JOINT-VENTURE PARTNERS' RETURN ON EQUITY (ROE)
INVESTMENT:
FST has six different types of Commercial Aquafarm systems for Joint-Venture Partners to choose from. (see Commercial Aquafarm page) This page identifies the types of fish and shellfish combinations grown with vegetables, algae, seaweeds and plankton. The annual production designs are given for both the aquaculture fish and shellfish and their combination hydroponic vegetables and seaweeds, with the minimum cost to build any one of these systems at $5 million dollars. This would be the total amount required to fund the project through to production of produce filling the Purchase Order.
COMMERCIAL AQUAFARM NET EARNINGS END OF YEAR 3
The building and construction time for any one of these Aquafarms will be 9 to 12 months which growing could start immediately after.
The calculation for production is based on 12 months to grow Tilapia from hatchery to market with a build up time period of two years with new fingerlings each month added to establish a continuous monthly supply to the target volume designed, which will be end of year 3.
Vegetables will be harvested within two months of planting and full volume will be harvested after three months growing. At the end of year 3, harvesting would have been completed for 21 months and this volume is shown below.
FST has six different types of Commercial Aquafarm systems for Joint-Venture Partners to choose from. (see Commercial Aquafarm page) This page identifies the types of fish and shellfish combinations grown with vegetables, algae, seaweeds and plankton. The annual production designs are given for both the aquaculture fish and shellfish and their combination hydroponic vegetables and seaweeds, with the minimum cost to build any one of these systems at $5 million dollars. This would be the total amount required to fund the project through to production of produce filling the Purchase Order.
COMMERCIAL AQUAFARM NET EARNINGS END OF YEAR 3
The building and construction time for any one of these Aquafarms will be 9 to 12 months which growing could start immediately after.
The calculation for production is based on 12 months to grow Tilapia from hatchery to market with a build up time period of two years with new fingerlings each month added to establish a continuous monthly supply to the target volume designed, which will be end of year 3.
Vegetables will be harvested within two months of planting and full volume will be harvested after three months growing. At the end of year 3, harvesting would have been completed for 21 months and this volume is shown below.
Tilapia
The first of six Commercial Aquafarm earnings from 1 million lbs of Tilapia at $2.50/lb is $2.5 million dollars plus 5 + 3.75 = 8.75 million lbs of Vegetable sold at $1.50/lb is $13.125 million dollars. The gross earnings is $15.625 million less operation expenses of $10 million is a net earnings of $5.625 million.
Salmon
The second of six Commercial Aquafarm earnings from 1 million lbs of Salmon at $ 5.00/lb is $5 million dollars plus 5 + 3.75 = 8.75 million lbs of Vegetable sold at $1.50/lb is $13.125 million dollars. The gross earnings is $18.125 million less operation expenses of $12 million is a net earnings of $6.125 million.
Spirulina
The third of six Commercial Aquafarm earnings from 2.2 million lbs of Spirulina at $20/lb is $40 million dollars as the gross earnings less $10 million operation expenses is a net earning of $30 million.
Shrimp
The fourth of six Commercial Aquafarm earnings from 1.5 million lbs of Shrimp at $15/lb is $22.5 million dollars plus 5 + 3.75 = 8.75 million lbs of Edible seaweed sold at $3.00/lb is $26.25 million dollars. The gross earnings is $48.75 million less operation expenses of $15 million is a net earnings of $33.75 million.
Abalone
The fifth of six Commercial Aquafarm earnings from 00 lbs of abalone sold at $40/lb is $0 million dollars. Abalone takes three years to grow to market size threfore it be another year before harvest.
Rock Lobster
The sixth Commercial Aquafarm earnings from 00 lbs of rock lobster sold at $15/lb is $0 million dollars. plus 2.5 million lbs of mussels, oysters sold at $3.00/lb is $7.5 million dollars. The gross earnings is $7.25 million dollars less operation expenses of $6 million is a net earnings of $1.25 million.
The first of six Commercial Aquafarm earnings from 1 million lbs of Tilapia at $2.50/lb is $2.5 million dollars plus 5 + 3.75 = 8.75 million lbs of Vegetable sold at $1.50/lb is $13.125 million dollars. The gross earnings is $15.625 million less operation expenses of $10 million is a net earnings of $5.625 million.
Salmon
The second of six Commercial Aquafarm earnings from 1 million lbs of Salmon at $ 5.00/lb is $5 million dollars plus 5 + 3.75 = 8.75 million lbs of Vegetable sold at $1.50/lb is $13.125 million dollars. The gross earnings is $18.125 million less operation expenses of $12 million is a net earnings of $6.125 million.
Spirulina
The third of six Commercial Aquafarm earnings from 2.2 million lbs of Spirulina at $20/lb is $40 million dollars as the gross earnings less $10 million operation expenses is a net earning of $30 million.
Shrimp
The fourth of six Commercial Aquafarm earnings from 1.5 million lbs of Shrimp at $15/lb is $22.5 million dollars plus 5 + 3.75 = 8.75 million lbs of Edible seaweed sold at $3.00/lb is $26.25 million dollars. The gross earnings is $48.75 million less operation expenses of $15 million is a net earnings of $33.75 million.
Abalone
The fifth of six Commercial Aquafarm earnings from 00 lbs of abalone sold at $40/lb is $0 million dollars. Abalone takes three years to grow to market size threfore it be another year before harvest.
Rock Lobster
The sixth Commercial Aquafarm earnings from 00 lbs of rock lobster sold at $15/lb is $0 million dollars. plus 2.5 million lbs of mussels, oysters sold at $3.00/lb is $7.5 million dollars. The gross earnings is $7.25 million dollars less operation expenses of $6 million is a net earnings of $1.25 million.
COMMERCIAL AQUAFARM NET EARNINGS END OF YEAR 4
Growing Tilapia, Salmon, Spirulina and Shrimp provide a Return on Equity of Net Earnings/Equity x shares (50%), ROE = 50%, in year ending 3, through reduced purchase price to JV Partner. Approximately 25% of net earnings would be required for operation cost into year 4.
Also added value for Tilapia smoked fillets would increase annual earnings of $2 million dollars with a total net earning of $ 7 million dollars in year ending 4.
Salmon with added value with smoked fillets would increase annual earning of $2 million dollars with a total net earnings of $8.5 million dollars in year ending 4.
Shrimp with another straight year of harvest would produce a total net earnings of $14.5 million dollars in year ending 4.
Growing Tilapia, Salmon, Spirulina and Shrimp provide a Return on Equity of Net Earnings/Equity x shares (50%), ROE = 50%, in year ending 3, through reduced purchase price to JV Partner. Approximately 25% of net earnings would be required for operation cost into year 4.
Also added value for Tilapia smoked fillets would increase annual earnings of $2 million dollars with a total net earning of $ 7 million dollars in year ending 4.
Salmon with added value with smoked fillets would increase annual earning of $2 million dollars with a total net earnings of $8.5 million dollars in year ending 4.
Shrimp with another straight year of harvest would produce a total net earnings of $14.5 million dollars in year ending 4.
JV PARTNERS RETURN ON EQUITY (ROE) AT END OF YEAR 5
The breakeven point of JV Partners' Purchase Order (investment of $5 million) is delivered in produce completing the Purchase Order contract between3 to 4 years providing a return on equity of 50% ending year 4, and 5, with another twenty years of sustained ROE either by way of purchasing product at half price or by selling product at double the cost.
This is a win - win for FST and the JV Partner where both share in the cost of operation and earnings through sales. FST will continue operation of the facility and JV Partner will continue to supply their customers and consumers to each others benefit.
The JV Partner will have superior product, with guaranteed price and supply for its customers and consumers alike for twenty years. The JV Partner will also have protection from competition where zoning by agreement will ensure FSC does not establish a second supplier within the same zoned area.
FSC will also consider building more capacity if desired by the JV Partner with similar terms of using the Purchase Order as Finance.
JOINT-VENTURE ASSET VALUE AT END OF YEAR 5
The Value of the Company at year 5 if no additional structures are built to produce more product and by using a multiplier of EBITDA (earnings before interest, taxes, depreciation, and amortization), of say 5 years of forecasted earnings, would amount to on average $8.5 million (ave earnings) x 5 years = $42.5 million dollars.
With 50/50 shares the JV Partner would have an asset valued at $21.25 million dollars at end of year 5.
ASSUMPTIONS
The calculations above are based upon the aquaculture (fish farming) industry for both construction of new intensive farming and operation expenses. Also the figures for greenhouse hydroponically grown vegetable are based upon that industries standards as these are the closest forms of existing operations to the Commercial Aquafarm systems.
The breakeven point of JV Partners' Purchase Order (investment of $5 million) is delivered in produce completing the Purchase Order contract between3 to 4 years providing a return on equity of 50% ending year 4, and 5, with another twenty years of sustained ROE either by way of purchasing product at half price or by selling product at double the cost.
This is a win - win for FST and the JV Partner where both share in the cost of operation and earnings through sales. FST will continue operation of the facility and JV Partner will continue to supply their customers and consumers to each others benefit.
The JV Partner will have superior product, with guaranteed price and supply for its customers and consumers alike for twenty years. The JV Partner will also have protection from competition where zoning by agreement will ensure FSC does not establish a second supplier within the same zoned area.
FSC will also consider building more capacity if desired by the JV Partner with similar terms of using the Purchase Order as Finance.
JOINT-VENTURE ASSET VALUE AT END OF YEAR 5
The Value of the Company at year 5 if no additional structures are built to produce more product and by using a multiplier of EBITDA (earnings before interest, taxes, depreciation, and amortization), of say 5 years of forecasted earnings, would amount to on average $8.5 million (ave earnings) x 5 years = $42.5 million dollars.
With 50/50 shares the JV Partner would have an asset valued at $21.25 million dollars at end of year 5.
ASSUMPTIONS
The calculations above are based upon the aquaculture (fish farming) industry for both construction of new intensive farming and operation expenses. Also the figures for greenhouse hydroponically grown vegetable are based upon that industries standards as these are the closest forms of existing operations to the Commercial Aquafarm systems.
