P. indicus (Indian White), and P. merguiensis (Banana). Do note that all these latter species are cultured in very small quantities, due to past diseases wiping out entire populations and farms, or due to limited/restricted growing zones.

Also, from a pure capitalist POV, the price of shrimp/prawns are consistently high, and even moving higher. This is simply because shrimp/prawns are sensitive to disease pressures, and very few other species of prawns are really worth culturing. If disease knocks out one population, there won't be another to replace it quickly, thereby "guaranteeing" demand in the marketplace. If I'm in possession of a technology that helps me ward off disease pressure on aquatic species, then my first target species would be shrimp, not fish.

This post has been edited by Michael J.: Apr 27 2012, 03:33 PM

Dear Michael J.,

I totally agree with your analysis that prawn is a guaranteed market. I have done my research on prawns as well. My first idea was to farm prawns instead of fishes. Personally, there are a number of factors currently restricting the farming of prawns successfully.

Firstly, prawns (correct me if I am mistaken) uses pond culture to grow out and it most definitly is unsuitable for tank culture. Thus we are unable to CONTROL like what ParaOpticaL has mentioned.

Secondly, prawns are very susceptible to disease and very sensitive to the environment. They are easily wiped out if any of the two conditions deteriorate. Thus losing all your investments.

Lastly, the high amount of capital needed to begin the venture for someone who does not have much industry knowledge or expertise does really put you off from trying it out.

Razkyo:

Yes, you are right on most parts. The conventional way is to raise prawns through pond culture. However, the Texas A&M University has pioneered prawn raceway culture in a staggared tier form. The technology is called Super Intensive Raceway Shrimp. This may be the way forwards in the near future.

Yes, prawns are susceptible to diseases. That's why there are Specific Pathogen Free prawn larvae for culture. This type of material alone gives the culturist a 50% lead. SPF materials are already available in Malaysia, just need to find them. In addition to this, there are existing technologies which uses negatively-charged salt ions in water as bacteriacidal/viricidal agents to keep diseases in check. This technology is currently being brought in into Malaysia, and a demo farm is currently being constructed as we speak. Can't divulge much, as it is one of the "High Impact" projects the government wants to use for "advertising" purposes. But in short, there are currently technologies being developed to "help" with addressing the lack of real control in open cultures such as pond cultures.

Yes, aquaculture in general is capital intensive. It is not restricted to one type over the other. In fact, if we really wanted to compare, the capital outlay for pond culture is lower than RAS.

Eg. 1 hectare river side land could cost about RM100,000; plus your land work, overheads etc. the total cost of set up is about RM300,000. For RAS system, a single RAS unit with two large tanks for production of roughly 8,000kg of fish will cost close to RM100,000; plus overheads, cement work, shading etc., that could add up an extra RM30,000 per unit.

Furthermore, for shrimp pond culture, it is possible to attain 17.5mt of crop per hectare/year. At prices of RM17 (retail) per kg, that's equivalent to RM297,500 per hectare per year. Ok lar, that figure may be for very good farms; the average farm in Vietnam produces about 11mt per hectare, or RM187,000 worth of crop. For the same one RAS unit above, your returns are RM72,000 for 8,000kg of fish. Fine, if you could build about 40-50 units on 1 hectare, and get revenues of RM2.88 million, but your capital input is also likewise increased (i.e. RM130k x 40).

This post has been edited by Michael J.: Apr 27 2012, 05:40 PM

Dear Michael J,

Thanks for the valuable insight. It really will be nice to see the new technology that have been brought in to Malaysia. One more reason that I did not consider prawn farming is also due to the limited lands available or suitable for a large scale project. As you might know RAS system can easily be deployed on land. I have just concluded a deal to rent a piece of land for my business. As such, to convert it into a pond might not be feasible for me as I would need to literally dig up most part of the land which my landlord would not be agreeable to. Therefore there lies my only option which is through RAS. Well, instead of saying that it is RAS system. I would consider it as canvas culture which is somewhat unique to Malaysia. I came to understand that a lot of farmers in Malaysia are using canvas instead of tanks to save cost on materials. I am liaising with Marble Goby Enterprise regarding the use of this technology for farming Tilapia and apparently they informed me that it is quite feasible.

Would like to ask for your opinion on using canvas to farm tilapia?

Was looking into Tilapia sometime back, my trial did not kick off due to time and labor constrain. We did "threw" in some fo the Tilapia fries into our watering pond. Maybe we can do a harvest later part of the year.

Keeping track on this discussion. Razkyo please keep us update on your progress. Maybe we can arrange for a farm visit one day.

One thing about canvas culture is mobility. If it's done on a frame system, it can be moved. Good option if it's a rented property. As for cost wise had not done a thorough comparison as for cement/concrete or even light weight concrete may be cheaper, as this also depends on local availability .

Canvas system also has their problem with Durability of the canvas used.

but if the cost if low it might be worth to try.

Razkyo : where is your pond or farm ?


MrFarmer : when you get back from Sabah....do make time to come over to my farm. let's share some ideas

Dear ParaOpticaL,

Apologies for the late response as I was busy. The land that I rented is in Pahang near Pekan. I am liaising with Marble Goby to design the layout of the farm as well as the piping and other logistics. I agree that the worrying issue is the durability of the canvas. According to the consultant, we will have to change the canvas every two years. At one point I was considering to purchase the fiber glass tanks but the cost of one fiber glass tank is too much.

Razkyo:

Marble Goby has a good track record in their production and marketing, something not every "consultant" has on hand. You'd do well to have them on board as advisors.

As for canvas culture, for the short to medium term, it is still alright, especially since you're renting the land. I had the impression you had no need to rent any land. Nonetheless, if you are in this for the long haul, you might want to consider a more permanent solution.

I agree with you; fibreglass tanks cost a bomb. But they do last a lot more longer than canvas, and they can be made to withstand greater pressures (i.e. large amounts of water, and thus, culture of more fish).

Hi Razkyo,

to start you could use the canvas first to test out the system. once you reach breakeven or projected profitability then you can try to use fiber glass as you are more assured of the operations and everything

agreed with MichaelJ., that fiber glass last much longer and more durable thus the higher cost. Good Thing No Cheap, Cheap Thing No Good...haha

Next trip home is on 11th June. See you then. Staying for 9 days. Yes, would like to visit your farm. The more we discuss, the more idea shall crop up.

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Added on April 30, 2012, 7:22 pmFully agree here, to bee on the conservative side, keep initial expenses to the minimum (unless you have a big fat account/unlimited support). As mostly, there shall be lots of unforeseen problems/ expenses. Michael also has a point on the durability. As most probably you wouldn't be doing all ponds in one go, maybe a half/half. That is start with the lower cost in phase 1.

As for consultant, go for those with good track record. ConSultant, break in up = CON you first, then INSULT you

Razkyo
Where is your targeted market? East coast I guess you shall be competing with sea fishes. West coast I guess rather far. Have to think about logistic, transporting your harvest. I think there is most probably some mortality loss during transporting?

This post has been edited by MrFarmer: Apr 30 2012, 07:22 PM

Bro,

we can go to our farm either on 15th or 16th May 2012. so let's meet up on that day

i will be away from 17th - 19th May....

Sorry Para, can not, still in Sabah for May, only back to KL on 11th June