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Business Plan for Pond Culture of Anguilla rostrata

Updated on March 6, 2013

Statement of Purpose:

To grow a safe, sustainable, superior quality, competitively priced Anguilla rostrata (American Eel) product for the high-end niche seafood markets of Europe, Asia, and some of North America. There have been and continue to be repeated instances of seafood products imported from China harboring undesirable levels of contaminants, and as China is currently the top supplier of eels to the U.S. and other countries, this quality gap provides a market opportunity. Excess or lower end product can be sold to the bait industry as well. Eels will be grown in ideal conditions to ensure the product is of the highest quality available while maintaining low expenses through sophisticated outdoor pond culture techniques. Juveniles (glass eels/elvers) will be harvested from the wild, grown for a bit initially indoors, then transferred and grown to market size in outdoor pond systems. Since juveniles are harvested from the wild and grown in ponds where they are more protected from predation, higher juvenile survival can be expected than if left to fend for themselves in the wild, thus a higher yield may be expected in comparison to wild fisheries that target adult individuals, or it is at a minimum a more sustainable practice than wild fisheries.

Description:

There has yet to be consistent success spawning American Eels in captivity and thus glass eels must be harvested from the wild in order to stock the systems. Since this species is found along the U.S. Atlantic coast, multiple local fisheries could possibly provide bulk juveniles at a low price since shipping costs due to distance and the U.S. demand for eels are minimal. If this is not the case, juveniles will be harvested manually by our staff. Juveniles will first be placed in small (~3-4m²), clear tanks at a density of about 10-15kg/m² for the purpose of easy viewing without crowding during quarantining. They will be held at this stage for a minimum time interval of three weeks (this is based on the life cycle of common diseases affecting A. rostrata). Starting during this time they will be slowly weaned onto a non-live diet and then to an artificial diet. Initially, in order to induce a natural feeding response, small live foods such as tubifex worms, blood worms, other insect larvae, and microcrustaceans will be offered. As growth and time progress, the diet can be altered from live foods to consist of larger dead but fresh foods such as cod roe, bits of beef liver, minced clam, or minced fish. Once eels reach about 5g each they are transferred to larger (~6-8m²) tanks with a stocking density of about 50-75kg/m² for early grow-out. At this time they are introduced, slowly, through providing mixed feeds and gradually reducing the amount of natural feed present, to a more inexpensive prepared food containing a high protein content for proper development. Ratios of natural to prepared foods should begin very high, and as the eels begin to consume the prepared foods we will reduce the amount of live food fed every few days so as not to induce dietary stress. The mixing of feeds will facilitate initial acceptance of the new diet since eels forage primarily with the use of olfactory senses, so the prepared foods will smell similar to the foods they are acclimated to already. The use of prepared feeds is preferred as they are significantly less expensive, both to buy and to store, and they can be stored for longer periods of time without spoiling. Prepared foods also help to ensure adequate nutrition is received.

Eventually, when eels are large enough to avoid most predation and to be transported with few mortalities, they will be transferred and grown out in ponds. Ponds will be large with somewhat low stocking densities as we are concerned with the quality of the product and the conditions it is raised in more so than the quantity of the product (discussed further in marketing). Pond culture of American eels offers many benefits over alternate intensive indoor operations. For one, operational costs are significantly reduced. Electricity is needed minimally, mostly only for aeration purposes, the drain pump, and in this case, for housing juveniles and holding feed prior to pond culture. Growing out in ponds also contributes positively to the nutrition of the eels and somewhat reduces feed costs. The microfauna and microflora naturally present in outdoor ponds fuel a dynamic food web that allows eels to practice natural foraging behavior and receive nutrients and trace minerals that may be absent in a prepared diet. Creating a pond system as opposed to an indoor facility also reduces initial construction costs.

In order to reduce losses associated with predation, ponds could be covered with retractable rope netting and have a steep, incline-free shorelines to deter predators from wading in on the sides. Since overcrowding is sometimes an issue and can result in reduced maximum growth, the netting may be an unnecessary expense. It will only be employed in the extreme circumstance of significant losses due to predation. The pond will be installed levee-style with a relatively uniform depth to facilitate easy management and harvesting. It will contain a drain large enough to evacuate the water from the pond in a reasonable timeframe, with a mesh covering that would prevent small eels from being sucked into it during draining. Ponds will be separated by about 45m of dry land both from each other and from the quarantine/juvenile rearing facility. This is to prevent aerosols (from the paddle-wheel aeration, animals, and from moving equipment) from spreading pathogens and to allow for safe movement of trucks and equipment between sites.

American eels are found in a wide range of habitats naturally and are relatively tolerant to a range of water conditions. Water will be diverted from a local stream – water conditions will be approximately as follows:

Salinity: 0-4ppt

Temperature: 18-24°C (ambient)

Dissolved oxygen: minimum 8.6 – 12mg/L

pH :6.8 – 7.2

Total ammonia-nitrogen: <0.01mg/L

Alkalinity: 20 – 300ppm, maintained with sodium bicarbonate as needed

Hardness: 100 – 250mg/L

Chlorine: <0.01mg/L

Market:

The market will consist mainly of the high-end foreign food industry, both wholesalers and restaurants, especially in Europe and Asia. Areas of high demand include Belgium, Hong Kong, South Korea, and Japan. The largest single market is maintained by the Japanese “kabayaki” market. This involves a specific preparation of marinated and grilled freshwater eel (often called “unagi”), a popular and expensive delicacy in Japan. The eels sold to this market are generally preferred to be around 0.20kg. Glass eels are consumed in Italy, France, and Spain as well, so a market may exist there as well if our purchase/harvest prices are reasonable enough to re-sell. Some of North America consumes eel as well, but the majority of sales will likely be exports. Excess and lower-end product can be sold to the U.S. bait industry as bait for crabs and game fish such as Morone saxatilis (striped bass), Rachycentron canadum (cobia), and Micropterus salmoides (largemouth bass). Certain individuals of superior quality or that have unique, unusual phenotypes could be sold to the ornamental industry as well. Large, predatory fish are often quite popular with aquarists if they can be purchased at a relatively small size.

Marketing:

Our product will appeal specifically to our high-end audience for a number of reasons. It will be of superior quality due to the conditions the eels are provided with: high quality live and frozen natural foods during critical development stages, high quality prepared feeds during grow-out in addition to the ability to constantly graze on organisms in the pond, consistently high water quality, stocking densities sparse enough that they do not induce developmental issues, and the lack of the use of hormones or medications. Sick and deformed organisms will be culled before reaching the market. The marketing activities associated with high-end markets will be dissociated from those targeting the bait and ornamental industries to ensure the customers view the product as high quality, not bait-grade. The marketing plan will attempt not only to bring awareness of the product, but to create/expand the U.S. market through the food industry. Activities will include a consistently maintained and updated multi-lingual website that includes minimally a product description, facility description, comparative nutritional benefits of eel, delicious recipes from many cultures, photographs (of the facility, the organisms, and of food dishes), and contact information. Other marketing strategies that will be employed are free tours of the facility, participation in seafood festivals and aquaculture festivals, and aquaculture and food magazine advertisements.

Eels will be sold mostly live, as the market demands this, but also dead upon request. Dead eels should be transported on ice, not frozen to preserve freshness, taste, and retain the highest nutrition possible. Exceptions to this may be made upon customer request, but frozen product will not be specifically advertised. Live eels will be transported in moist containers as opposed to in water because survival rates have been shown to be higher with air transportation. American Eels have the ability to absorb oxygen through their skin and to breathe atmospheric air, and have been known to survive in low oxygen conditions and even out of water for short periods in the wild. Thus, they can be safely and even more efficiently transported in these conditions. Shipping and packaging costs are also reduced as a result of the lesser weight when excluding water.

Competition:

In the U.S., very few other A. rostrata aquaculture operations exist, as is the case with A. anguilla (European Eel), and A. japonica (Japanese Eel), the other primary constituents of the market demand. China is currently the largest producer of eels, likely due to cheap labor costs and lax regulatory control on both fisheries and aquaculture operations. Despite this, consistent reports of Chinese seafood products claim the undesirable presence of antibiotics and other contaminants, leaving a quality gap in the market that needs to be filled. Though it is unlikely that we will reach higher production levels than China currently reaches, we can produce a higher-quality and safer eel, which speaks directly to our high-end food market. Japan also produces competitively large quantities of eels but they continue to be the largest importer of them nonetheless.

Significant competition may also come from the fishing industry. The stocks of eels are quickly dwindling in the East though, which has subsequently increased demand. While at a slower rate, stocks nearer to the U.S. are decreasing as well. This may result in increased regulation of the eel fisheries, which would reduce competition from the fishing industry, but affect us in the same manner if we expect to continue to purchase or harvest wild juveniles. Further research into developing methods for spawning A. rostrata in captivity must be conducted in order for aquaculture of this species to continue to be a sustainable practice.

The presence of other, cheaper food fish also presents competition. Our prices should be relatively low as our production methods are efficient, but having a dedicated marketing team to spread word of our product will be a humungous advantage. Our marketers could alleviate some of this competition by promoting the superior nutritional benefits of eels and offering tasteful, simple recipes, and thus imprinting the idea that eel could be a beneficial staple food.

Operations:

Life Cycle

The American eel is catadromous, spending most of its life in rivers, lakes, and estuaries but returning to the Sargasso Sea to spawn. Though spawning has never been directly observed, it is presumed to occur in February and may continue through April. A. rostrata are oviparous, producing between 0.5 to four million eggs at a time, with larger individuals generally being more fecund. It is assumed that eels die after spawning. The larval stage, often referred to as a leptocephalus, can last up to a year. The larvae are transported by currents towards the eastern U.S. seaboard. During this time they grow relatively rapidly until in about 8-12 months they have reached between 40-70mm and begin to metamorphose into glass eels. This transformation begins with a reduction in body water content and a subsequent reduction in both length and weight. Also, the digestive system starts to develop faster, the configuration of the head and jaws changes, and the fish gain active mobility. During this stage, usually in late winter or early spring, they migrate towards land to get closer to freshwater, developing external pigmentation as they travel. These pigmented juveniles are often called “elvers”. Their migration slows down a bit as they transfer from saltwater to freshwater in order to adjust properly. Once the adjustment is complete, the eels are fully pigmented (appearing yellow-greenish), and they have reached freshwater (or brackish) they are deemed “yellow eels”. As these yellow eels grow and metamorphose into their adult form, they undergo a few final changes. Their body color changes from yellow-green to a metallic, bronze-black sheen and their pectoral fins turn black. Their body fat content increases, the digestive tract degenerates, the skin thickens, the eyes become larger and more adapted for deep-water vision, and the capillary length in the swim bladder increases (likely to provide more surface area to more quickly and less energetically promote gas exchange for buoyancy regulation). After this transition, the eels are considered mature and are called “silver eels”. These will then return to the Sargasso Sea to spawn and continue the cycle.

Feeding

Since the eels develop and grow fastest during their juvenile phases, proper nutrition is critical during these times. For this reason young eels (during quarantine and early grow-out phases) will be fed high-quality, high-protein, natural feeds often. Food will be provided as eaten between 3-8 times per day. It is important to offer multiple small feedings throughout the day as opposed to fewer larger feedings because more nutrition is extracted from the feeds this way, offering a higher feed conversion ratio. Large feedings result in high amounts of waste and a subsequent reduction in water quality and an increase in costs (water, feed, labor, etc.). This feeding regime also allows for more consistent, regulated growth. Small individuals will receive a rotating diet (based on market prices and size of eels) of tubifex worms, blood worms, Artemia, ground beef liver, fish roe, minced fish, and minced clam. As the eels grow larger and development/growth slow down, high-quality, high-protein (46-65%), prepared foods will be introduced into the feeding regime as they are comparatively inexpensive and supplemental nutrition will be present anyway when they fish are moved to the ponds. It is also important that the eels accept prepared foods prior to being transferred to the ponds so that they do not depend on the inadequate food sources present in the pond, as there will not be enough biomass to support their dietary needs. During this transition to prepared foods, feeding instance should reduce to 2-4 times per day, and gradually, by the time the eels are in the ponds, feedings can be conducted only once per day (usually in the morning). When feeding natural feeds, glass eels and elvers should receive about 20-30% of their total body weight in feed per day. Adults should only be fed about 10% of their total body weight when using natural feeds. When using prepared feeds, glass eels and elvers should receive about 6-8% of total body weight, while adults should receive 2-3%.

Filtration

Since the operation is outdoors and the presence of particulate matter is unavoidable, mechanical filtration is mostly unnecessary. A mesh grid (~2x2cm) at the entrance to the inflow would be beneficial in order to prevent clogging inside of the piping where it would be harder to deal with. If large objects (branches, vegetation, rocks, etc.) can be pulled off of the grate at the inflow, this is much easier to do than trying to clean the internal piping. This grate also promotes aeration and increases dissolved oxygen content.

Biological filtration will be carried out by the nitrifying bacteria naturally found in ponds and further aided by the presence of natural vegetation. Due to the relatively low stocking densities, additional biological filtration will not be provided as it would be an unnecessary expense.

Young indoor organisms will be held in a flow-through system that uses the same water source so that acclimation from tank to pond does not induce high levels of stress. The water will flow directly to this system, it will not be run through the ponds first as that could introduce outdoor pathogens. A small mesh bag filter will be used on this system to ensure that debris that fit through the inflow grate do not clog the system components.

Aeration

To prevent the formation of anoxic zones and achieve optimum growth rates, supplemental oxygen will be provided to the pond through paddle-wheel aeration. This method was chosen because of its cost-efficiency and because paddle-wheels generate current, which reduces the possibility of dead zones by aerating and moving this newly oxygenated water. It also promotes eel movement, which is beneficial to development. The paddle-wheels will be placed strategically throughout the length of the pond but towards the center. This is so that the entire pond receives oxygen and water flow while reducing the movement of aerosols between ponds.

Harvesting

Harvest time will vary depending on the desired market size, which can range from 0.15kg to 5kg, though usually about a 0.20kg individual is appropriate for the Japanese market. The night before the harvest the water level will be lowered about 50%. Harvesting will be done in the early morning through draining the entirety of the pond while holding open a net in front of the drain to catch the incoming eels. This method is beneficial for a number of reasons. For one, it maximizes yield by allowing for harvesting of the entire stock, and since eels do not spawn in the culture environment, there is no need to keep any individuals in the pond and risk mortalities before next season (due to predation, weather, disease, etc.). Draining the pond also rids it of water-borne pathogens and aquatic intermediate hosts, which may reduce the prevalence of disease.

Biosecurity

· Stress importance of prevention over treatment

· Standard operating procedures will be followed strictly and taught to all employees upon hiring

· Visitors must follow these same procedures

· Limit access to facility by employees and visitors (who can come in, when they can come in, where they can go)

· Different workers for each pond/room

· Different equipment for each pond/room

· Sanitation of equipment after each use, including sanitation of vehicles after transporting organisms to ponds or to market

· Washing of hands upon entering and exiting any sector

· Foot mats

· Quarantine new arrivals for about 3 weeks, no new introductions to a pond after initial stocking

· Age separation of organisms (older organisms tend to be carriers, while younger ones tend to be more susceptible)

· Depending on presence of contaminants, may use UV on our water source

· No eels from other farms

· Store feed in cold, dry, clean refrigerator with the temperature monitored

· Use disposable gloves when handling feed

· Use a small amount of salt in the water

· Medications of any sort avoided at all costs as this jeopardizes the quality and image of our product

· Handle the highest health status animals first

· Have a veterinarian examine deceased animals


Personnel:

All of the previously mentioned employees will be full-time with the exception of harvesters, which will be hired part-time based on seasonal needs, and the website designer, which will be employed full-time initially and then part-time once the website has been created. The initial construction of the facility will require a full-time construction crew, an aquaculture engineer, and HACCP certified personnel to assist in the design of the facility.

Pond specialists, aquaculture technicians, and maintenance will be on call in case of an emergency (equipment failure, accidental drainage, broken tanks, etc.). Depending on the local community, a security team may also be necessary to patrol the facility at night and prevent damages and theft. Temporary chefs and a photographer will need to be hired during initial construction of the website as well. A veterinarian will be hired as needed.

Development Schedule:

Year One – Starting out

Month 1 – Hire construction crew and aquaculture engineer, begin construction of ponds and indoor facilities. Redirect local stream water towards facility, install flow adjustment valves. Hire pond manager and indoor manager part-time to assist in consulting for the design of the facility, as they know what will work best for them. Hire HACCP certification officer to assist with design and implication of biosecurity measures.

Month 2 – Hire indoor manager, aquaculture technicians, and maintenance staff full-time. Fill ponds with water, monitor water quality daily. Catch (or purchase, if prices are reasonable enough to justify not harvesting ourselves) and quarantine a small initial stock of juvenile eels for about three weeks, then transfer eels to larger tanks for first attempt at early grow-out. Be sure to monitor for presence of pathogens, record growth rates, feeding rates, behavioral observations, and health and water quality information for improving future efficiency.

Months 3-12 – Hire pond manager and pond specialists. Transfer eels to ponds at an average individual weight of about 5g. Continue keeping records, being sure to note areas needing improvement (inefficient equipment, refusal of feeds, cannibalism, disease, insufficient space, not enough workers, etc.)

Year Two – Refining and Marketing

Month 1 – Bring in second stock of juvenile eels for quarantine, transfer to larger tanks for grow-out. Review results of previous protocols and strategies for eel culture and adjust areas in need of improvement.

Month 2 – Hire marketing manager, graphic designer, website designer, and copywriter to begin developing marketing strategies. Begin construction of website, hire part-time chefs from various backgrounds to create recipes and a photographer to get pictures of food dishes and the facility/workers. Generate an honest mission statement for the website that includes contributing positively to the community and furthering scientific knowledge.

Months 3-12 – Transfer second stock of eels to second pond. Begin employment of marketing strategies and finalize website to ensure awareness of product prior to the first harvest in year three. Find buyers and make sales agreements.

Year Three – Harvest and Sales

Hire part-time harvesters. Depending on market demand (size and season), eels from the first stock will be harvested sometime within the third year. The harvested pond will be allowed to lay fallow for about a month or as long as needed to dry out and remove any possible aquatic sources of pathogens.

Month 1 – Bring in third stock of juvenile eels for quarantine, then transfer to larger tanks for early grow-out. Continue to make improvements to culture methods.

Month 2 – Transfer eels to third pond.

Months 3 and on – Research and review the efficiency of marketing strategies, making adjustments as needed. Continue normal operations.

References:

"Appendix 1PRACTICAL EEL CULTURE TECHNIQUES." EEL CULTURE IN GREECE. Food and Agriculture Organization of the United Nations, 1987. Web. 17 Dec. 2012. <http://www.fao.org/docrep/field/003/S5407E/S5407E05.htm>.

Burden, Dan. "American Eel - Agricultural Marketing Resource Center." American Eel - Agricultural Marketing Resource Center. Agricultural Marketing Resource Center, Apr. 2012. Web.

Facey, Douglas E., and Michael J. Avyle. "Species Profiles: Life Histories and Environmental Requirements of Coastal Fishes and Invertebrates (North Atlantic) AMERICAN EEL." U.S. Fish and Wildlife Service, Aug. 1987. Web. <http://www.nwrc.usgs.gov/wdb/pub/species_profiles/82_11-074.pdf>.

"FAO Fisheries & Aquaculture Anguilla Anguilla." FAO Fisheries & Aquaculture Anguilla Anguilla. Food and Agriculture Organization of the United Nations, 1 Jan. 2004. Web. <http://www.fao.org/fishery/culturedspecies/Anguilla_anguilla/en>.

Freyhof, J., and M. Kottelat. "Anguilla Anguilla." (European Eel). IUCN Red List, 2012. Web. <http://www.iucnredlist.org/details/60344/0>.

"Marketing of Eels." Queensland Government. N.p., 23 Nov. 2012. Web. <http://www.business.qld.gov.au/industry/fisheries/aquaculture/aquaculture-species/shortfin-longfin-aquaculture/marketing-eels>.

Nair, R. V. "ON THE EXPORT POTENTIAL OF ELVERS AND CULTURED EELS FROM INDIA." (n.d.): n. pag. Central Marine Fisheries Research Institute. Web.

"U.S. Fish and Wildlife Service - Northeast Region Newsroom." U.S. Fish and Wildlife Service - Northeast Region Newsroom. U.S. Fish and Wildlife Service, 20 Oct. 2009. Web. <http://www.fws.gov/northeast/newsroom/facts.html>.

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