Sturgeon – Caviar Farm
Caviar – Live de Lux
The setting up in Romania of this livestock farm of sturgeons and caviar production requires an investment of 9.4 million Euros (funds expenditure to be spread over the first 3 years of the project). This amount represents three types of expenses:
A/. Constructions and materials for approximately 5 million Euros (mainly basins built for fry pre-growth and growth of female sturgeons local to harvest roe/eggs and for the production and packaging of caviar).
The investment has been divided into three phases according to the following model:
– Phase 1 (Year 1): Construction of the hatchery, pre-growth and growth unit,
– Phase 2 (Year 2): A pre-growth unit 2, and two growth units,
– Phase 3 (Year 3): second pre-growth unit 2 and the last unit growth.
B/. Sturgeon purchases for approximately 700,000 Euros, including juveniles but also mature sturgeons; these purchases will be needed only the first year of the project.
They will quickly launch caviar production knowing that the maturity cycle of sturgeon fry is 6 to 7 years before it produces caviar. Note: inclusion of mature sturgeons imported from our associate farm in France, to spend the final required year in natural spring mineral water (nutritional acclamation time period), during the initial phase year will facilitate the first harvest within the first 2 years, rather than the normal 6 to 7 years.
C/. Financing the operation (need in funds) for the first two financial years to about 3.7 million Euros.
Total capital investment required: 9.4 million Euros, this represents thirty percent (30 %) ownership of the company; the investor will receive full Return on Investment within three years (approximately) and continued ownership of the issued investment percentage.
After the first stage of setting up and launch which will take about 3 years, operation will enter a cruising speed of which the main elements are:
– An annual output of over 10 metric tons of caviar sold at an average price of 850 Euros per kg,
– A team of 15 to 17 people including manager(s) & technician(s) in order to breed sturgeon, harvest eggs, produce, package, and sell & distribute caviar,
– A production cost of a kilogram of caviar about 500 Euros,
– Total production cost (including amortization) of 5 million Euros,
– A turnover of 8.5 million Euros.
– The company currently owns the designated real estate land 5 hectare (5 Hectare = 12.355 acre), mineral rights and rights to the natural mineral water source.
Profitability per year of this project is about 37% of invested capital
(financial return = ratio between result and capital invested on the launch phase + need in funds
This project, in addition to a healthy return on capital invested, has many other strengths, the main points are:
– The caviar market is in full recovery and highly potential per year
Due to the decline in the production of caviar, itself a consequence of the ban on fishing of wild sturgeon, the production has decreased significantly from 5,000 metric tons in the 1970s to less than 1,000 metric tons per year in the 1990s.
In recent years the consumption restarts mainly due to a strong mastery of technical sturgeon farming, only method allowed to make caviar. In a growth market, the 10 metric tons annually of caviar from the farm in Romania will have no problem to be sold. The demand exists; the supply was blocked/restricted due to the ban on wild caught sturgeon, hence the need for farm sturgeon.
The average selling price is estimated at 850 Euros per kilo of caviar, which is a very realistic price compared to the prices that are found in the market today, (more than 1,000 to 1,200 Euros per kg on average).
– The caviar market is of international dimension
The target market(s) for caviar produced in Romania are global and all regions of the world are potential areas of marketing and selling; specifically, the ultra-wealthy Sheikhdoms of the Persian Gulf & the Kingdom of Saudi Arabia which is in close proximity to the Romanian farm. Also, new to global trade activities are the entrepreneurs in China/Asia; an estimated 50 million strong affluent young consumers are in these markets. This enables:
Offsetting any sales activity declines on a per regional basis with a probable marketing & sales growth in other areas;
Minimize risk of exchange of currencies;
•Future global growth area;
The caviar business is regarded as recession proof. The rich are not affected in economic down-turns.
– The marketing efforts are made relatively large
Every year, from the start of the company, several hundred thousand Euros will be spent on marketing which are mandatory to make known that Romanian caviar and its farm production process combined are resolutely registered as a rare & expensive luxury product/process.
This is an important step because it will determine the commercialization of the production. The sales strategy adopted here, corresponds to a luxury product, rare and expensive. Therefore, important efforts have to be made on communication over the “quality and the excellence of this product”. Marketing costs are also significant because they are a key element to increase the value of the caviar produced.
This marketing efforts aim is to enable an increase in prices. Today the price of 850 Euros per kg is a price average range. With targeted marketing efforts, high quality sales price exceeding 1,000 Euros per kg will be possible.
– The payroll has been over valuated in the business plan
Most likely, personnel expenses will be lower than those estimated in the business plan because many technicians will not be full-time reality.
Indeed, some activities on the farm (including harvest and caviar production) will be seasonal and will not require full-time staff (sometimes a half staff will be enough).
– The technology used is environmentally friendly
Another advantage of this type of breeding system: it is independent of the environment in which the production farm is located, it is a green technology.
Note: the natural mineral water quality in Romania has been determined to be of the finest/highest quality required as a mineral source for sturgeons’ nutrition & growth and acclamation in aquaculture applications.
The nitrate discards are also recovered and valued through a bioremediation system of nitrates, at the farm gate.
– This project has experts in sturgeon breeding and Franco – Romanian cooperation.
This project is based on the experience acquired from the main caviar producing countries such as Italy, Germany & France.
This strategy is based on the French know-how and its long historical tradition of aquaculture (Ifremer); especially for sturgeon farming, where France has been a pioneer for more than 30 years. France is also a world leader for breeding /recycling soil-free system. That is why this technology has been chosen for the
sturgeon farm project. Partners such as Coldep, which is an innovative company, are also associated to the project. This partnership is strategic for the farm, because Coldep technologies are allowing significant energy savings during the production process.
Moreover, France has extensive experience in the field of marketing. It has always positioned itself as a high-end country (“French art de vivre”), and it is known for its expertise on luxury brands such as LVMH, CHANNEL, & YVES SAINT LAURENT; and for the production of flagship products such as CHAMPAGNE AND CAVIAR. So, this project is learning from the French experience to establish the bestselling strategy for the caviar produced.
– Optimization opportunities for R&D
It is possible to further optimize the project, for example, by diversifying the production; that is to say, by breeding other species of sturgeon such as Beluga also known as Huso Huso; Ossetra (also Oscietra, Osetra, or Asetra) https://en.wikipedia.org/wiki/Caviar, known for their high quality caviar. This diversification will allow the farm to have a wide range of target audiences according to taste. Investing in innovative zoological techniques’ such as caesarean section on females is also a clever way to optimize the project.
– This project will benefit from substantial EU subsidies
In France, this type of project involving the development of aquaculture, green technologies, R & D and international cooperation, benefits from various European aid through the EAFRD, ERDF and EMFF (European Agricultural Fund for Rural Development, European Regional Development Fund, European Maritime and Fisheries Fund, respectfully) up to 50% of investments (materials, equipment and studies). For this project in Romania, this type of assistance will be sought and be obtained due to Romania’s recent acceptance into the European Union. Indeed, Romania has ideal climate, perfect mineral water and superior land quality for this type of aquaculture.
Also the country needs to develop quickly, once again because it has recently joined the European Union. This project is not only targeting the EU market, but truly the entire global market(s), the company has the ambition to create a farming system that will become a market leader worldwide. As mentioned in the introduction, caviar is a luxury product, rare and expensive. This type of product is thus perfect to attract clients from all countries. There will always be caviar lovers!
Given the financial profitability and many other highlights, the project of a sturgeon breeding farm in Romania is a great opportunity.
While creating added value, this project can also benefit from very good public image with regards to the environment at the local level, in a country which is pro-development. It is foremost consciously a very high-tech eco-friendly project with a very low impact on the environment utilizing superior raw materials, i.e., the natural mineral water. These elements should be the core components of the marketing campaign.
As a country of great agricultural tradition, Romania is producing large volume of agricultural by products (such as wheat or gluten), that is to say cheap basic food resources. Wood culture is also important, due to the large forests of Transylvania; this resource is a low-cost complement for Romanian agricultural market. This project has chosen an optimal strategy in order to become an ultra-competitive player in the caviar premium and luxury markets.
Therefore, in conclusion we believe that with the current global economic situation as it exist today, it stands to reason that targeting the new affluent global population of technologically savvy, eco-minded & health conscience individuals, the company is in a substantially positive position to lead the industry into the future.
Please find our graphic presentation currently in production at our associated facility in France as follows:
Thank you for your kind attention.