Profitability of Catfish Farming in Nigeria
June 28, 2018, 2:55 pm
Are you thinking of going into catfish farming? I’m sure you’ve heard a lot about the potentials of catfish farming in Nigeria, and how it is capable of making you millions of Naira. Well, as someone who has a first-hand experience in catfish farming in Nigeria, I want to analyze the profitability of catfish farming in Nigeria because catfish farming is one of the most common agribusiness ventures in Nigeria and in Africa.
If you want to go into the catfish farming, you need to be aware of its costs and profit potential so that you can make the necessary preparation. I’ll be using four parameters to analyze the profitability of catfish farming in Nigeria. These parameters are:
- Startup capital
- Operation & Maintenance (O&M)
In order to do a fair and thorough analysis, I’ll be analyzing the profitability of catfish farming in Nigeria from the standpoint of someone who’s trying to start a catfish farming business with 500 catfishes.
I’ll be making an assumption that you already have land whether on lease or full ownernship. I won’t be factoring in the cost of getting a land.
Catfish Farming in Nigeria startup costs:
500 fingerlings: N10,000
Wooden (VAT) tank construction and labour: N150,000
4-months’ worth of feeding: N150,000
Total startup capital for 500 fishes: N310, 000
OPERATION & MAINTENANCE (O&M)
Catfish farming doesn’t require a very high level of O&M. However, the success of catfishes growth depends on the cleanliness of their water tanks and the quality of their feeds. To keep their tanks clean, you’ll need to have a good drainage system that flushes out their dirty water and replaces it with clean water. This water disposal system is always factored into the construction of their tanks, like the image below shows.
Their feeds need to be of the highest quality. You can either opt for already packaged feeds or you can choose to manufacture or produce your own feeds. Packaged fish feeds like Coppens, Durante etc. are more expensive compared to producing your own feed.
To produce your own feed, you need a very good fish feed formula to guide you in sourcing ingredients and determining the ration of how these ingredients will be combined. Most catfish farmers guard their feed formula jealously and won’t reveal it to just anyone. Catfishes don’t need a veterinary doctor to check up on them regularly. But if you don’t maintain them well, you can have a disease outbreak. You’ll also need a farm labour to help you with O&M if you won’t be available to run the catfish farm full-time.
There’s a very good market for catfishes too. There’s a very high demand for catfishes all year round. The demand is highest from football viewing centers, restaurants and market women who buy in bulk and sell in retail either as live catfishes or smoked catfish. Individuals also demand for catfishes too for personal consumption. With catfishes you’ll never have any problem selling your products.
I’ll exclude the O&M costs from these calculations because the variables can’t be accurately forecasted generally, they are specific to each person’s situation.
Assuming they are well raised and you have a very low death rate or mortality rate (about 5%, which means of the starting 500 fishes, 25 die along the way), you can expect each of your 475 surviving fishes to grow to a minimum of 1kg each, giving you a total weight of 475 kg. The current market price for 1kg of fish is N800 so you can generate sales of N380, 000 (475 X N800).
With an invested capital of N310, 000 and sales of N380, 000, your gross profit margin is 22.58%. Catfish farming doesn’t have a good cash flow. You won’t be able to sell every day or every week. You have to spend a minimum of 4 months raising the fishes before they reach market size of 1kg each.
You can boost your profitability in catfish farming by smoking them and selling them to individuals or supermarkets. You can also export your smoked catfishes to countries like Canada, America, Australia etc. This form of catfish commands a higher price in the market but you’ll have to spend money either hiring someone to smoke them for you or buying the smoking equipment and doing it yourself.
Most of the structure you put in place for catfish farming are fixed assets in nature and their costs would be recovered over several productions.
Going by these four parameters that I’ve used to analyze the profitability of catfish farming in Nigeria, catfish farming in Nigeria has an overall rating of A, meaning that it is a profitable business. Catfish farming in Nigeria is a good venture to go into.
The trick in catfish farming is to know the techniques and practices that will reduce mortality or death rate and boost growth and production. The analysis above is not 'cast in stone' or fixed. It's meant to give you a general overview of cost implications and profitability. You can decide to do away with some items in order to reduce cost and boost profitablity. For example, in catfish farming, you can decide to smoke and package your fishes for export, sales to supermarkets and shops instead of selling to market women.
I hope this analysis helps you to make the decision to start your catfish farming business. There are other things you need to put in place before starting a catfish farming business in Nigeria but the ones highlighted above are the basics. If you need a professional and comprehensive business plan to guide you and help you raise money to start and grow your catfish farming business, you can get one from us. Our catfish farming business plan will show you all the materials you need to get, what you should feed your fishes with, profits, balance sheet and cash flow for 5 years of operation and so much more! Please see a screenshot of our catfish farming business plan below:
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