Describes basics of Ornamental fish cultivation

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Project Report on Ornamental Fish Cultivation
Yasas Bandara
Diploma in Credit Management
IBSL Kandy Batch
S.M No 20061205 NIC 921131747V

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Executive Summery
Ornamental fish farming can be a promising alternative for many people. It requires little space and less
initial investment than most other forms of aquaculture. At the first stage of starting of an ornamental fish
farm, very sophisticated or complicated equipment is not necessary. This report provides briefing of
international and local market condition of the ornamental fish farming.
Main objective of the project is to direct 25 young individuals to becoming a successful entrepreneurs in
Ornamental fish industry. This report provides a SWOT & PESTLE Analysis and discuss about the cost and
income generation of the project while presenting the financial requirements
Further this includes risk factors and mitigating points with terms and and conditions to strength and entrust
the viability of the project.

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Contents
Executive Summery...........................................................................................................................................2
1. Introduction ................................................................................................................................................4
2.Ornamental fish industry in Sri Lanka............................................................................................................4
3.Major Types of Ornamental Fish....................................................................................................................6
4. Major Institutions in Sri lanka Supporting Ornamental fish cultivation......................................................10
5.Pilot Project...................................................................................................................................................10
a) Requirements of the participants ..........................................................................................................11
b) Main activities of Ornamental fish breeding and training centre .........................................................11
c) Target Market........................................................................................................................................11
d) Financial Contribution ..........................................................................................................................12
e) Management and Monitoring................................................................................................................12
f) Selection of Oranamental Species for the project and Location...........................................................12
7. Project SWOT Analysis....................................................................................................................14
8. Basic Requirement to Start Ornamental Fish Farming Business..........................................................16
9. Financial Projection ..............................................................................................................................17
11. Risk Analysis & Mitigation Instruments...........................................................................................19
12. Conditions & Recommendations..........................................................................................................20
References........................................................................................................................................................21

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1. Introduction
Aquarium fish keeping is a centuries-old popular hobby, growing interest in which has resulted in steady
expansion in its trade in more than 125 countries. With the increasing popularity of household aquariums, less
than 1% of the global market for ornamental fishes belongs to the public aquaria sector, with the rest still
confined to hobbyists. Most of the ornamental fish is sourced from developing countries in the tropical and
sub tropical regions.
The international trade in ornamental fish in fact, provides employment opportunities for thousands of rural
people in developing countries. As a result of advancements in breeding, transport and aquarium technology,
more and more species are being added every year. Over 2 500 species are involved in the global ornamental
fish industry, of which over 60% are of freshwater origin. Although relying largely on captive-bred freshwater
fishes, the trade also includes significant numbers of fish and invertebrates collected from the wild. It has been
estimated that about 30 freshwater fish species dominate the global market, such as live bearers, neon tetra,
angel fish, gold fish, zebra danio and discus. The guppy and neon tetra species alone represent more than 25%
of the market by volume and more than 14% by value. Marine fish species constitute more than 15% of the
market by value, with about 98% collected from the wild while the rest are captive-bred.
Although more expensive and not as easy to maintain as freshwater aquariums, keeping marine fish in
aquariums is becoming more popular. Particularly in the USA and Europe, as prices are becoming more
affordable, the marine aquarium sector is expanding rapidly. Technical and economic developments have also
helped contribute to the popularity of marine aquariums, especially marine reef ecosystem aquaria complete
with fish, corals, shellfish, molluscs and plants. The trade at retail level is worth more than US$10 billion with
an average annual growth of over 10%, while the entire industry including plants, accessories, aquarium, feed,
and drugs is estimated to be worth more than US$18-20 billion
2.Ornamental fish industry in Sri Lanka
Ornamental fish industry of Sri Lanka originated with the establishment of the Zoological Gardens in early
1940s. A few industrialists were involved in breeding fish before, but not on commercial basis. Of the few
reputed personalities who encouraged divers on collection of marine fish as a hobby was Sir John Kotelawala.
However the first public Aquarium was established in 1952. During a period of 60 years the industry became
commercialized with the celebration of 50 year anniversary by some companies like, Lumbini Aquarium,
Aquamarines International Private Limited.
Today nearly 50 leading companies export about thousand varieties of fresh and marine water ornamental fish
to over 50 countries. Leading exporters on large scale business of aquariums located in Colombo suburban
areas and Negombo region have started moving to Mahaveli and dry zone rural areas. Prevalent peaceful

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environment in the North and East has caused the expansion of the industry into tropical climatic locations in
the island.
Majority of ornamental fish production targets the export market, however those not up to international
quality standards are sold at local market. Presently there are around 45 established exporters in this sector
and according to the Central Bank Annual Report 2017 e from Marine & Fresh Water Fishing &
Aquaculture contributed 177,733 Million for Gross National Income of Sri Lanka. The Country export
ornamental fishes to over 40 countries and the main export destination of Sri Lankan Ornamental Fish are
USA, Japan, UK, Germany & France whilst demonstrating high growth in demand from emerging markets
such as Qatar ,Canada etc. Main competitors of Sri Lankan Ornamental Fish Industry including Singapore
who is the market leader at present and Malaysia, Indonesia, Czech Republic etc.

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3.Major Types of Ornamental Fish
Fresh water fish are guppies, swordtails, platys thorns tetras, angels .gourami's, catfishes. These fish are
colourful and eye-catching. The most demanded fish in the global market are guppies.
Guppies (Examples)
Black Blonde Rainbow Blonde Red Black blonde Red Tuxedo
Cobra Green Cobra Red Red Mosaic Tail Neon Blue
Platy
Platy Red Platy Coral Red Platy Red Wag Tail Platy Sunset

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Platy Red Brush Tail Platy Red Wag Brush Tail Platy Black
Platy Emerald
Sword Tails
Red High Fin Golden Comet Red Tuxedo
Red Wag Tail
Red High Fin Lyre Tail Black Pineapple
Red Half
Molly
Safron Molly Black Lyre Molly Marble
Marble Baloon Molly
Silver Dalmation Dalmation balloon molly
Ballon Sily
Angel
Black Golden Marble Tiger

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Zebra Tricolur Platinum
Tuxedo
Tetra
Black Widow Black Phantom Black Neon Tetra Red Super Serpae
Glow Light Penguin Lomon Grass
Blood Finn
Different types of conditions for Ornamental Fishes

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4. Major Institutions in Sri lanka Supporting Ornamental fish cultivation
NAQDA – National Aquaculture Development Authority in Sri Lanka
The National Aquaculture Development Authority (NAQDA) coming under the purview of the Ministry of
Fisheries and Aquatic Resources was established in 1999 by the Parliamentary Act (No. 53 of 1998). It is the
main state sponsored organization mandated the development of the aquaculture and inland fisheries sector
in Sri Lanka.
NARA
The National Aquatic Resources Research and Development Agency (NARA) is the principal National
Institute charged with the responsibility of carrying out and coordinating research, development and
management activities on the subject of Aquatic Resources in Sri Lanka
Ocean Univercity
The objective of the University is to conduct academic and professional education and vocational training
activities in fisheries, marine and nautical engineering to fulfill and develop the needs of the fisheries and
allied sector.
Department of Fisheries and Aquatic Resources
Department of Fisheries and Aquatic Resources (DFAR) is operating under the Preview of the Ministry of
Fisheries and Aquatic Resources Development as its main implementation body. Mandate of the
Department Fisheries and Aquatic Resources is Management, Development and Conservation of
the Fisheries and Aquatic Resources of Sri Lanka.
Others
Central Environmental Authority
Department of Wild life
Department of Animal Quarantine
Licenses and certifications required
Health Certificate - Dept of Animal Quarantine
Certificate of Origin -Dept of Commerce
GSP form A for Fish or Plant -Dept of Commerce
Permit for Restricted Speceis - Dept of Fisheries and Aquatic RESOUCES
Water Quality Cetificate - NARA/ITI
5.Pilot Project
25 younge school levers around the Kurunegala town has been selected for the pilot project. All of them are
ages 19-23 and doesn’t comply with any knowledge on the ornamental fish industry, However these 25
youths are keen on the ornamental fish industry and are willing to continue their career path on the same.

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a) Requirements of the participants
They should contribute minimum of 15% of the project cost
Should process adequate ground space to initiate the project.
Need to provide 2 guarantors as collateral for loan facilities
However due to lack of technical knowledge and management skills a good training programme and a
monitoring programme should be there to ascertain the viability of the project.
Out of the candidates who are eligible for the project to be undergo a training Program at Ornamental Fish
and training center at Rmabadagalla which is a government institute with adequate resource for the training
programmes. This institute mainly selected since its located about 45 minutes distance from Kurunegala
town center,
b) Main activities of Ornamental fish breeding and training centre
Provide training on ornamental fish farming
Supply of quality ornamental fish brooders to the farmers
To assist the farmers to maintain fish health
Disease diagnosis and advisory services
Supply of quality parent stock of ornamental aquatic plants
Conduct adaptive research on ornamental and aquatic plant culture
This is 22 Days work shop covering the basics of ornamental fish cultivation
Propagation and Cultivation of Ornamental Aquatic Plants. (3 days)
Ornamental Fish Breeding (3 days)
Disease Diagnosis and Fish Health Management (3 days)
Ornamental Fish Feed and Nutrition (3 days)
Ornamental Fish Farming (10 days)
c) Target Market
Phase 1 – The production will be supplied to medium and scale ornamental fish breeders for exporting
purposes. Agreements have already been succeeded with 2 medium scale ornamental fish suppliers and
negations are ongoing with the supervision of Serendib Bank Plc.
The selling prices to be below the market averages in the initial stage to capture the market segment and the
product quality to be maintained at the higher position to build up the reputation and demand in the field.
Potential buyers
1.Orna Fish Pvt Ltd
2.Aqua Marine Internatonal
3.Tropical Fish International
4.Seylon Aquatics Pvt Ltd

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5.Lumbini Aquarium
Phase2 –After establishment in the market segment the direct supply to export market to be implemented,
This will take about 2 -3 yeas and during the period the legal and economic resources to be gathered.
d) Financial Contribution
Serendib Bank plc will be the main finance partner of the project. Minimum 15% of the proposed project
cost to be incurred by attendees and bank will provide 85% of the project cost up to a maximum loan
amount of Rs.500,000/-
Central bank of Sri lanka Provide 50 % interest subsidy to a maximum loan quantum of Rs.500,000/-.The
average interest rates of the Serendib Will be 15% and after the 50% the interest cost of the project will be
7.5%.
Extracted from Budget Speech 2017
Floriculture and Ornamental Fish Industry
Honorable Speaker, to encourage the budding floriculture industry, I encourage the establishment
of 2,000 nurseries, where the government will support by providing a subsidy of 50 percent of the
interest for which I propose to allocate Rs. 50 million. In addition, the NCRC scheme which
provides 50 percent interest subsidies will offer support through a credit scheme with a maximum
loan limit of Rs. 500,000. This scheme will also be extended to the ornamental fish industry, which
has a significant potential for expansion where the utilization of the out grower system will bring in
more synergies. I propose to allocate Rs. 25 million for this purpose
The proposed loan to be repaid within a period of 5
Two guarantors will be provided by the applicants.
e) Management and Monitoring
Monthly progress report has to be submitted by the attendees to the serendib bank.
All the financial management knowledge and guidance will be provided by the institute and continues field
visits to will be made to ascertain the viability of the project.
Two guarantors as collaterals will strengthened the repayment process and the proceedings of the
f) Selection of Oranamental Species for the project and Location

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Breeding and rearing unit should be made near a constant supply of water and electricity. If the unit is
located near the streams, it will be excellent where the unit can receive portable water and the rearing unit
can be made flow-through
Most popular kinds Guppy and Molly to be used in the project which represent the over 70% of the demand
market.

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7. Project SWOT Analysis
STRENGHTS
Younge school leavers who are
willing to give their fullest effort
Avaialbility of natural resources
Ample market position
*Favorable year round climate
condition
*Availability of adequate economic
resources in the area
*Possibility for future expansions
Goverment Interest Subsidy
WEAKNESSES
Lack of technical knowledge
*Lack of basic business and
financial management skills
Financial stability
OPPOTUNITIES
High demand for Sri Lankan
Ornamental fish in both local &
International Market .
*Favorable economic policies for
young entrepreneurs & export
oriented products
*Availability of GSP+ and numerous
FTAs that encourage Ornamental
fish cultivation and export.
*Availability of Technical
knowledge from government
institutes
*Widely Distributed financial
institution to address the financial
needs
THREATS
Over Exploitation of wild fish
resources
Big Market Palyers
Lack of expertise in disease
identification and treatments
Rapid urbanization and
environmental pollution
Various type of predators
Market vulnerability

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Project PESTLE Analysys
Pilitical
 High political pressure on local breeders and farmers.
 •High rules and regulations on standardization of fish
 •Low government sport to the industry
 Government Type & Stability
 Regulation & De – Regulation Trends
 Social & Employment Legislation
 International Affairs of Government
Econimical
 •Cost of production is high due to low price imports.
 •High labor cost
 Stage of Business Cycle
 Current & Projected Economic Growth
 Labor Cost
 Availability of Economic Resources
 Impact of Globalization
 FTAs that helps to grow the demand of products
 Exchange Rates
Sociological
 •Lack of awareness about the local industry
 •The amount breading of species are less
 •Waste water management policies
 Cultural Aspect, Health Conciseness
 Education, Earning Capacity, Living Standards
 Ethical Issue, Ethnic & Religious Factor
Technoligical
 Poor technical maintenance of the facility
 •High cost on technology
 Breeding Technology,
 Researches on New Species
 IT & Communication Channel for marketing
 Use of technology for Security & Predators
 Transportation, Energy use & use of renewable energy sources, Water use & recycling

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Legal
 None updates acts and policies
 Lack of monitoring in fish handling
 Current home market legislation, Future Legislation
 European/ International Legislation
 Regulatory bodies & Process
 Environmental Regulation, Employment Laws
Environmental
 Bad weather conditions
 •Lack of inadequate sewage management
 Environmental Regulations, Environmental Issues
 Tropical Weather Condition
 Availability of Adequate water sources
 Impact of Balance of Nature
8. Basic Requirement to Start Ornamental Fish Farming Business
Tanks
The tanks can be of RCC or brick masonry work having flat bottoms with inlet and outlet pipes.Clay,
cement, fibreglass or plastic tanks. Rearing of fishes to be carried out in large tanks. The size of the tanks
varies according to space, the number, and type of fish culture.
Aquariums
Glass tanks of varying size are required for breeding. Number and size of the glass tanks depend on the
specific breeding/spawning behavior of the species selected.
Overhead tank
An overhead tank of suitable size for storing and to enable sedimentation of water is required.
Water Supply
Deep tube wells are the best source of water. Also, you can try recycling of water through bio-filters or
another sort of filtering mechanism. Other sources like dug wells, municipal water if available can also be
used. Furthermore, you must have a small pump to lift the water to the overhead tank and a network of pipes
to feed the culture tanks.
Work Shed
Work shed should be designed in such a way that the tanks get filtered sunlight. Translucent HDPE sheets
can be used. This also protects the culture tanks from falling debris and bird dropping etc.
Aeration equipment
A blower pump with a network of tubes for aeration is a must. Additionally, you must ensure continuous
power supply through generator set or UPS or inverter.

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9. Financial Projection
Fixed Cost (Rs)
3 Cement Tanks 100,000
Ground preparation 40,000
1 aerator pumps 90,000
Shed Construction 40,000
Other equipment’s like hand net ,
buckets pipes
20,000
Office room construction 80,000
Generator and regulator and other
equipment
85,000
Glass equipments 20,000
Water line & Drainage System 35,000
Other related expenses 30,000
Total Fixed Cost 540,000
Variable Cost (For 1 Month)
Fish - 750 female 500 male At the rate of Rs.20/-
per fish
25,000
Feed 5,000
Labor cost 30,000
Utility Bills 8,000
Misc 10,000
Total variable cost 78,000
Fixed cost + Variable cost 618,000
Production
(50% of the production is anticipated
during first 6 months which is 6000
units and it’s to be doubled as assumed
after 6 months)
Anticipated Monthly Production 6000 Income
Selling price At Rs.12 Rupees Rs.72,000

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Total Project Cost Rs.618,000/-
Customers Equity (20%) 118,000/-
Loan Faciliy (80%) 500,000/
618,000/-
Note- the Minimum Equity contribution should be 15% and the same is 20% which within
the expectations
10.Project Cash Flow

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11. Risk Analysis & Mitigation Instruments
1. Market Risk
In analyzing the results of the models, producing ornamental fish appears to be lucrative investment
& profitable venture to start up and entering to the export market will expand the income
opportunities for the promoters.
However at the present situation there are few dominating exporter leading the export market and for
years, many of the small-scale producers have been cooperating with those as contract farmers, who
provide there fish in buy back system for exporters and other non-contract farms who sells their
product for exporters through middle man.
Hence in order to mitigate the potential future price fluctuation & demand fluctuation risk and as an
entering stage of business it is advisable to have contract with exporters and entering to buy back
system at the initial stage of the business which ensure the continuous production and could
mitigate future uncertainties.
2. Impacts to predators
Generally, aquaculture production of ornamentals occurs where predators cannot access the stock.
The raising of bugs occurs in hatcheries, while outdoor ponds are often covered by plastic, and
predator netting. Also birds are the most common type of predator observed around freshwater farm
ponds.
Hence in order to mitigate the risk of predators adequate precaution should be take and timely use of
medicine and recommended chemicals are essential.
3. Credit Risk
Since the project promoters are young school leavers it is important to observe and monitor thee
financial management and take precaution for any possible eventuality happen due to financial
mismanagements.
Accordingly having a compulsory savings cash build up, observation for fund diversion from
business, ensure proper end use of funds, having adequate insurance for project premises covering all
possible risks are the things should be initiated to mitigate the credit risk.

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12.Conditions & Recommendations
As per the above analysis, the proposed project is a feasible andcould be implemented on a viable manner
with those young entrepreneurs who has identified as potential promoters to initiate the proposed ornamental
fish cultivation project in Kurunegala District. However based on the observation following condition
should be adhered prior to initiate the project with fiancé assistance of Serendib Development Bank.
 Training program to implemented
 equity contribution should exceed 15% and maximum loan quantum is Rs.500,000/-
 Tenor is 60 Months
 Interest rate is 15% with 50% interest subsidy
 Sales agreements to be executed with byers to ascertain the business continuity
 Monthly progress report to be summited to Serendib bank Plc
 All the necessary licenses and approvals to be obtained
 Business proceeds to be routed through Serendib bank Accounts
 premises ,machineries & equipments Insurance to be obtained and renewed on time
 2 personal guarantors to be obtained
 Application for interest subsidy to be send to CBSL as soon as the disbursement proceeds are done
 Separate Report to be sent to CBSL on the progress of the report
 Field visits to be made by Officers of Serendib bank Plc and observations to be recorded
 Monthly Cash buildup of Rs.5,000/- to be initiated to a Separate account and to be kept under lien
 Adequate security and precaution method should be adhered and all construction, and other project
works including breading, feeding maintains should be carried out to the acceptable standards.
 Promoter should ensure the ethical practices with regard to environment, labor, social etc. when
initiating the project.
By considering the foregoing facts and above analysis, the proposed project of Ornamental Fish Cultivation
could be considered as feasible and viable project to initiate. Also it is par with both bank policies and
government policies to encourage SMEs, Youth entrepreneurs export oriented ventures and 2018 budget has
major concessions for bank loan interest through NCRS scheme for ornamental fish cultivation which
encourage both lenders and potential entrepreneurs to enter in the said business. Also as per the Central
Bank Guide lines under Circular no 01 of 2017 it has been emphasize that “Credit granted by licensed
banks may not be less than the 5 per cent each for Youth and Women for credit needs” hence the
selected segment for the proposed project will also address the above requirement of the bank.
Total Investment for the proposed project will be 12.5 Mn which is 500,000/- loan facilityeach for 25 fish
farm across the Kurunegala District. Loans will be recovered within 5 years & 50% interest subsidy will be
received from CBSL according to the budget proposal 2018.
Selected 25 Candidates should adhere the conditions proposed along with the project proposal by the bank
and ensure the continuity of the project as well as the recovery of loans on time.

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The proposed project will enhance the living standards of selected young promoters and will be benefited for
their areas by creating employment opportunities, increasing living standards of their family members and
encourage more entrepreneurs for SMEs through this project.
As the conclusion I strongly recommend to consider the proposed project of Ornamental Fish cultivation in
favorable manner.
References
Central Bank of Sri Lanka Web Page - www.cbsl.gov.lk
Hatton National Bank Corporate Web Page - www.hnb.net
Research gate.com / publications
Ornametnak Fish industy by Thushini Ranasighne
NAQDA Website
Ocean Univercity Website
NARA Website
Ornamental Fish industry by Sri lanak Export Developmet Board
Export Oriented Fish Industry by P U I Perera