A Case Study of Carp Seed Production Farm in Bangladesh: Feasibility Analysis

This report represents an analytical tool developed for the purposes of evaluating the feasibility of a carp seed production farm in Bangladesh. The analyses were based on the assumptions of secondary data, which were collected from both printed and web publications. The financial feasibility of the farm was studied using the Profitability Assessment Model, which utilized some indicators of investment returns such as Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, Financial Ratios, Modified Internal Rate of Return (MIRR), etc. The risk of the investment was assessed through Impact Analysis, Scenario Analysis and Monte Carlo Simulation. Similarly, technical feasibility was studied by analysing the possible outcomes of a selective breeding programme and the scope of improving existing practices. Finally, environmental feasibility was analysed on the basis of the environmental factors and related acts or rules. The findings of the analyses indicate that the proposed carp seed production farm is financially, technically and environmentally feasible. Total financing of the project is calculated as 15 MBDT of which equity is 30%. The results obtained from the study show positive NPV, i.e. 26 MBDT of capital and 25 MBDT of equity from a 10-year-operation, which are acceptable. The IRR of capital and the IRR of equity are found to be 37% and 60% respectively, which are also adequate because the Marginal Attractive Rate of Return is determined as 10%. The discounted payback period of the investment is measured at only 4 years. As a result, the project is recommended as financially feasible even if it is operated only for 5 years. Further, the results of risk assessment present that there is 98% probability of getting profit from the investment. However, the project is sensitive to sales price followed by sales quantity. Similar to other fish selective breeding programmes, the project is also considered feasible both technically and environmentally. It is concluded that the planned investment is highly feasible to operate in Bangladesh.