Fish Cycle

Idea Summary

There is undoubtedly a large amount of fish caught annually in Alaska. The filleting process removes unwanted material such as the internal organs, bones, heads and tails. These then become byproducts, which need to be taken care of. Traditionally, these byproducts have been dumped into the ocean without further processing and this has led to serious environmental issues.For example the oxygen and phosphorous content in it can then cause life clogging algae to appears in  water and tip off the eco balance for food. Recently, the Alaskan government has recognized this problem and required the 5 major fish processing companies to collectively form a factory for fish byproduct processing. However, this factory is currently operating at a loss of hundreds of thousands per year and the many other smaller fish processing companies are still simply dumping fish byproduct into the ocean.  What many do not  realize is that these so-called waste can be especially valuable in places like China, where there is an unusually high demand for fish oil and animal feed. There is valuable fish oil that can be extracted from this byproduct and the remainder can be made into fish mill, which at high qualities can be sold for human consumption and at lower qualities can be used as animal fed. It contains higher nutritional content than the average animal fed and is made from wild Alaskan fish, which is among some of the best in the world. We propose to start Fish Cycle, a company that exports fish by-product to Chinese fish mill plants for further manufacture into fish oils and fish meal animal feed.

Fish Cycle will first go to Alaska and collect fish byproduct from all fish processing companies, reimbursing the fisheries a small amount. The fish parts will then be dried at Fish Cycle plant in Alaska, so that it is both easier to transport and preserve. The dried product is compressed into containers to ship to China where our customer's processing plants are.

Currently, raw materials for fish related vitamins and supplements are relatively expensive in China. Animal fed is also relatively basic in quality. Most important of all, high quality raw material is difficult to come by and will be very expensive. We will be able to not only provide real wild deep ocean Alaskan fish parts but we will also be able to provide this at a relatively low price as we will have cheaper costs than our competitors.

The gigantic farming industry in China also secures profit for our customers, who can make fish meal after the extraction of fine fish oil. Fish meal can be sold at US$1200 to $1400 per metric ton on the Chinese trading market, which is much higher than the price we sell dried fish parts to our customers at.

We will initially start with collecting fish byproducts from the five major fish processing companies in Alaska and we are aiming for 125000 metric tons of fish byproduct in the first year, which will surprisingly allow us make profit in the first year due to international price difference of fish meal!

We have consulted with China Custom and confirmed that fish heads, tails and bones will be considered as waste and no tariff will apply!

We plan to set up a full fledged processing plant in China after 3 years and in 10 years we plan to accept all fish byproducts generated by fish processing companies in Alaska. Due to costs of factory build up and maintenance, we plan on renting a factory for the first three years for drying purposes. Our projected annual revenue is over 22 million  for the first year and we expect this number to steadily increase as we acquire more technology and as our company further expands. By 2020, we project Fish Cycle to be worth 500 million dollars and we project an exit price of 2.2 billion for exit in 2020.

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