JUST MY THOUGHTS ON STARTING FISH SAUCE OR BUDU FERMENTATION INDUSTRY

Most people often have the idea of commercialization of the fish sauce fermentation from the level of a small cottage industry to a large manufacturing concern. They seem to think that the whole process of translation from a cottage to a large fermentation industry is smooth sailing. In reality it is more complex not only at the level of increasing the scale of manufacturing the budu fermentation but to the level of increasing the market demand and successful marketing.

I always feel very sad when I see some new ventures or projects failed. Such failures will leave very devastating impacts on the investors or entrepreneurs. Lots of investments in terms of money, energy and hope will be thrown into the wind. At the same time I just can’t help feeling very angry and disappointed with these entrepreneurs. Had they done proper studies on the technical and economic viability of the projects, such catastrophes could have been avoided. Maybe they do not listen to advice or worst they listened to the ‘wrong advice’.

THE BUSINESS PLAN
They should have their business plan on paper first. Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan should contain whatever information is needed to decide whether or not to pursue a goal. They should not be rushing into the projects without doing proper studies and background research.

There are many questions that need to be answered before embarking on such projects. It is very important at this early stage to be critical of the project and to find what possibly could go wrong rather than dreaming that the project will be smooth sailing and guaranteed to succeed.

During this stage of planning ‘allowances’ must be made for contingencies or unexpected changes.

Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management and marketing among others..

It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.[

If the proposed project failed on paper then high chances are that the business will fail in reality. At least failing on paper would not incur much collateral damages such as costs of investments.

CHARACTERISTICS OF FISH SAUCE INDUSTRY

Fish sauce fermentation is a traditional food fermentation industry. It is often carried out on small scale or the backyard industry. Very few of the fish sauce industries are carried out at industrial scale in Thailand. Thailand is the major global producer for fish sauce.

The key element in this industry is the availability of fishes which are used as the substrate for fermentation. Different countries or manufacturers use different type of fish for the fish sauce fermentation

With the stock of fish dwindling down, it is risky at present to carry out fish sauce fermentation, unless you are willing to go for alternative supply of cheaper fishes. There was a time years ago when anchovies used for fish sauce fermentation is plenty and cheap. During those days the anchovies are the poor man’s diet. But not now!. Anchovies are expensive and even the poor man can’t afford it

In the economics of fish sauce fermentation it is important that the industry is run continuously and efficiently to be viable. We cannot have most of the times workers and machines being idle.



TECHNOLOGY OF PRODUCING FISH SAUCE
In Malaysia making fish sauce is mainly in the realms of small scale cottage industries. Production is viable to service local or regional demands. The method of fish sauce produced by these small cottage industries is often not geared for high volume production.

1 Fermentation Technology is passive
2 Non mechanized or automated
3 More of free time industries
4 Fermentation is too long from six months to more than a year

ECONOMY OF SCALE
One of the hallmarks of business of manufacturing is to produce the products at the lowest cost while still making profits. Lowering the price will make it attractive to consumers and reduce or eliminate competitors of the same products. This can only be achieved if the volume of production is higher thus the cost of producing the unit price will be lowered. In fermentation this would mean involving bigger fermentation capacity which is not normally achieved in small cottage industries

THE SUCCESS OF EVERYTHING DEPENDS ON MARKETING
Just how popular are the fish sauce? In Malaysia, fish sauce or budu are only highly regarded by people in the East coast or originating from East coast. Will their number be sufficient to make the business of fish sauce fermentation economically viable?

As fish sauce is an acquired taste it might be difficult to penetrate the European countries or United States. These countries too are very stringent regarding the standards and quality of how the sauce is manufactured. I doubt many will pass through the stringent barriers of GMP, HACCP and QC control. It should be clean and free of possible pathogens

PRODUCT POTENTIAL?

Yes! Fish sauce is an excellent product and has potential to succeed in global market. However, in order to succeed there need to be visible improvements in the production process, packaging and marketing




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