Title: Feasibility study for mass production of the Silver kob, Argyrosomus inodorus, in Namibia

Author(s): Martin Tjipute
Final project
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The Silver Kob, Argyrosomus inodorus, belongs to the Sciaenidae family, which forms one of the largest perciform families and has attributes like fast growth that indicate its suitability for aquaculture. This feasibility study is aimed at determining the economic viability of silver kob aquaculture in Namibia. A production model for the species was developed. To evaluate the profitability of the envisaged farm, indicators of investment returns were determined such as net present value (NPV), internal rate of return (IRR), payback period and debt service coverage ratio. A sensitivity analysis on cost of feed, investment cost, sales price and sales quantity was also conducted. The findings of the analysis indicated that silver kob farming is financially feasible. The results obtained indicated a positive IRR of 13% on total capital and 30% on equity on discounting rates for total capital and equity of 10% and 15%, respectively. NPV on total is N$11 million (discounting rate 10%) and N$14 on equity (discounting rate 15%). A debt service coverage ratio with payment over 7 years at 10 year planning period was feasible. The cash flow was adequate. A sensitivity analysis on price, sales and investment obtained was performed. An improved FCR could dramatically reduce variable costs. It was established that it is more economical to operate a mass production unit (> 150 MT/year) due to gains from economies of scale.

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