The Business Case
I wish to start fish storage and supply unit at Trivandrum, the capital city of Kerala, India. This “A Business Proposal for Setting up a Fish Cold Storage and Supply Unit” project aims at buying fish direct from the sea shore markets and stores it in the freezing unit. After collecting orders from the hotels, the stored fish will be delivered to them. So hotels in Trivandrum district will be the market for my product. This project aims at:
- Setting up a freezing unit
- Buying fish from the local sea shore markets and store it in the freezing unity
- Collecting orders from hotels and
- Delivering fish to the hotels
Before going into the details of the project I think it is important to give a brief sketch of the Kerala fisheries sector and the food habits of the Keralites.
Kerala is a coastal state in India with a coastal line of 590kms. Fisheries forms one of the major areas of Kerala economy. It is estimated that Kerala produces about 600,000 tonnes of marine fishes every year. The fish products of Kerala are so famous all over the world and are exported to Europe and America along with other parts of the world. The fisheries sector in Kerala contributes to almost 3% of the Kerala economy. 220,000 people are engaged in fishing as their major occupation in Kerala.
Fish is an important dish in the daily food of the Keralites. Hence while going for the lunch outs, they prefer those hotels that have fish menu. As a result most of the hotels in Kerala have special fish dishes. At present the hotels buy fish direct from the markets at higher price.
Currently the market looks very promising. That is because:
Fish is the most important food item in all the hotels in Kerala.
- It is easier to buy fish directly from the fishermen as Trivandrum district is a sea side area.
- Fishermen sell their catches directly at the sea shore in auction mostly at lower price, which is later taken to the distant markets by the fish vendors selling for higher prices.
- There is a huge fishing harbour (Vizhinjam) and two fish landing centres in the area wherefrom I can easily buy fish.
- There are no such units working at present. Of course there are freezing units but they are not focusing on the hotels. Instead they are aimed at either exporting or looking at far away markets. Hence there will be less competition.
- Hotels in Trivandrum buy fish for their daily use from markets where they pay higher prices.
- I can deliver fish to the hotels at a comparatively lower price by avoiding the middle men. Thus the hotels can save their time and money.
In order to materialise this project I should get a capital requirement of £835400 in the first year of the project, £1223400 in the second year and£1614400 in the third year. This includes the cost for establishing the building, setting up the freezers, buying a delivery van and initial running costs.
It will not be a difficult task to find at least 50 hotels in the first year, 75 hotels in the second year and 100 hotels in the third year to which I can supply fish. This would come to a turnover of £ 1500000 in the first year, £2250000 in the second year and £300000 at the end of the third year which would earn a net profit of £445282, £687822, and £928352 in the respective years.