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Econometric model of viability/profitability of ongrowing sharp snout sea bream (Diplodus puntazzo) in sea cages
García, G.J.; García, B. (2010). Econometric model of viability/profitability of ongrowing sharp snout sea bream (Diplodus puntazzo) in sea cages. Aquacult. Int. 18(5): 955-971.
In: Aquaculture International. Springer: London. ISSN 0967-6120, more
Peer reviewed article  

Available in  Authors 

    Diplodus puntazzo (Walbaum, 1792) [WoRMS]; Marine
Author keywords
    Diplodus puntazzo; Sea cages; Costs; Econometric; Break even point

Authors  Top 
  • García, G.J.
  • García, B.

    We have designed and evaluated an ongrowing plant in sea cages as representative of Spanish Mediterranean exploitations with an annual production of 1,000 tonnes, based on the technology already in use for Sparus aurata ongrowing but taking into consideration the zootechnical variables for this species. We used the cost analysis and once defined the accounting structure, and we have used mathematical modelling or econometric to establish indicators of viability/profitability (NPV/IRR) based on the variables chosen for their economic importance in the sensitivity analysis. The highest costs and therefore of greatest economic importance are feed (43.85%) and juveniles (25.04%). The costs analysis points to a profitable business activity, but with a relatively low profitability (benefit/total cost = 7.26%) although benefit/investment is slightly better (15.29%). The break even point suggests that the business will only be viable above a selling price of € 3.69/kg and a production minimum of 709,363 kg/year. The feeding price threshold indicates that the activity is viable up to a cost of € 1.85/kg, which is within the range of sensitivity, while the cost of juvenile threshold (€ 1.17/kg) is much above this range. This underlines the great sensitivity of the activity to feeding costs, although the cost of the juveniles is not so important in this respect. When significant production levels have been reached, it is feasible that the cost of feeding will decrease since the species uses protein of vegetal origin efficiently, especially soy flour. If the minimum selling price is fixed at € 4.21/kg, the cost of feed is 11% lower and the IRR will reach 13.12%, which is an attractive alternative for investors. The econometric model is therefore a very useful tool for evaluating the viability or profitability of new species.

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