Aqua-Spark plans investment in Africa’s catfish producers
Aquaculture investment fund Aqua-Spark has announced plans to invest in catfish-producing companies in sub-Saharan-African markets as part of its strategy to support the growth of the region’s aquaculture industry.
In a statement Aqua-Spark said it is seeking to invest in large-scale producers that could become platforms for growth for the broader aquaculture industry through local outgrower programs.
“Both in Nigeria as well as in other countries such as Ghana, we’re already on the lookout for catfish producers that can take on this role and need investment to grow,” the Netherlands-based Aqua-Spark said.
Aqua-Spark said it is seeking large aquaculture producers that have the capacity to supply initial resources to small- and medium-sized entrepreneurial aquaculture farms, and then to buy back what those farms produce. That, according to Aqua-Spark, would support “successful growth of the fish, but also the processing into value-added products and the development of a larger market for the catfish products.”
“We hope that these companies become vertically integrated production hubs to provide smaller farmers with access to inputs, knowledge, and markets, and maybe even facilitate financing,” Aqua-Spark said.
Aqua-Spark said for catfish production to grow in sub-Saharan Africa, there needs to be more effort to encourage “consumer acceptance” of catfish as a source of protein.
“The absorption capacity of an increase in catfish production will depend on the extent to which consumers are ready to accept the species as a healthy and tasty source of protein that can compete with tilapia, chicken, and other protein sources,” Aqua-Spark said.
The fund said catfish farming is ideal for sub-Saharan Africa because “the fish easily survives in all kinds of production systems and can be cultivated in low-density, simple earthen ponds, in higher-density concrete or plastic tanks, or in even more intensive recirculating aquaculture systems.”
Furthermore, catfish, unlike tilapia, “is often consumed as a smoked fish means that also in the downstream supply chain, the catfish industry offers job opportunities in the processing segment.”
Diverse catfish production systems such as peri-urban concrete tanks, raceways, and RAS, are suitable in any part of a country like Nigeria and “could become a major part of the solution to meeting the future demand for fish from the growing urban population.”
“With Africa’s rapid population growth and urbanization rate in mind, farming catfish in peri-urban environments is a great opportunity,” Aqua-Spark said.
Nigeria, Ghana, and Uganda are leading the way in expanding commercial catfish production in sub-Saharan Africa, with Nigeria currently the continent’s largest producer. But Nigeria has realized a decline in catfish output since 2010.
“The current economic and security situations in Nigeria are also unfavorable for the aquaculture industry – the situation in war-torn areas of the country in particular necessitates heavy security for people to be willing to work, and even then many are unable to, creating an economic bottleneck and bringing society to a standstill,” Aqua-Spark says.
Coupled with the unrest, a spike in feed prices with little to no increase in the price of the final product meant lower profit-margins for farmers.
“So, if the government manages to improve the economic, security, and COVID-19 situations, the industry will be set to enter the next phase of growth,” Aqua-Spark said.
In Uganda, catfish production increased significantly from the early 2000s until 2010, with the Food and Agriculture Organization estimating the output at 35,000 metric tons (MT).
However, Aqua-Spark said the FAO estimates for Uganda could be higher.
“Nevertheless, even though this insider estimate is probably right, there are many reports about hatcheries and farms in Eastern Africa, and also in Ghana and Congo, targeting catfish production. We believe that it’s only a matter of time before a broader catfish industry will be developed in those countries where consumer acceptance is realistic,” Aqua-Spark predicts.
For Ghana, catfish production has been off to a slow start, despite the country playing host to “some of sub-Saharan Africa’s largest tilapia producers.” Ghana's leading catfish producers include Cluster Farming and Wontesey Ventures, companies that are taking advantage of an existing market for catfish in Ghana.
Cluster Farming is spearheading a campaign in Ghana to increase the popularity of catfish in forms other than smoked through intensified marketing efforts telling customers that “you can do so much more with catfish than just smoke it.”
Cluster, which produces an estimated 1.5 million fingerlings and just over 100 MT of harvest-size fish every year, operates an outgrower program providing farmers with support to develop small- to medium-scale catfish farms.
The catfish producer aims to develop its business so its satellite farms and own farm hit the milestone of 1,600 MT of catfish production annually. The company also provides farmers with the required inputs, technical assistance, and financial support to successfully farm catfish, and buys back the fish the farmers produce.
“It’s exactly this kind of company that can become a platform for growth and can spark the development of broader smallholder inclusive aquaculture industries,” Aqua-Spark said. “The company aims to process most of the fish whole round and freeze it, thereby making it more feasible to target export markets and to only sell the fish when there’s actual demand and reasonable prices.”
Aqua-Spark foresees the potential for catfish production to become an engine for the growth of sub-Saharan Africa’s aquaculture industry.
“If consumer acceptance is there, contrary to tilapia that we think will – in the short-term –mainly be produced in cages and ponds, we expect catfish production to already have significant potential relatively soon in and around cities where farmers can grow the fish in tanks and RAS.”
Photo courtesy of Aqua-Spark