Korea Maritime Institute _KMI_ was established to study and by malj

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									      Technical Proposal for

Malawi: Proposed Commercial Fish
        Farming Project




          3 November 2004




          Consulting 기관명
                                 Technical Proposal

FROM: __________________                              TO: Mr. Abdirahman Beileh
                                           (Division Manager)
회사명: __________________                    African Development Bank
회사주소: ___________________                  Country Department
         _____________________             North East and South Regions
         Republic of Korea                 Temporary Relocation Agency
                                               B.P. 323, 1002 Tunis Belvedere
                                                        Tunis, TUNISIA



Mr. _____,


Subject: Hiring of Consultancy Service for ‘Malawi: Proposed Commercial Fish
Farming Project’ Regarding Technical Proposal



We, 회사명, herewith enclose a Technical Proposal for selection of our organization as
Consultant for Malawi: Proposed Commercial Fish Farming Project.



                                         Yours faithfully,


                                  Signature:
                                  (Authorized Representative)

                                  Signature:
                                  (Authorized Representative)


                                  Full Name:
                                  Designation: __________
                                  Address: ___________________________
                                    ___________________________
                                    Republic of Korea
                                   Firm’s References

                   Relevant Services Carried Out in the Last Five Years
                            Which Best Illustrate Qualifications


회사명 was established in 1984 to study and analyze the exploitation, utilization and
preservation of the ocean and promotion of the fishing industry through the results of research
and recommendations.


Several socio-economic research institutions of maritime sector had merged to create a think-
tank for developing a national marine policy in 1997. It has been providing the necessary
support for efficient and integrated policy-making in accordance with the creation of Ministry
of Marine Affairs and Fisheries (MOMAF).


The institution is composed of three centers (Shipping-Logistics & Port Research Center,
Fisheries and Fishing Community Research Center, Marine and Fisheries Technology
Promotion Center) and four divisions (Planning & Coordination Division, Policy & Market
Analysis Division, Marine Environment & Safety Research Division, Administration Division).


The main role of the institution is supporting public and private sectors in making policy and
providing information by relevant researches. Researches focus on policy issues related to
ocean governance, environment, fisheries, shipping and port.


The Fisheries and Fishing Community Research Center, a core part of the organization, is
mandated to develop fisheries policies in production, marketing, consumption, distribution and
international trade. The Center also carries out comprehensive studies on development of
fishing community and management methods (which are) related to fishing ports.


Recent studies on the fisheries sector include “Overall Appraisals of Building Artificial Fish-
Breeding Grounds and Instituting Directions of Policies”, “A Study on Marine Ranching
Development in Tongyoung and Geonnam”, “Researches on Potential Capacity of Korean
Aquaculture fisheries and Developing Program”, “Plan for Mid and Long-Term Fishery
Science and Technology Development Toward 21st Century”, “A Study on Countermeasures
against Fishing Agreements between Korea - Japan and Korea - China”, “A study on
Comprehensive Mid and Long-Term Plan for fisheries resource Management”, “Preparation
Plan of Large Scaled Marine Aquaculture Complex at Jindo in 2001”, and etc.
                       Relevant Services Carried Out in the Last Five Years


1

Assignment Name:                                                          Country:
A Study on Marine Ranching Development in Tong-young                      Korea
Location within Country:                                                  Professional Staff Provided by
Tong-young                                                                Your Firm: 4


Name of Client:                                                           No of Staff:
Government                                                                10


Address:                                                                  No of Staff Months:
Ministry of Marine Affairs and Fisheries                                  7
Chungjeong Ro 50 Seodaemun Gu
Seoul Korea
Start Date (Month/Year):              Completion Date (Month/Year):       Approx. Value of Services (in
1/1999                                12/1999                             Current USD): 83,300 (KMI
                                                                          portion)
Name of Associated Firm(s), if any:                                       No of Months of Professional
Korea Ocean Research and Development Institute,                           Staff Provided by Associated
National Fisheries Research and Development Institute                     Firm(s): 432
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
    Jeong-Gon Ryu
    Sub-Director of Utilization and management
Narrative Description of Project:
This study focuses on developing artificial marine ranch to provide habitats for non-migratory species.
Description of Actual Services Provided by Your Staff:
Institutional analysis of utilization and management, Analysis of actual conditions of fishery management


                            Consultants’ Name: __________________
                          Relevant Services Carried Out in the Last Five Years


2

Assignment Name:                                                           Country:
Overall Appraisals of Building Artificial Fish-Breeding Grounds and Korea
Instituting Directions of Policies
Location within Country:                                                   Professional Staff Provided by
N/A                                                                        Your Firm: 7


Name of Client:                                                            No of Staff:
Government                                                                 10


Address:                                                                   No of Staff Months:
Ministry of Marine Affairs and Fisheries                                   6
Chungjeong Ro 50 Seodaemun Gu

Seoul Korea

Start Date (Month/Year):                   Completion Date (Month/Year):   Approx. Value of Services (in
7/1999                                     6/2000                          Current USD): 67,000 (KMI
                                                                           portion)
Name of Associated Firm(s), if any:                                        No of Months of Professional
Korea Ocean Research and Development Institute,                            Staff Provided by Associated
National Fisheries Research and Development Institute                      Firm(s): 18
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
    Jeong-Gon Ryu
    Director and Leader
Narrative Description of Project:
This study conducted biological, technical and socio-economical analyses of effectiveness of artificial
fish-breeding grounds, which had been intensively invested for last 30 years.
Description of Actual Services Provided by Your Staff:
Coordination of the project and analysis of socio-economic effect


                              Consultants’ Name: __________________
                       Relevant Services Carried Out in the Last Five Years


3

Assignment Name:                                                            Country:
A study on Comprehensive Mid and Long-Term Plan for Fisheries Korea
Resource Management
Location within Country:                                                    Professional Staff Provided by
N/A                                                                         Your Firm: 2


Name of Client:                                                             No of Staff:
Government                                                                  10


Address:                                                                    No of Staff Months:
Ministry of Marine Affairs and Fisheries                                    5
Chungjeong Ro 50 Seodaemun Gu
Seoul Korea
Start Date (Month/Year):                 Completion Date (Month/Year):      Approx. Value of Services (in
6/2000                                   7/2001                             Current USD): 66,000 (KMI
                                                                            portion)
Name of Associated Firm(s), if any:                                         No of Months of Professional
Pukyung National University,                                                Staff Provided by Associated
Korean society of ship inspection and technology                            Firm(s): 150
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
    Jeong-Gon Ryu, Director and Leader
    Jong-Ho Kang, Professional Staff
Narrative Description of Project:
Realizing sustainable Korean fisheries under the comprehensive systematic long-term FRM plan in
consideration of the status of fisheries resources and socio-economic conditions. Materializing responsible
fisheries through planning differentiated fisheries policies considering the coastal and offshore fisheries
characteristics and prescribing the practical ways of constructing fisheries bases.
Description of Actual Services Provided by Your Staff:
Analysis of current fisheries management practices. Review of fisheries management theories. Foundation
preparation for effective FRM. Planning a mid and long term FRM.


                            Consultants’ Name: __________________
                       Relevant Services Carried Out in the Last Five Years


4

Assignment Name:                                                           Country:
Preparation Plan of Large Scaled Marine Aquaculture Complex at Korea
Jindo in 2001
Location within Country:                                                   Professional Staff Provided by
Jindo                                                                      Your Firm: 3


Name of Client:                                                            No of Staff:
Jindo Local Government                                                     5


Address:                                                                   No of Staff Months:
Jindo Gunchung                                                             2
Jindo Gun

Gonranamdo Korea

Start Date (Month/Year):               Completion Date (Month/Year):       Approx. Value of Services (in
12/2001                                2/2002                              Current USD): 25,000 (KMI
                                                                           portion)
Name of Associated Firm(s), if any:                                        No of Months of Professional
Yosu National University                                                   Staff Provided by Associated
Gumgwang Co.                                                               Firm(s): 31
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
    Jeong-Gon Ryu, Director and Leader, Jong-Ho Kang, Professional Staff


Narrative Description of Project:
The objective of this study is to enhance local fishermen’s income by building a aquaculture complex at
Jindo. This study investigates several basic circumstances, which are necessary for the complex such as
investment environment.
Description of Actual Services Provided by Your Staff:
As key staffs they provided a major part of socio-economic analyses.


                            Consultants’ Name: __________________
                      Relevant Services Carried Out in the Last Five Years


5

Assignment Name:                                                         Country:
Researches on Potential Capacity of Korean Aquaculture fisheries Korea
and Developing Program
Location within Country:                                                 Professional Staff Provided by
N/A                                                                      Your Firm: 7


Name of Client:                                                          No of Staff:
Government                                                               26


Address:                                                                 No of Staff Months:
Ministry of Marine Affairs and Fisheries                                 15
Chungjeong Ro 50 Seodaemun Gu
Seoul Korea
Start Date (Month/Year):               Completion Date (Month/Year):     Approx. Value of Services (in
1/2002                                 10/2002                           Current USD): 283,000 (KMI
                                                                         portion)
Name of Associated Firm(s), if any:                                      No of Months of Professional
National Fisheries Research and Development Institute,                   Staff Provided by Associated
Korea Fishery Association                                                Firm: 90
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
Young-Tae Shin, Director and Leader,
Jeong-Gon Ryu, Professional staff,
Jong-Ho Kang, Professional Staff,
Sang-Min Lee, Professional Staff
Narrative Description of Project:
This study estimates and diagnoses potential ability of aquaculture industry and also suggests prospective
policies to bring it up competitive and constructive industry.
Description of Actual Services Provided by Your Staff:
Analyze the impact of market opening by various international trade conditions.
Effective way of developing market structure for the products from aquaculture.


                            Consultants’ Name: __________________
                        Relevant Services Carried Out in the Last Five Years


6

Assignment Name:                                                          Country:
A study on Annual Expansion Program of TAC Target Species                 Korea
Location within Country:                                                  Professional Staff Provided by
N/A                                                                       Your Firm: 1


Name of Client:                                                           No of Staff:
Government                                                                3


Address:                                                                  No of Staff Months:
Ministry of Marine Affairs and Fisheries                                  4
Chungjeong Ro 50 Seodaemun Gu
Seoul Korea
Start Date (Month/Year):                 Completion Date (Month/Year):    Approx. Value of Services (in
4/2002                                   12/2002                          Current USD): 41,600
Name of Associated Firm(s), if any:                                       No of Months of Professional
                                                                          Staff Provided by Associated
                                                                          Firm(s): 0
Name of Senior Staff (Project Director/Coordinator, Team Leader) involved and functions performed:
    Jeong-Gon Ryu, Director and Leader
    Jae-Hyun Ahn, Professional Staff
Narrative Description of Project:
To cut back on problems from adopting the TAC program by scrutinizing the propriety and estimates of
the TAC operated in Korea and then setting up the annual plan to operate it.
Description of Actual Services Provided by Your Staff:
Theoretical review on the TAC system. Finding actual conditions of the target species and business.
Analysis of TAC problems and inspection of TAC suitability. Selection of new target species and working
plan. Estimation of allowable biological catch and TAC on Blue Crab.


                            Consultants’ Name: __________________
Approach Paper on Methodology Proposed for Performing the Assignment
Approach Paper on Methodology Proposed for Performing the Assignment

                                    Table of Contents

  Chapter 1. Overview of Malawi’s Fisheries
     1. Introduction
     2. Fisheries
     3. Current Development
     4. Potential of Fish Farming


  Chapter 2. Market Research Study
     1. Planning
     2. Analysis Object
     3. Data Collection
     4. Data Analysis
     5. Marketing Strategy Establishment


  Chapter 3. Feasibility Study
     1. Introduction
     2. Analysis of Business Plan
     3. Analysis of Aquaculture Viability
     4. Institutional Analysis
     5. Analysis of Feasibility


  Chapter 4. Project Preparation
     1. Introduction
     2. Project Justification
     3. Project History
     4. Project Features
     5. Implementing arrangements
     6. Credit Provision
     7. Project benefits, Impacts and Risks
     8. Assurances


  References
 Chapter 1. Overview of Malawi’s Fisheries

1. Introduction

 Malawi is a subtropical country situated between latitudes 9˚ and 18˚S and longitudes 33˚ and
 36˚E in southeastern Africa, with a total surface area of 11.8 million ha, of which the land area
 is 9.4 million ha, with the rest of the country covered by water.


 Bordered by Malawi, Tanzania, and Mozambique, Lake Malawi(NYASA) covers a total area of
 22,490 square kilometers. The lakeshore people, particularly those in landlocked Malawi, rely
 on the lake for water, transport, recreation, electricity, irrigation, and most importantly fish. But
 overfishing and increased economic activity are depleting the fish stock in Lake Malawi,
 Africa’s third largest lake. Between 1988 and 1992, the commercial fish catch fell by over 20
 percent. This problem has major economic and environmental consequences for the future of
 Malawi and other countries around the lake.


 The estimated per capita income of Malawi is about US$ 160 in 2002 (The World Bank Annual
 Report 2003). This is a very low level even by the African Standard. According to the World
 Bank, 43% of smallholders do not have enough income to acquire their most basic needs, and
 30% have insufficient income to meet their calorie needs. The main causes of poverty are low
 agricultural productivity, low non-farm income, low education, and poor health. Aquaculture
 project would be an efficient solution to increase the per capita income.


 Over-fishing and pollution now threaten this valuable resource, resulting in environmental
 degradation through the loss of species in the Lake. It is only by implementing concerted
 policy measures that this degradation can be reversed. Possible solutions for consideration are
 population control measures, education and training, especially appropriate fish management
 techniques(aquaculture), both domestically and internationally, and poverty reduction through
 economic and social development.


 2. Fisheries

 Agriculture is the mainstay of Malawi’s economy, accounting for almost half of the GDP, and
 for almost all export revenues. The fishing industry contributes between 1 and 2% to the GDP,
 and employs almost 300,000 people either directly or indirectly. The majority of the catch is
 caught by small-scale fishers. However, in the southern part of the lake there is a commercial
fishery (MALDECO) that targets fish stocks further offshore than do most artisanal fishers.
Fish are estimated to provide about 70% of dietary animal protein, and the majority of this fish
comes from Lake Malawi.


Fisheries activities in Malawi are based on three categories: traditional, commercial and
ornamental. The traditional fisheries operate in inshore shallow areas of Lake Malawi and over
the entire surface in other water bodies, including Lakes Malombe, Chilwa, Chiuta, Chia
Lagoon, Upper and Lower Shire River, etc. Production units are small and the catch per unit
effort(CPUE) low and often consisting of many different species. Traditional fisheries accounts
for about 80% of the total catch from Lake Malawi and 100% of the catch elsewhere. The
commercial fishery is confined to the southern part of Lake Malawi, and uses stern and pair
trawlers.


While fisheries catches have remained relatively stable, the catches of a number of larger, more
economically valuable species have declined dramatically, especially in the southern arms of
the lake where fish catches have historically been the greatest. These include catfish (Bagrus
and Bathyclarias species), mpasa (Opsaridium microlepis), nchila (Labeo mesops and L.
cylindricus), and chambo (Oreochromis species). The reduction in numbers of catfish and
chambo is due to overfishing, while the decline of potamodromous fishes (mpasa and nchila) is
likely due to a combination of overfishing and degradation of river and nearshore habitat. The
persistence of relatively constant catch rates, despite the declines in several species, is due to
increasing fishing pressure and a reduction in net mesh sizes, and as a result the CPUE has
declined, as has per capita income.


Declining catches and expensive transport to the countryside have impeded access of the lower
income groups to fish from the lakes. It is in this context that small-scale integrated fish
farming developed. Apart from trout culture for sport in some mountain streams (up to 1930),
commercial aquaculture started only recently, with a few private farms near Lake Malawi. At
the same time, there are approximately 3,500 small-scale non-commercial fish farmers.


3. Current Development

By far the largest part of aquaculture production in Malawi originates from small-scale family
enterprises in extensive or semi-intensive pond culture systems. The few commercial ventures
that exist are using the same semi-intensive production system with fertilization, low-cost
protein-poor feed and stagnant water. Most fish is produced in mono-and polyculture systems,
mainly with various tilapias (Oreochromis shiranus, O.mossambicus and Tilapia rendalli) as
the main species. Some cyprinid and clariid species are also used to a lesser extent. Trout
farming has come to a halt, although the infrastructure is still present. Cage culture is still in
the planning stage.


Aquaculture statistics from 1998 indicate an aquaculture production of 15 M/T of common
carp, 22 M/T of tilapiine species and 187 M/T of other species. Compared with a total capture
fisheries production of 41,111 M/T/year, aquaculture only accounts for 0.5% of total fish
production in Malawi. Average productivity levels could not be obtained for the commercial
farms.


The strength of the local market for fish in Malawi is good. A FAO study in 1998 placed the
country as having the third-highest potential for farm-gate sales in the whole of Africa.
Assessments of the potential for fish farming in Africa show that there is significant land area
in Malawi for the development of aquaculture. Also, large water surfaces exist for the
development of cage culture.


4. Potential of Fish Farming

As the basic data concerning fish farming in Malawi (such as fish species, their environment
and their exploitation) are often patchy and sketchy, and mostly outdated, it is difficult to
assess its potential as an engine for growth. However, the World Bank’s Malawi Poverty
Reduction Strategy Papers (PRSP), which recommends a poverty reduction strategy based on
four pillars of broad strategic goals of (i) promotion of growth and diversification of economy;
(ii) improvement of delivery of social services; (iii) improved governance, and (iv) policy
integration on HIV/AIDS, gender, environment, and science & technology, places a high
priority on fisheries as an important sector to develop under the banner of natural resources
management together with forestry and wildlife parks.


The Malawi PRSP underscores the importance of fisheries as the main source of dietary
protein, highlighting the declining per capita fish consumption of 45% in recent years
compared to the peak fish production in early 1990s. The declining fish production is attributed
to over-exploitation and the use of primitive fishing methods which restrict fishing to shallow
areas. The Malawi PRSP underlines the need to explore more advanced fishing methods for
deep water fishing and the fish farming (aquaculture) that has not been exploited despite efforts
by the Government and some development partners.
As a fisheries sub-sector strategy, the Malawi PRSP stressed the need to empower the Beach
Village Committees (BVCs) which will undertake the key livelihood strategies of off-shore
fisheries promotion and local fish farming. Under the Strategy, fisheries extension services will
be strengthened and focused on the promotion of technology to increase off-shore fishery,
fisheries enhancement technology and fish farming in local communities with active
participation of women. Further, efforts will be made to promote the establishment of better
markets and marketing practices for fish through training in handling, processing and
packaging of fish products. Stakeholders (traders, fishing groups and private sector) will be
encouraged to invest in appropriate physical infrastructure, such as refrigeration facilities.
Awareness of environmental management issues will be achieved through improving fisheries
curricula at extension training colleges, and translating existing fisheries research data into
user-friendly information materials.
Chapter 2. Market Research Study

1. Planning

Marketing analysis progresses by following order.


              ysi   ect    i
          A nal s obj establshm ent

                                     l on
                            D ata colecti

                                       ysi
                              D ata anal s

                             ng
                      M arketi operati on
                               i
                         establshm ent
                              <Marketing analysis progresses>


2. Analysis object

Analysis objects would include market environment, market trend, competitiveness of product,
demand forecasting and STP etc. Each process are as following.


Market
Export market: EC, North America, SADC(Southern Africa Developing Countries)
Domestic market: for protein supply source


Analysis species
Trout, Tilapia, Common carp etc.


Market analysis
Whole market scale, market analysis for competition product, consumption style analysis,
consumer composition distribution and market change.


Competitive position analysis of product
Quality level, comparison with competition product, SWOT analysis.


Demand estimation
International market share, product sale possibility amount conclusion, market environment
analysis, sale strategy establishment.


STP(Segmenting, Targeting and Positioning) Analysis
Establish target market after analyzing data of market trend, competitiveness of product and
demand estimate etc.


3. Data Collection

Data collection through Malawi government's statistical data, international statistical data
(FAO etc.), literature review and questionnaire.          Data to collect includes market trend,
international market share, whole market scale, consumption style, competition market
analysis, market growth rate, competitiveness of product and positioning. Data collection
through literature review, questionnaire and actual place study and method are as following.


             -   Publication    data     (international   organization,   government,   producer
                 organization, financial organization, university, research institution etc.):
                 market share, market scale, product quality and skill level, competition
                 product market data etc.
             -   Questionnaire and interview to competitor, government agency, producer
                 organization and consumers: market change estimate, consumption style and
                 Recognition Measure
             -   Publication data about Market share, market scale, international trade and
                 competition product market: Fisheries Statistics of FAO and WTO, Fisheries
                 Department of EC, North America, SADC country and Malawi etc.
             -   Publication data about product quality and skill level: Trout Farmers
                 Association, Aquaculture Information Center (AIC) and Journal of
                 aquaculture society etc.
             -   Questionnaire about market change estimate, consumption style and
                    Recognition Measure: GMS(general merchandise store), exporters and importers,
                    Wholesale market, fisheries department of China, Aquaculture Information
                    Center (AIC) , US Trout Farmers Association, American Fisheries Society,
                    Aquaculture Association of Canada, Asian Fisheries Society, Dutch
                    Aquaculture Society, European Aquaculture Society and Fisheries Society of
                    the British Isles etc.
                -   Interview about market change estimate, consumption style and Recognition
                    Measure: GMS(general merchandise store), exporters and importers, Wholesale
                    market,, fisheries department of SADC country and Malawi, and regional fish
                    producers etc.


4. Data Analysis

Collected data analyzes through edit, analysis process of statistical processing etc.   Analysis
method uses STP analysis, SWOT analysis, market potential analysis that uses time-series
analysis etc.


Market analysis
Utilize to market confrontation strategy establishment of product through marker analysis such
as market situation and Competitive Analysis.


SWOT analysis
After analysis of Strength, Weaknesses, Opportunity and Threats for product grope
confrontation strategy.


STP analysis
Establish marketing strategy for product after study of STP(segmentation, targeting,
positioning). STP analysis considers and progresses two aspects.        First, as protein supply
source for people and commercial utilization in domestic market.      Second, as export goods to
international market.


5.Marketing Strategy Establishment

Establish marketing strategy that based on 4P of marketing mix.
Chapter 3. Feasibility Study

1. Introduction

This Feasibility Study is a process to examine and review the feasibility of aquaculture in
Malawi, looking into its technical, institutional, economical, political aspects based on the
aforementioned marketability research of fish-farming. Accordingly, the contents of this study
can be used as criteria to set up future business plans and at the same time provides basic
information necessary for the business operation.


This Feasibility Study will go through 3 steps: First, analyzing the possibility of aquaculture
and feasibility of legal and regulatory system; Second, analyzing the feasibility of the business
action plan; Third, looking into the market and price to make a feasible analysis in both
financial and economical points of view.


This process will not only prevent failure in investment and management but also enable to
decide the investment priority, to allocate resources effectively, and to complement insufficient
parts of the business plan.


2. Analysis of Aquaculture Viability

To review the viability of aquaculture business in Malawi, initially, we should figure out the
development status of the target species while appointing the appropriate temporary site and
analyzing the appropriateness of the farming method, which is under consideration. At this step
of analysis, we have to discern the scale of the fish-farming as small-scale and large-scale to
suggest a production method customized to the local circumstances. Also, we have to study the
volume of available labor power and the level of technology to see if they can maintain
competitiveness in the international market. Meantime, we’ll forecast the viability of
aquaculture in Malawi as including the analysis of required capital and the possibility of its
acquirement. To have a clear understanding on the level of domestic technology and
potentiality, we’ll ask cooperation to local specialists (such as experts in aquaculture fisheries
science and natural resources management at Malawi University) for related information and
current status.


3. Analysis of Business Plan
The purpose of this analysis on business plan is to increase the national income of Malawi
people and break through the poverty by developing household income source and resolve the
shortage of food by diversifying protein supply through aquaculture. During this phase, we’ll
appoint the strategically critical site, which is appropriate for a single specy and its farming
method, to start aquaculture business. Next, to set up the scope of this business, we’ll figure
out the scale of the facilities and required capital to provide estimation of the productivity.
Based on this kind of information, we’ll make a cost benefit analysis to analyze the
effectiveness of investment and the spin-off effect on regional economy. This will work as the
criteria to decide whether or not operate this business plan in the future as well as in what order
to put the priority.


Meantime, according to the results of previously performed analysis on market trend, product
competitiveness, and demand forecast, we’ll appoint the target market and set up the sales plan
and marketing strategy for the product. We’ll use STP, SWOP, time series analysis as
integrated analysis method to forecast the market potentiality.
The research data for abovementioned analysis will be collected from the governmental and
industrial statistics of Malawi, international statistics such as FAO, academic researches, poll
survey, and etc. The material may include contents regarding target species, fish-farming
method, selection of the strategically critical sites, working force, market trend of target
product and competitions, worldwide market share, market size, consumer attitude, product
competitiveness, positioning, environmental assessment, and etc.


4. Institutional Analysis

During the study of legal and regulatory aspects of Malawi’s fishery and aquaculture, we’ll
review the institutional conditions necessary to develop and enhance aquaculture. To figure out
the status and importance of aquaculture among the whole industry, we’ll make a concrete
study on regulation and interrelation of each industry field by industry linkage analysis.


Moreover, while checking the viability and feasibility of government support against fish-
farming, we’ll seek for the viability to get consistent and coherent support from the
government.


In particular, we will analyze government’s policy and practice for providing credit to farming
households and communities and enterprises, and for handling exchange risks. We will study
the institutional and technical capacity and performance of the apec credit institution (most
likely MDC) regarding its credit (on-lending) policies and practice in other sectors as well as in
aquaculture. We will have to study the selection criteria, on-lending terms and performance
supervision of intermediaries and first line credit institutions.


5. Analysis of Feasibility

During the analysis of feasibility, we have to analyze and assess the marketability, economic
efficiency, financial feasibility, and environmental effects of the business plan to review the
possibility of success.


Based on the material of market research, which was initially performed for marketability
analysis, we’ll review the market environment and set up a marketing strategy upon the market
scale estimated by the analysis of market structure in the viewpoint of industry, customer, and
competition.


Analysis of economic efficiency is the stage to assess the possibility and certainty of the
business plan in the view of profitability. We will adopt Payback period analysis, Net Present
Value, Internal Rate of Return method for this stage of study.


To analyze the future financial status, we have to estimate the volume of required capital and
draw up the estimated income statement and the estimated balance sheet after setting up the
action plan. Based on the estimated income statement we’ll analyze the financial ratio. For this
stage of analysis, we will apply current ratio, debt ratio, fixed assets to equity and long term
liability, profit ratio of total liabilities and net worth, Net Income on Sales, return on
equity(ROE), Total Assets Turnover, trade receivables/inventories, net sales growth rate, total
assets growth, net income growth rate, and etc.


In carrying out the aquaculture business, the other important evaluation criterion is the
environmental impact assessment. As the pollution generation has spread with the flow of
various pollutants into the Lake Nyasa and Lake Chilwa, the major inland fishing zone in
Malawi. The environmental impact assessment is absolutely necessary for carrying out the
business in the future. Surely, in case of the production volume of aquaculture increases,
pollution may negatively affect the ecological environment due to the discharge of wastewater
and feed, as well as the use of antibiotic.


For the abovementioned environmental analysis, it is necessary to conduct the sample survey
by selecting the strategically critical site in Lake Nyasa and Lake Chilwa in cooperation with
the local research institutes or universities and to compare and analyze the local survey results
conducted during the past several years. The evaluation of the environment will be made on
the status of water management, paddy soil management, habitat group management. Based on
this information, we’ll assess the environmental carrying capacity and review the economical
change based on changes of environmental carrying capacity, which conforms to the
production volume and relates to environmental pollution, to review the ecological feasibility.


Also, we’ll proceed with sensitivity analysis to find out the variables (e.g., raw material price,
product price, sales cost, and etc.) which affect the results of the planned business and analyze
how it may affect the profitability. Research on population, income, purchasing power will be
included and as an index to show the purchasing power, we’ll have a close look mainly into the
composition and order of the population, demographical features, national income per capita,
GDP, personal income distribution, as well as other index.
Chapter 4. Project Preparation

1. Introduction

As the project preparation is expected to start after the market study confirmed the potential
domestic and export markets for the Malawi Fish Farming Project and the feasibility study
established the technical feasibility and economic viability and financial profitability of
commercial fish farming, the project preparation works of the consultants will be largely
guided by the parameters of the above mentioned two studies.


The overriding principle in project preparation would be, as clearly stated by the Client, the
participatory or bottom up approach in which the aspirations and comments of all stakeholders
should be fully incorporated in project design. In this regards, there will be close consultation
and coordination among all stakeholders and the Consultants throughout the whole period of
project preparation by holding frequent workshops and consultation sessions.


2. Project Justification

Given the unique feature of Malawi in which the Malawi lake and other lakes occupy such a
large part of surface, the fish farming project should be clearly justified in the contexts of
Malawi’s agriculture sector in general and the fisheries sub-sector in particular. Therefore, the
Consultants will collect and present the Government’s sector strategy and policies in
agriculture, rural development and fisheries sectors at the outset of the project preparation
report.


3. Project History

Before describing the salient features of the Project, the Consultants will present the history of
the Project, including the origin of the project concept and the constraints that hampered the
earlier materialization of the project.


4. Project Features

Though the salient project features such as the scope, location and nature of Project would
have been agreed during the feasibility study phase, the salient features of the Project will be
further discussed and finalized in consultation with the stakeholders during the project
preparation stage. Consensus of all stakeholders would be reached regarding the following
project features:
         (i)         Scope – one or multiple fish farms?
         (ii)        Location – location of fish farms;
         (iii)       Size – medium or large size;
         (iv)        Business scope – export only or both domestic and export;
         (v)         Joint venture possibility with foreign private capital?
         (vi)        Processing plants – size and location
         (vii)       Fish species


5. Implementing Arrangements

                 -   Malawi Development Corporation (MDC)
                     Legal status, mandate, organizational structure, governance, human resources
                     constraints, training needs, financial positions, accounts and audits etc.
                 -   Department of Fisheries (DOF)
                     Mandate, its roles in fish farming, leverage on MDC through policies,
                     Other investment programs in fisheries sector etc.
                 -   National Aquaculture Center (NAC)/Bunda College, University of Malawi
                     Mandate, role in fish farming, role in project implementation etc.
                 -   NGOs ( especially, WorldFish Center, Malawi office)
                 -   Roles of women, fishermen’s associations, Beach Village Committees.
                 -   Project Implementation Schedule.
                 -   Procurement Arrangement


6. Credit Provision

Availability of credit, terms and conditions of credit, lending and onlending rates,
Financial intermediaries ( National Bank of Malawi or fishermen’s cooperatives?)


7. Project benefits, Impacts and Risks

                 -   Economic Impacts
                 -   Poverty Reduction Impacts
                 -   Social Impacts
                 -   Environmental Impacts
             -   Risks


8. Assurances

In order to safeguard the sustained project viability, a set of assurances from the Government
should be obtained with respect to taxation, custom duties, credit provision, fisheries research
and extension among others.
References

Adams, T., Bell, J. and Labrosse, P. 2001. Current status of aquaculture in the Pacific Islands.
In R.P. Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. Mcgladdery& J.R. Arther, eds.
Aquaculture in the Third Millennium. Technical Proceedings of the Conference on Aquaculture
in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp.295-305. NACA,
Bangkok and FAO, Rome.


Brummnet, R.E. 1994. Aquaculture Policy Options for Integrated Resource Management in
subSaharan Africa. Proceedings of a Workshop held in Zomba, Malawi 22-25 February 1994.
International Center for Living Aquatic Resources Management, Deutsche Gesellshaft fuer
Technische Zusammenarbeit(GTZ) GmbH.


Chikafumbwa, F.J.K. 1996. Use of terrestrial plants in aquaculture in Malawi, Africa. pp. 175-
182. in R.S.V. Pullin et al. (eds.) The Third Symposium on Tilapia in Aquaculture. ICLARM
Conf. Proc., 41.


El Gamal, A.R. 2001. Status and development trends of aquaculture in the Near East. In R.P.
Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. Mcgladdery& J.R. Arther, eds.
Aquaculture in the Third Millennium. Technical Proceedings of the Conference on Aquaculture
in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp.357-376. NACA,
Bangkok and FAO, Rome.


Harvey A. Bootsma & Sven Erik Jorgensen, 2004. Lake Basin Management Initiative. LAKE
MALAWI/NYASA BRIEF, Third DRAFT Not for Citation or Distribution.


Hernandez-Rodriguez, A., Alceste-Oliviero, C., Sanchez, R., Jory, D., Vidal, L. & Constain
Franco, L. -F. 2001. Aquaculture development trends in Latin America and the Caribbean. In
R.P. Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. Mcgladdery& J.R. Arther, eds.
Aquaculture in the Third Millennium. Technical Proceedings of the Conference on Aquaculture
in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp.317-340. NACA,
Bangkok and FAO, Rome.


Jamu, D.M. and O.V. Msiska. 1996. Liming of fish ponds in Malawi: a comparative study of
limed and unlimed ponds. pp. 54-64. In R.S.V Pullin (ed.). The Third International Symposium
on Tilapia in Aquaculture. ICLARM Conf. Proc., 41.


Joshua Nyambose. 1997. Preserving the Future for Lake Malawi. African Technology Forum.


Josupeit, H., Lem, A. & Lupin, H. 2001. Aquaculture Products: Quality, Safety, Marketing and
Trade.   In R.P. Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. Mcgladdery& J.R. Arther,
eds. Aquaculture in the Third Millennium. Technical Proceedings of the Conference on
Aquaculture in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp.249-257.
NACA, Bangkok and FAO, Rome.


Kissa R Mwakiyongo. 2002. Analysis of Catch and Effort Data for the Fisheries of the
KARONGA AREA of Lake Malawi, 1980-2000. Fisheries Research Unit P.O. Box 27 Monkey
Bay, Government of Malawi Department of Fisheries.


Machena, C. & Moehl, J. 2001. Sub-Saharan African aquaculture: regional summary. In R.P.
Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E. Mcgladdery& J.R. Arther, eds.
Aquaculture in the Third Millennium. Technical Proceedings of the Conference on Aquaculture
in the Third Millennium, Bangkok, Thailand, 20-25 February 2000. pp.341-355. NACA,
Bangkok and FAO, Rome.


Michael V. Kapeleta. 2001. Promotion of Sustainable Commercial Aquaculture in Sub-Saharan
Africa. Experiences of Selected Developing Countries. Copies of FAO publications can be
requested from Sales and Marketing Group Information division, FAO in Rome.


Olin, P.G. 2001. Current In R.P. Subasinghe, P. Bueno, M.J. Phillips, C. Hough, S.E.
Mcgladdery& J.R. Arther, eds. Aquaculture in the Third Millennium. Technical Proceedings of
the Conference on Aquaculture in the Third Millennium, Bangkok, Thailand, 20-25 February
2000. pp.377-396. NACA, Bangkok and FAO, Rome.


Varadi, L., Blokhin, S., Pekar, F., Szucs, I. & Csavas, I. 2001. Aquaculture development trends
in the countries of the former USSR area. In R.P. Subasinghe, P. Bueno, M.J. Phillips, C.
Hough, S.E. Mcgladdery& J.R. Arther, eds. Aquaculture in the Third Millennium. Technical
Proceedings of the Conference on Aquaculture in the Third Millennium, Bangkok, Thailand,
20-25 February 2000. pp.417-429. NACA, Bangkok and FAO, Rome.
                       Comments/Suggestions of Consultant

On the Terms of Reference (TOR):

1. We propose that the two stages (marketing studies and feasibility studies) should be combined
and made into one stage (Marketing and feasibility studies) for the following reasons:
    (A). To design marketing surveys, we would need to select fish products and potential
    markets. However, without checking out the technical, financial and economic feasibility of
    some fish products, it would be difficult and, in fact, meaningless to select fish products and
    potential markets. It is essential to have interactions between marketing studies and feasibility
    studies to make an investment decision. Without marketing studies, a feasibility study would
    not be complete, However, it is also true that without any technical and financial feasibility of
    some fish products, it is unsound and uneconomical to design a marketing study.
    (B) The current state of art is that there is no clear-cut, objective and generally accepted
    critical tool available for making an investment decision solely based on a marketing study.
    Only when a feasibility study is made on the basis of a marketing study, would a sound and
    generally accepted preliminary investment decision be made.
    (C). It is economical and efficient to combine marketing and feasibility studies since a
    preliminary investment decision can be made on the basis of not one, but two combined
    studies.


3. The team of consultants should be modified for efficient implementation of the proposed
    assignment.
 - An economist, separately from an institutional financial analyst would be needed to handle
  project planning, management, cost-benefit analysis, and implementation. Together with the
  financial analyst, the economist will also assist the marketing specialist in designing and
  interpreting the marketing survey and results.
 - Therefore, we propose that the estimated key professional staff months should be increased.
  (LOI Data Sheet, 3.3 (ⅲ))


4. The feasibility study phase would require more time. Therefore, we propose to increase the
estimated time for the feasibility study. However, since we propose to combine marketing and
feasibility studies to same time and staff-months, the total elapsed time would be increased only a
few weeks.


On the data, services and facilities to be provided by the Client indicated in the
TOR:

In addition to those listed in the TOR, we add the followings:


1. Data for technical analysis of the local tilapia and the Common Carp production capacity
 - Current and future methods of production (Ponds, Cage, and etc.), scale, number of technician
  and labor
 - Current and future nutrition, generics, ecological characteristics, environmental condition,
  artificial seedling technology, and fish population density of a facility


2. Data for feasibility study
 - Aquaculture production capacity: monthly and per unit area weight and size
 - Production cost: feed, seedling, labor, depreciation etc
 - Present states of fish farms: number and ownership (private enterprises, state owned enterprises,
  community organizations, associations, clubs, etc.) of farms, assets (liquid and fixed),
  liabilities(liquid and fixed), labor structure, state of profit and loss
 - Price of fish: domestic, import and export prices
 - States of distribution and processing and import and export: number of distribution and
  processing companies, financial structure of distribution and processing companies, financial
  structure of importing and exporting companies
 - Facilities for circulation and processing: states of cold storage and circulation facilities
 - Co-work with a professor in University of Malawi, focusing on agricultural engineering


3. Details of Malawi Development Corporation (MDC) and World and National Aquaculture
    Centers (WAC and NAC)
 - The size, employee structure, financial structure, portfolio status of on-lending operations, on-
  lending terms, foreign exchange risk management policies, and a state of profit and loss of
  MDC
 - Research focus and achievements of WAC and NAC, production technology of Tilapia and
  Carp


4. Facilities and services related to research
 - Possibilities of internet utilization and other communication services
 - Personnel for field survey
 - Cooperation from Malawian government
 - Cooperation and help for research from relevant firms and institutions during field survey
Format of Curriculum Vitae (CV) For Proposed Key Staff

Proposed Position: Marketing specialist


Name of Firm:


Name of Staff:


Profession: Fisheries Economist


Date of Birth:


Years with Firm: 13 years. Nationality: Korean


Membership in Professional Societies: Society of Korean Fisheries Management


Detailed Tasks Assigned: Market Analysis and Report Writing


Key Qualifications:


As referring from Firm’s reference, he conducted roles of a leader and director for many project,
specially related to a resource management, marketing analysis, aquaculture industry analysis, and
etc.


Education:


Ph.D 1994, ______ National University, Fisheries Economics
M.S. 1988, ______ National University, Fisheries Economics
B.S. 1986, ______ National University, Fisheries Economics


Employment Record:


1997 – Present : Fisheries Economist /
1991 – 1997 : Researcher, National Fisheries Research and Development Institute
Languages:


             English (Excellent)
             Japanese (Fluent)


Certification:


        I, the undersigned, certify that to the best of my knowledge and belief,
        these bio-data correctly describe myself, my qualifications and my
        experience.




                                                              Date: 03/11/2004
Signature of Staff Member or                                   Day/Month/Year
authorized official from the firm
                                 Work Plan and Time Schedule for Key Personnel

                                                                                                       Months (in the form of a Bar Chart)
     Name    Position            Reports Due/Activities
                                                                               1          2            3           4            5         Number of Months
             Leader              Aquaculture Industry Feasibility       ----       ----         ----        ----         ----        1 and half         Subtotal (1)
             Fisheries Economist Research study                         --------- -----                                              1 and half         Subtotal (2)
             Financial analyst   Feasibility study                                        ----- ---------                            1 and half         Subtotal (3)
             Environmentalist    Environmental Analysis                                   ----- ---------                            1 and half         Subtotal (4)
             Preparation         Coordination        of   preparation
                                                                                                                   ----- -----       1                  Subtotal (5)
             Coordinator         activities & preparation document
                                                                                                                                     7                         total


Full Time:   2                   Reports Due:                7 2005
Part Time:   3                   Activities Duration:        3/2005 – 7/2005


                                      Yours faithfully,


                                          Signature
                                                      (Authorized Representative)


                                          Full Name       Jeong-Gon Ryu
                                          Designation     Korea Maritime Institute
                                         Address 1027-4 Bangbae 3-Dong Suam B/D                  Seocho-Gu, Seoul 137-851           Republic of Korea
Composition of the Team Personnel and the Task each would be Assigned to each Team Member

                                        1. Technical/Managerial Staff
         Name                                    Position                                      Task Assignment
                           Team Leader & Aquaculture specialist         Aquaculture feasibility analysis & Report writing
                           Fisheries economist                          Market analysis & Report writing
                           Financial analyst                            Financial analysis & Report writing
                           Environmentalist                             Environmental analysis & Report writing
                           Preparation Coordinator                      Coordination of preparation activities & Preparation document


                                                  2. Support Staff
         Name                                    Position                                      Task Assignment
                           Fish marketing specialist                    Market survey and analysis
                           Resource economist                           Economic analysis
                           Macro economist                              Economic analysis
                           Aquaculture specialist                       Aquaculture technical analysis
                           Aquaculture economist                        Survey & Data analysis
                           Economist                                    Survey & Data management
                           Implementation analyst                       Implementation
                           Fisheries Management                         Survey& Relevant data review
                                                    Work Plan/Time Schedule

                                                            1. Field Investigation


                                                                       Monthly Program from date of assignment (in the form of a Bar Chart)
Items of Work/Activities
                                                        1                 2                3                4                 5
Marketing and Feasibility Studies                 ---------------- ---------------- ---------------- ---------
Project Preparation                                                                                          -------   ----------------


               2. Completion and Submission of Reports (as indicated under Appendix B enclosed with General Conditions of Contract)


                       Reports                                                                             Date
1.        Inception Report                        3/ 2005
2.        Interim Progress Report
         (a)       First Status Report            4/2005
         (b)       Second Status Report           5/2005
3.        Draft Report                            6/2005
4.        Final Report                            7/2005

								
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