Catching Dory: A Feasibility Study in the Establishment of Business

Carlos Manuel S. Abalos, Randy Joy M. Ventayen, Ma. Jasmine J. de Guzman, Karen Lea A. Estira

Abstract: Pangasius farming is an emerging industry in the Philippines. It has just been introduced in the
country in 1985. Originating in the Mekong River Delta, there are two species used primarily in pangasius
culture namely pangasius hypophthalmus and pangasius bacourti. 95% of the pangasius farmed have been
the species hypophthalmus, At the present, the Philippines relies on exports of the said fish from Vietnam
to meet the growing demand. The proponents explored the possibility of establishing a pangasius farm using
the hypophthalmus species in the municipality of Binmaley, Pangasinan with the trade name of Catching
Dory The feasibility study was conducted by evaluating the following criteria: market feasibility, technical
feasibility, financial feasibility, and SWOT analysis. Market feasibility involved survey questionnaire
fielded among consignacions in Magsaysay Fish Market in Dagupan City. It is found out that there is a
daily demand for pangasius among consignacions of 468.87 metric tons. Major assumptions were made in
addition to observations, expert interviews and benchmarking to determine the technical feasibility of the
proposed business. The total maximum production capacity of the business is at 72.026 tons per production
cycle assuming an 85% survival rate, stocking density of 5 fingerlings/m3, and a production cycle of 6
months on a fishpond with a total area of 11,298 m2 and depth of 1.5 meters. A 5-year projected financial
statement was made to determine financial feasibility. It is found out that the initial investment of
PhP4,502,068.20 can be returned after 2 years, 10 months, and 12 days or five production cycles. Based on
the results of the study, the business is feasible and the proponents recommend to start the operations.
 Profile Categories Frequency Percentage
0-10 2 7.14%
11-20 20 71.43%
Years of Operation
21-30 4 14.29%
31+ 1 3.57%
Monday 28 100.00%
Tuesday 28 100.00%
Wednesday 28 100.00%
Business Days Thursday 28 100.00%
Friday 28 100.00%
Saturday 28 100.00%
Sunday 27 96.43%
Wholesalers 27 96.43%
Restaurants 26 92.86%
Retailers 25 89.29%
Household Consumers 23 82.14%
Customers Traders/Viajeros 18 64.29%
Hotels 17 60.71%
Exporter 17 60.71%
Processing Plant 13 46.43%
Caterers 8 28.57%
Bangus 27 96.43%
Tilapia 25 89.29%
Prawn 24 85.71%
Crab 22 78.57%
Malaga 20 71.43%
White Shrimp 20 71.43%
Seafoods Consigned Catfish 16 57.14%
Samaral/Pingaw 14 50.00%
Mud Crab 12 42.86%
Oyster 8 28.57%
Pangasius 4 14.29%
Mussel 4 14.29%
Lapu-lapu 3 10.71%
 Profile Categories Frequency Percentage
Willingness to consign Yes 24 85.71%
pangasius No 4 14.29%
Willingness to transact Yes 24 100.00%
with new supplier No 0 0.00%
1-100 5 20.83%
Number of banyeras to 101-200 12 50.00%
consign 201-300 4 16.67%
301+ 2 8.33%

Amount
Willing to Projected
Frequency of
Year Pop. MarketAcceptability Times be bought Demand(in
Harvest
(in metric metric Tons)
tons)
2020 30 0.8571 2 51.426 9.11739 468.87
2021 30 0.8571 2 51.426 9.11739 468.87
2022 30 0.8571 2 51.426 9.11739 468.87
2023 30 0.8571 2 51.426 9.11739 468.87
2024 30 0.8571 2 51.426 9.11739 468.87

Particulars Amount
Cash on Hand PHP 150,000.00
Building PHP 160,348.00
Biological Asset PHP 211,840.00
Inventory - Feeds PHP 3,431,808.00
Indirect Expense PHP 70,222.20
Salaries Expense - Care Taker PHP 159,300.00
Salaries Expense - Harvesters and Farm Consultant PHP 34,000.00
Salaries Expense - Accountant PHP 20,000.00
Employee Benefits PHP 41,190.00
Office Supplies PHP 1,010.00
Fish Farm Supplies PHP 40,900.00
Fixed Asset- Perimeter Fence PHP 83,800.00
Machinery and Equipment PHP 10,500.00
Service Vehicle PHP 40,000.00
Miscellaneous Expense PHP 3,000.00
Utilities Expense PHP 32,400.00
Advertising Expense PHP 10,000.00
Permits and Licenses PHP 1,750.00
TOTAL PHP 4,502,068.20
 Projected
Pond Stocking Maximum Projected
Depth Survival Frequency Supply
Year Area Density Production Harvest
(in m) Rate of Harvest (in metric
(in m2) (pcs/m3) Capacity Yield
tons)
2020 11,298 1.5 5 84,736 85% 72,026 1 72.026
2021 11,298 1.5 5 84,736 85% 72,026 2 144.052
2022 11,298 1.5 5 84,736 85% 72,026 2 144.052
2023 11,298 1.5 5 84,736 85% 72,026 2 144.052
2024 11,298 1.5 5 84,736 85% 72,026 2 144.052

Parameter Measurement
pH 7.7
Dissolved Oxygen 6 mg/L
June: 25-33oC
Temperature
December: 22-31oC
Salinity 2 ppt
Water Depth 1.5 m
Stocking Density 5 fingerlings/ cubic meter
Feed Conversion Ratio 1.5
Survival Rate 85%
65 during harvest on off peak season
Selling Price
70 during harvest on peak season
Weight of one fish at
1 kg
harvest
Harvest Month June and December
 2020 2021 2022 2023 2024
Assets
Current Assets
Cash 5,191,792.00 7,135,135.41 9,078,478.82 10,904,847.23 12,848,190.63
Fish Farm Supplies 30,675.00 30,675.00 30,675.00 30,675.00 30,675.00
Total Current Assets 5,222,467.00 7,165,810.41 9,109,153.82 10,935,522.23 12,878,865.63
Non-current Assets
Building 160,348.00 160,348.00 160,348.00 160,348.00 160,348.00
AD - Building (16,034.80) (32,069.60) (48,104.40) (64,139.20) (80,174.00)
Perimeter Fence 83,800.00 83,800.00 - 83,800.00 83,800.00
AD - Perimeter Fence (27,933.33) (55,866.67) - (27,933.33) (55,866.67)
Machinery and Equipment 10,500.00 10,500.00 8,000.00 10,500.00 10,500.00
AD - Machinery and Equipment (2,433.33) (4,866.67) (4,800.00) (7,233.33) (9,666.67)
Service Vehicle 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00
AD - Service Vehicle (4,000.00) (8,000.00) (12,000.00) (16,000.00) (20,000.00)
Total Non-current Assets 244,246.53 193,845.07 143,443.60 179,342.13 128,940.67
Total Assets 5,466,713.53 7,359,655.48 9,252,597.42 11,114,864.36 13,007,806.30

Liabilities and Equity - - - - -

Accounts Payable - - - - -
Total Liabilities - - - - -
Abalos, Capital 5,466,713.53 7,359,655.48 9,252,597.42 11,114,864.36 13,007,806.30
Total Equity 5,466,713.53 7,359,655.48 9,252,597.42 11,114,864.36 13,007,806.30
Total Liablities and Equity 5,466,713.53 7,359,655.48 9,252,597.42 11,114,864.36 13,007,806.30
 2020 2021 2022 2023 2024
Operating Activities
Net Income 964,645.34 1,892,941.94 1,892,941.94 1,862,266.94 1,892,941.94
Purchase of Supplies (41,910.00) (1,010.00) (1,010.00) (31,685.00) (1,010.00)
Depreciation 50,401.47 50,401.47 50,401.47 50,401.47 50,401.47
Adjustment for Supplies 11,235.00 1,010.00 1,010.00 31,685.00 1,010.00
Accounts Receivable - - - - -
Cash Flow from OpAc 984,371.80 1,943,343.41 1,943,343.41 1,912,668.41 1,943,343.41

Investing Activities
Construction of Building 160,348.00 - - - -
Construction of Perimeter Fence 83,800.00 - - 83,800.00 -
Acq. of Machinery & Equipment 10,500.00 - - 2,500.00 -
Acq of Service Vehicle 40,000.00 - - - -
Cashflow from InAc (294,648.00) - - (86,300.00) -

Financing Activities
CapitalContribution 4,502,068.20 - - - -
Cashflow from FiAc 4,502,068.20 - - - -

Net Increase (Decrease) in Cash 5,191,792.00 1,943,343.41 1,943,343.41 1,826,368.41 1,943,343.41

Cash, Beginning Balance - 5,191,792.00 7,135,135.41 9,078,478.82 10,904,847.23
Cash, Ending Balance 5,191,792.00 7,135,135.41 9,078,478.82 10,904,847.23 12,848,190.63

2020 2021 2022 2023 2024

Sales 5,041,792.00 9,723,456.00 9,723,456.00 9,723,456.00 9,723,456.00

Cost of Goods Sold (3,907,170.20) (7,672,512.59) (7,672,512.59) (7,672,512.59) (7,672,512.59)
Gross Profit 1,134,621.80 2,050,943.41 2,050,943.41 2,050,943.41 2,050,943.41
Operating Expense
Depreciation Expense (50,401.47) (50,401.47) (50,401.47) (50,401.47) (50,401.47)
Office Supplies Expense (1,010.00) (1,010.00) (1,010.00) (1,010.00) (1,010.00)
Salaries Expense (20,000.00) (20,000.00) (20,000.00) (20,000.00) (20,000.00)
Employee Benefits (41,190.00) (41,190.00) (41,190.00) (41,190.00) (41,190.00)
Miscellaneous Expense (3,000.00) (3,000.00) (3,000.00) (3,000.00) (3,000.00)
Advertising Expense (10,000.00) (10,000.00) (10,000.00) (10,000.00) (10,000.00)
Fish Farm Supplies Expense (10,225.00) - - (30,675.00) -
Utilities Expense (32,400.00) (32,400.00) (32,400.00) (32,400.00) (32,400.00)
Permits and Licenses (1,750.00) - - - -
Net Income (Loss) 964,645.34 1,892,941.94 1,892,941.94 1,862,266.94 1,892,941.94
 2020 2021 2022 2023 2024

Return on Investment 0.18 0.26 0.20 0.17 0.15

Gross Profit Margin 0.23 0.21 0.21 0.21 0.21
Net Profit Margin 0.19 0.19 0.19 0.19 0.19
Total Asset Turnover 1.01 1.52 1.17 0.95 0.81
Benefit Cost Ratio 1.29 1.27 1.27 1.27 1.27
Gross Ratio 0.77 0.79 0.79 0.79 0.79

 Reliable and cost-effective distribution  Difficulty in penetrating other market

channels segments
 Strategically priced product  Intensive water quality monitoring and
 Adherence to quality parameters and treatment entails higher costs
realistic assumptions  Difficulty in expanding production
 Availability of resources ensures reliable  Lack of transportation vehicle for
and reasonably priced supplies harvested pangasius
 Strategic location`  Initial lack of technological competency
 Financial ratios  Lack of R&D facility
 Long range planning
 Ability to raise short-term capital
STRENGTHS WEAKNESSES
 Strong demand  Bargaining power of consignacions
 Lack of competitors in the province  Lack of support from BFAR for pangasius
 Proximity of pangasius hatchery culture in the region
 Binmaley famed for aquaculture  Natural disasters
 Government push for pangasius  Theft and other unscrupulous acts
production  Pangasius exports from Vietnam
 Tax incentives
OPPORTUNITIES THREATS