Can recirculating aquaculture system (RAS) for cultivation of tilapia can be economically justified.

Tilapia is one of the most common fish species in cultivation today in the aquaculture industry. It is estimated that the global Tilapia market reached 6.6 million ton in 2019, most of it origin in south east Asia, but large scale production also takes place in Africa and south America in fish cages and ponds.

Since the price of 1 kg of frozen tilapia can be as low as 90 Cent. (U.S.) can it make economic sense to grow Tilapia in (RAS) -Recirculating aquaculture systems?

To answer this question, we need to review the important economic parameters of the recirculating aquaculture system.


Production in proximity to the markets:

  • Reduced the shipping costs.
  • The product is control over water parameters
  • Enable faster growth
  • Improved FCR
  • Production year-round regardless to local climate

Improved biosecurity:

The chance for a bacterial contamination is less likely and taking it out of the RAS system is possible in contrary to lakes and rivers. I addition, division of the production modules of the RAS system will secure the continuation of the production for the time the infected module is being disinfected.
 

Operation and labor:

Operating the recirculating aquaculture system (RAS) system because of its nature to take relatively small area thanks to the ability to grow 100kg of fish per cubic meter and more. Operating on land rather than on the water, the ability to see the fish, automation in the different procedures such as harvest that usually takes a lot of resources, feeding and grading, requires significantly less labor than the off shore.
 

Electricity cost:

Electricity in the second highest expense of RAS operation after the fish feed. And on many occasions, it will be the thing that determine the profitability of the operation. Many countries will offer lower rates of electricity for the producing prime sector.

While electricity cost of fish cages is significantly lower, the RAS use less fuel in the production process, and it can be taken in consideration as equivalent for electricity in cage production.                                                


The local fish market preference and marketing conditions will be the second parameter for consideration, the ability to skip the distributer and reach the final client can significantly improv the company profit margin:

  • Does the market appreciate fresh product over frozen?
  • Does the market appreciate and support local production?
  • Can we deliver straight to the final costumer, private costumer in farm to table marketing strategy or to restaurant chains and hotel that are looking for fresh quality products.
  • The affinity of the clients, environmental issues and organic products.
  • Are there importation tariffs on similar imported products or similar products.

In conclusion

Growing Tilapia in RAS - Recirculation aquaculture system can be a profitable business if the location and the marketing strategy is favorable.

The production cost in the RAS while it is higher in some parameters than other systems is lower in others and can compete with the production cost of other fish cultivation methods in the developed countries.

While it is not possible to compete with the frozen product from south east Asia it shouldn’t be the objective. The marketing concentration should be on the fresh and organic products segments, using direct marketing methods that can pay for premium product.

 

Dagan has 25 years of experience as aquaculture and fishery consultants and project establishmen

We offer a complete package for entrepreneurs and existing aquaculture companies in their way to create a successful business

From the feasibility study, project design, RAS design, working staff and management training, operation management, product processing and marketing.

Tags: Aquaculture, RAS

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