Table : Aquaculture Enterprises per province, 2008

From the above table it can be seen that the Eastern Cape contributes the most to the marine sector production and very minimally to that of the freshwater sector, where only 8.6% of the value of production was generated for marine fish and 3.7% to freshwater species (table 3).

 

 

The total production size and value of the South Africa marine and freshwater aquaculture sub-sectors in 2008 was 3, 664 tons, representing a product farm value of R327 million. The production volume increased at an average rate of 7.8% between 2005 and 2008, and total rand value at an average annual rate of 32% over the same period.

Table 4 and 5 below outline the total size of value of production from 2005 to 2008, showing a relatively steady growth within the freshwater sector (around 1000 tons), while the marine sector experienced modest growth during this period.

 

 

 

Abalone production dominates the value of production within South Africa, where in 2008 the value amounted to R268 million, generating over 80% of the total rand value of the aquaculture sector. The second largest contributor is that of trout production at R28 million, which compared to abalone is drastically smaller, representing 8.5% of the total. Koi and ornamental fish generated R11.5 million; oysters at R8.5 million and mussels at R6 million.

 

The Eastern Cape Province is the second largest contributor, where predominantly marine farms accounted for 18% of the total production representing 7% of the value of South African output in 2008. There are several aquaculture farms located in the CDM, in areas such as Port Alfred, Graaf-Reinett and Grahamstown.

 

The South African export market is mostly attributed to abalone production, where in 2008 the export of aquaculture was made up almost entirely of abalone, representing 24% of the total tonnage and 82% of the total value of South African aquaculture production. The provincial profile of marine and freshwater exports is presented in Table 6 below.

 

 

In 2008 the aquaculture products that were sold on the domestic market amounted to 2,711 tons which was valued at R58.7 million. Provincially, the Western Cape Province was the leading producer with 1395 tons worth R271 million, followed by the Eastern Cape with 593 tons of product worth R24 million.

 

The Eastern Cape and CDM has a well established and growing fishery sector, and is currently a net exporter of fishery products. However, most CDM fisheries are considered to be maximally utilised and high value product fisheries such as abalone, prawns and linefish are over-exploited. The projected increase in demand for high end fish products provides opportunity for substantial increases in marine aquaculture production. Domestic demand can also be met by imports; therefore the projected increase in demand simply and only provides an opportunity for the marine aquaculture sub-sector, if it is competitive. Furthermore, most ornamental fish sold in the province are imported, representing a further opportunity to produce them locally to reduce imports.

 

The Eastern Cape Province has the second longest accessible coastline, about 38% of which was deemed to have potential for marine aquaculture development. The major areas that are suitable for development are around East London and Port Elizabeth (Industrial Development Zones). Within the Cacadu District Municipality the ability to practice aquaculture is accessible within any of the areas, provided the correct infrastructure is available. However it should be noted that marine and freshwater aquaculture activities require different areas and arrangements that will be suited to adequately cater for their species.

Abalone Farmers Association of South Africa (AFASA) has the capacity to organize collaborative research.

 

The Aquaculture Association of Southern Africa (AASA) has developed into a structure with representation from the various sectors contributing towards the aquaculture industry of the region, including marine species such as oysters, mussels, abalone and prawns; freshwater species such as trout, catfish, tilapia, ornamental fishes; as well as service providers such as feed companies, equipment suppliers and veterinary services.

 

Aquaculture Innovations are aquaculture consultants within the Eastern Cape, they provide assistance in developing business plans, feasibility studies, species selection, system designs, production audits and mentorship to all interested aquaculture parties.

 

The Aquaculture Institute of South Africa functions to provide an integrated and sustainable aquaculture sector for the Western Cape and South Africa in general.

The high-energy nature of the South African coastline limits opportunities for sea-based aquaculture to a small number of sheltered bays and estuaries. Shore-based, pump ashore operations have been successfully developed for abalone and seaweed farming. Although South Africa possesses favourable environmental conditions for aquaculture, access to suitable sites, both sea-and land-based, has been identified as a fundamental constraint to the growth of the sector.

The greatest challenge that is experienced is that of acquiring the most appropriate land, the most suitable land is that of coastal land, however the price per hectare is extremely high which therefore pushes up the capital costs of the investment. Offshore activities are also limited since the South African coast lacks sheltered bays. Freshwater aquaculture activities require access to suitable water quantities and quality in order to function efficiently.

The infrastructure required for aquaculture is extensive, there needs to be adequate transport networks, with effective transportation to guarantee the delivery of the products which are all affected by temperature and length of travel. Access to water, in terms of quantity and quality are essential as well as methods to treat the effluent water. The area in which it is situated should be free of flooding. There should be sufficient electricity and buildings in place to ensure the effective running of the facility. Consideration needs to be given as to where and how to source the feed for the respective species i.e. marine feed is imported, while freshwater feed is made in the Western Cape.

The CDM is well connected in terms of transport linkages as well access to electricity; the major limitation however, is that of water. 

 

The marine aquaculture sector is a skills-based industry at all levels, and, if it is to grow, human skills capacity needs to be developed in collaboration with the key stakeholders in the private sector, educational institutions and relevant government departments.

 

At present, formal training in aquaculture is only provided at a tertiary level. There is a significant gap between the qualifications of workers (who have secondary level education) and management (who are generally trained on a tertiary level). A need was identified to develop technical training and skills for workers. This would enable the industry to meet efficiency and transformation goals. The aquaculture industry has the ability to employ a large number of workers, and is therefore a constantly growing sector of the economy that will help to establish livelihoods for many individuals. The unskilled workers will need to acquire on-the-job training and mentorship from knowledgeable aquaculture role-players, however while they will gain knowledge and skills from training they will find it difficult to reach managerial positions without having acquired further education.  

Rhodes University situated in Grahamstown in the CDM is a highly recognized tertiary institute for marine fish research, which is advantageous especially since this section of the aquaculture industry has the most potential. Therefore there are opportunities to gain the skills that are required within this industry. Aquaculture Innovation is also located in Grahamstown and assists with trainings and offering of aquaculture courses to gain adequate skills in this sector.

The greatest potential and highest return on investment will be that of Abalone farming. This investment requires approximately R30 million to start-up operations; and profit will only be realized after 5 years. However, the market demand is significant as well as the illegal operations of obtaining Abalone from the wild makes it an extremely sought after species. The market is dominated by the export market where the main export countries are China and Japan, the price received is approximately $32 p/kg, including the shell.

 

Trout and ornamental fish farming is also a lucrative market; trout requires approximately R600 000 to start up, and will realize profits after roughly 1.5 years. It is a “safe” market because it is already well established; has refined technology and is a well known industry that receives a high market price. The approximate selling price is R35 p/kg when sold whole to processors. Ornamental fish is also a growing industry, and has significant potential since the majority of the ornamental fish are imported to South Africa; therefore a large local market exists that is relatively untapped. Unit value of ornamental fish is also far higher than that of any other specie.

 

§         The experience of the local marine aquaculture industry to date reveals that growth has fallen far short of expectation, mainly due to an uncoordinated institutional environment, a lack of appropriate technology, difficulties in obtaining suitable culture sites, and inadequate public sector support measures to pioneer farmers.

§         Aquaculture is a form of intensive farming with relatively high unit production costs -compared to our industrial fisheries. The challenge is therefore to identify market opportunities for high value products that can be farmed profitably.

§         Production costs tend to be higher during the set-up phase of a new aquaculture sector, because production techniques have not been optimized, and economies of scale have not yet been achieved.

§         Without proper evaluation and mitigation of the impacts and implementation of responsible environmental management plans, aquaculture activities may degrade the ecosystems upon which they rely.

§         Access to appropriately structured, inexpensive funding has also suffocated the industry.

§         Identification of marine sites presents a problem for further development within this industry.

§         Illegal poaching operations compete with legitimate aquaculture operations.

§         CDM could build comparative market advantages through various strategies including the use of indigenous species for niche markets; exploitation of local environmental advantages; the development of cost efficient technology suited to local conditions; the branding of locally produced species and a “clean, green” image.

§         Over fishing and depleted fish stocks globally translates into a growth sector for the future.

 

National Department of Agriculture, 2010

Personal Interview with Aquaculture Innovations, 2010

Department of Environmental Affairs and Tourism, Draft Marine Aquaculture Sector Development plan, 2006

The Aquaculture Institute of South Africa, AISA Aquaculture Benchmarking Survey, 2009

 

§         All information contained within this profile was accurate at time of publishing.

§         The information contained within this report is intended only as an industry profile and does not assume to take the place of information contained within a business plan, pre-feasibility study or feasibility study.

§         The Cacadu District and service providers are not liable for any damages caused by the use of the information contained within this report.

§         The purpose of this profile is to both promote the area for investment and inform investors of relevant issues. It is advised that investors, who wish to pursue an investment within Cacadu DM, should use this profile as a basis to conduct further research.

Due to the vast and intricate nature of this industry, start-up and running costs are not illustrated for this sector. For specie specific information and associated costs it is advised that contact with the relevant association/institution recommended above be taken into consideration.