CHAPTER 3: TECHNICAL /PRODUCTION STUDY

Presented by describing and making the necessary calculations.

IMPORTANT REMINDER: ALWAYS HAVE A 10-YEAR PROJECTION

1. Product Form: specify if the product to sell is processed, fresh, live, or dressed

Bluesea Lobster Product Form

The project chose the specie spiny lobster for production since it is the only specie that is grown for
marketing in the vicinity of the Province. This will be sold fresh/live to the buyers of the nearby city and to the
local consumer.
2. Production/Manufacturing Process-describe simply and clearly with the aid of flow charts
Bluesea Lobster Production Process Flow

SITE SELECTION PENS CONSTRUCTION STOCKING

PACKING HARVESTING FEEDING AND

MAINTENANCE

A. Methods of Site Selection and Pen Construction

1. Select a site considering the following criteria:
1) Has moderate water current and sandy ground;
2) Has a depth of water level should be one-meter-high during low tide and two meters during
high tide;
3) Has high marine water salinity.

2. Construct a pen about 20sq.m (for 200 lobster fingerlings). The pen may be established near the
residence of the fisher for easy monitoring.
1) Install bamboo poles underwater to serve as corners for the pen.
2) Enclose the pen with a plastic net. Cover the ground with net to prevent lobsters from escaping.
3) Tie the plastic net using a nylon twine.
4) Construct firm corners and walling using bamboo slats/coconut slabs or any seawater-resistant
material to protect pen from strong current and waves.
5) Cover the top portion of the pen with bamboo slats. Provide small opening with a removable
cover for feeding and harvesting.

B. Stocking
1) Weigh lobster fingerlings before stocking. Lobsters with 150-200 grams can be stocked in the
pen at a density of 10 pieces per square meter.
2) Drop carefully and individually the finger-lings into the pen to avoid defacing the appendages of
the fingerlings. Stocking should be done during high tide.
3) Stock fingerlings of the same size. Lobsters are carnivorous. The bigger ones can eat small
lobsters.

C. Feeding and Maintenance

1) Feed the lobster once a day preferably in the morning with any kind of fish trash or fresh
seaweed. Feeds should be chopped into small pieces.
2) Using a bolo, clean the pen twice a month to remove sediments and barnacles that stick
the net.

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 D. Harvesting
1) Harvest lobsters six to ten months (approximately 500-1000 grams/pc) after
2) Harvest lobsters by gently scooping using nets to avoid damage to the species.
3) Place newly-harvested lobsters in basin filled with seawater before packing.

E. Packing
1) Wrap lobsters in paper pre-soaked with saline water.
2) Arrange and pile gently in styro boxes filled with ice to prolong freshness.
3) Cover the styro boxes and seal with packaging tape

According to Mrs. Marites Mancile, owner of one of the two biggest producers of lobster in Dinagat
Province residing at Cagdianao, Dinagat Province demand of lobsters will depend upon the season/month.
Its demand would go higher during September until February especially during Chinese New Year. Thus, to
meet the demand lobster should be cultured from the month of March.

3. Production Size:
Minimum capacity (resources not fully used) and Maximum capacity (all resources are fully used)

Bluesea Lobster Production

Lobsters are known to be carnivores. They tend to eat their companions in the cage if they feel full
in it. That is why to decrease the case of consuming each other for 20sq.m only 700 pcs of 50-grammer
fingerlings is recommended.
The project will only utilize 65% of a cage’s capacity for its first year of operation to facilitate next ten
years’ increase in production size. Within 12 pens/cages of 4mx5m per cage the needed production materials
are 273 kilograms which is equivalent to 5,460 pcs. of fingerlings that would cost ₱2,184,000.00. Each
fingerling could grow 500-1000 grams after 6-10 months depending on how lobsters are feed. To be able to
meet the demand from the month of September- February the project will have a maximum of 6 times
harvesting period.

Bluesea Lobster Production Assumptions:

Total area: 12 cages (20m2/cage)
Fingerlings per cage: 455 pcs.
Weight per fingerlings: .05 kilograms
Amount per fingerlings: ₱400.00/.05kg
Harvesting: 2 cages per harvest
Culture period: 6-10 months
Harvesting period: starting September to February
Maximum production: 5,460 pcs.
Less: Loss during culture/ molting: 2.5% (137 pcs.)
Net production: 5,323 pcs.

4. Production Schedule- projected scale of operation Year 1-Year 10 based on minimum production
size with an assumed minimal % increase.
The project assumes that every year the production will increase by a minimum of 5.5% of the first
production.

Table. Bluesea Lobster 10 Year Production Schedule

YEAR 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Production
Volume 5,460 5,760 6,060 6,360 6,660 6,960 7,260 7,560 7,860 8,160
(in pcs.)
Net
Production
5,323 5,616 5,909 6,201 6,494 6,786 7,079 7,371 7,664 7,956
Volume
(in pcs.)

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 5. Farm Location- with the aid of maps and charts identify the most ideal plant site. It must consider
the following factors:
a. Accessibility/availability of raw material sources
b. The availability of cheap utilities
c. Combined cost of transportation
d. Proximity to distributing outlets
e. Availability of skilled/unskilled labor.

Bluesea Lobster Farm Location

The most important aspect in developing potentially productive lobster farm is the location. Lobster
production greatly depends upon specific environment that is why it is necessary to identify the best and
suitable location. The location must have moderate water current and sandy ground, has a depth of water
level should be one-meter-high during low tide and two meters during high tide and has high marine water
salinity.
Lobster farming is a lucrative and viable livelihood, especially for coastal residents. Dinagat Islands
is composed of 7 municipalities namely Libjo, Basilisa, Cagdianao, San Jose, Loreto, Dinagat and Tubajon.
Dinagat Islands known as a thriving producer of Spiny lobster for how many years proves that the place is
suitable for lobster production.
The proponent chose the municipality of Libjo, one of the 4 municipalities of Dinagat that produces
lobster as its production location. It is merely because the location meets all the requirements in establishing
a lobster farm. In addition, the location has already the accessible/available raw materials, availability of the
needed labor, and accessibility to transportation since the place has its own port/wharf.

6. Farm Layout-depicted through diagrams and description.

Characteristics of a good farm layout:
a. Minimum material handling
b. Effective space utilization
c. Smooth work flow
d. Safe and conducive working area
e. Safety and sanitation facilities

Bluesea Lobster Farm Layout

The farm will be situated 80m from the shoreline. Identifying marks includes its pen and a hut above
the pens. A hut or a farmhouse will serve as storage and a place where the security will stay during night
and day time.

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 SHORELINE

Legend:
80m Red-path
Blue-ladder
Green-farmhouse
20 m

1.5 m
FARM HOUSE
8m

12 m

7. Building and Facilities

a. Type and cost of building
b. Give Dimensions and detailed computation of material
c. Land and land improvements (roads, drainage facilities and cost involved.

Bluesea Building and Facilities

The project will have a farmhouse located at the top of the cages/pens which will also serve as
storage for harvested lobster and will not need land anymore or purchase land for the building and the cages
since it will be located at the sea. Building the farmhouse is necessary for it will serve us the proper storage
of the harvested lobster before the buyers came or before it is delivered to the buyers, it is where the security
maintenance will stay day and night, to provide accessibility to the municipal or provincial buyers and will
also serve as the office of the project.
The farmhouse will have a total area of 8mx5m that will be placed at the right side of the farm above
the cages. There will be 12 cages (4mx5m each). Each cage will have one ladder that will be useful for cages’
maintenance and harvesting.

Table.14 Bluesea Lobster Building Cost Establishment

STRUCTURAL CONCRETE
Quantity computation
Footing : (1.0 x 1.0 x 1.0) x 20 20.00 cu.m.
Total Volume 20.00 cu.m.
Material Requirement
Cement 20.00 x 9.0/cu.m. 180 bags
Say bags
180

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 Sand 20.00 x .50/cu.m. 10 cu.m.
Say cu.m.
10.0
Gravel 20.00 x 1.0/cu.m 20 cu.m
Labor Requirement
A Fabrication, placing & dismantling of forms &
scaffoldings
Crew : 4-carpenters & 8-helpers
Capability : 3.00 cu.m/day
no. of days : 20. 00 cu.m./3.00cu.m./day 7 days

B Concreting & curing w/ 1-bagger concrete Mixer

Crew : 2-Masons & 8-helpers
Capability : 3.00 cu.m/day
no. of days : 20. 00 cu.m./3.00cu.m./day 7 days
I. DIRECT COST
A. Materials
180 Bags Portland Cement T-1 (40 bags) @ 45,000.00
250.00
10 cu.m. Sand @ 10,000.00
500.00
20 cu.m. Gravel @500.00 20,000.00
7 Shts 12mm x 1.22m x 2.44m Ord. @ 11,200.00
Plywood 800.00
140 bd. Ft. 35 pcs. 2” x 2” x 12’ lumber @18.00 2,520.00
lawaan
70 bd. Ft. 35 pcs. 2” x 1” x 12’ lumber @18.00 1,260.00
lawaan
3 kgs. CWNail 1-1/2” @ 85.00 255.00
5 kgs. CWNail 2-1/2” @ 85.00 425.00
3 kgs. CWNail 4” @ 85.00 255.00
Total Material Cost P 90,915.00
B. Labor
2 Masons 4 days @ 2,800.00
350.00
4 Carpenters 4 days @ 2,800.00
350.00
8 Laborers 8 days @ 16,512.00
258.00
Total Labor Cost 22,112.00
TOTAL DIRECT COST P 113,027.00
Unit Direct Cost for this item
REINFORCEMENT
I. DIRECT COST
A. Materials
12 Pcs RSB 10mm DIA. X 6M 200.00 2,400.00
27 Pcs RSB 8mm DIA. X 6M 170.00 4,590.00
2 Kg Tie Wire #16 GI 85 179.00
Total Material Cost P 7,169.00
B. Labor
1 Laborer 8 days @ 2,064.00
258.00
Total Labor Cost 2,064.00

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 TOTAL DIRECT COST P 9,233.00
Unit Direct Cost for this item
CARPENTRY WORKS
Quantity computation
Floor Slab : (5.5x5) - [(8x14) - (4.5x4)] or 92 828.00 bd. ft.
pcs 1"x6"x18'
Floor –Beams : 30 pcs. 2"x4"x10' lumber 200.00 bd.ft.
Bridge floor Slab : 10 pcs of 314' bamboo 4" dia. x 262.00 pcs
12'
Bridge Beams : 53 pcs 2" x 3'' x 12' coco lumber 314.88 pcs
Roof- Beams : 8 pcs. 2"x3"18' lumber lawaan 40.00 bd.ft.
Wall : (2.5 x 21) + (1/2x5x.75x2) + 66.88 sq. m
(5x2.5) bamboo strips/katsaw
Posts A : 20 pcs x 10'' dia. x 10' Round 436.33 bd.
coco timber Ft.
Truss : 20 pcs. 2" x 2" x 10' lumber 66.67 bd.
lawaan Ft.
Purlins : 16 pcs. 2" x 1" x 10' lumber 26.67 bd.
lawaan Ft.
Posts B : 9 pcs. 2" x 4" x 10' lumber lawaan 60.00 bd.
Ft.
Doors : 4 pcs. 1" x 2" x 8' lumber lawaan 10.67 bd.
Ft.
Windows : 20 pcs. 1"x2"x8' lumber lawaan 26.67 bd.
Ft.
Fence A : 237 pcs. 1" x 2" x 4' Bamboo Slice 60.00 bd.
Ft.
Fence A Support : 35 pcs. 2"x2"x8' lumber 46.67 bd.
Ft.
Fence B : 80 pcs Bamboo 12' long 80.00 pcs.
Fence Support : 21 pcs. 3"-4"x12' Round Timber 46.67 bd.
Ft.
Net : 2 x (5x2) + 2(4 x 2) x (4 x 5) 50.00 sq. m
I. DIRECT COST
A. Materials
362 Pcs 12' bamboo whole 120.00 43,440.00
30 Shts 0.5" x 2' x 12' katsaw 150.00 43,440.00
437 bd. Ft. 20 pcs x 10'' dia. x 10' Round @18.00 7,853.94
coco timber
314.9 bd. Ft. 53 pcs 2" x 3'' x 12' coco lumber @18.00 7,560.00
460 bd. Ft. 92 pcs. 1" x 6" x 10' lumber @18.00 8,280.00
lawaan
368 bd. Ft. 92 pcs. 1" x 6" x 8' lumber lawaan @18.00 6,624.00
37.34 bd. Ft. 24 pcs. 1" x 2" x 8' lumber lawaan @18.00 5,040.00
26.67 bd. Ft. 16 pcs. 1" x 2" x 10' lumber @18.00 480.06
lawaan
66.67 bd. Ft. 20 pcs. 2" x 2" x 10' lumber @18.00 1,200.06
lawaan
46.67 bd. Ft. 35 pcs. 2" x 2" x 8' lumber lawaan @18.00 840.06
5 Shts Zinc 400.00 2,000.00
0.5 Roll Umbrella head nail 100.00 50.00
10 Rolls Net 1000.00 10,000.00
25 Rolls Nylon 150.00 3,000.00

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 15 kgs. CWNail 1-1/2” @ 85.00
3,700.00
15 kgs. CWNail 2-1/2” @ 85.00 2,700.00
10 kgs. CWNail 5 @ 85.00 850.00
10 kgs. CWNail 4” @ 85.00 850.00
Total Material Cost P 147,908.12
B. Labor
4 Carpenters 30 days @ 42,000.00
350.00
8 Laborers 30 days @ 61,920.00
258.00
Total Labor Cost 103,920.00
TOTAL DIRECT COST P 251,828.12
ELECTRICAL
I. DIRECT COST
A. Materials
100 M Drop wire 30.00 3,000.00
50 M Wire Stranded no. 12 70.00 3,500.00
3 Pcs Switch 60.00 180.00
3 Pcs Receptacle 50.00 150.00
Total Material Cost P 6,830.00
B. Labor
1 Laborer 8 days @ 2,064.00
258.00
Total Labor Cost 2,064.00

TOTAL DIRECT COST P 8,894.00

Unit Direct Cost for this item
Total Direct Cost 252,822.12
Total Labor Cost 130,160.00
Total Project Cost 382,982.12

Figure.6 Side View

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Figure.7 Full View

Figure.8 Aerial View

Figure.9 Inside View

8. Machinery & Equipment/Tools- identified and listed according to type and use including
specifications, capacities and cost in detail

Bluesea Lobster Machinery/Equipment/Tools

The project would need at least one pump boat to be used for transportation to the site, for
maintenance and monitoring and for loading the harvested lobster for delivery.

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 The project will also buy table, chairs and other necessary things for business transactions.
And in addition, the project will need a weighing scale for weighing live lobster before delivery. It will
also need bolo for cages maintenance and other uses.

Table.12 Equipment for the Farm

PARTICULARS NO. UNIT PRICE AMOUNT

Pump boat 1 ₱100,000.00 ₱100,000.00

Total ₱100,000.00
Table.13 Furniture and Fixture
PARTICULARS NO. UNIT PRICE AMOUNT
Table 1 ₱2,500.00 ₱2,500.00
Wooden Chair 2 ₱350.00 ₱700.00
Pail 5 ₱300.00 ₱1,500.00
Styro boxes 5 ₱250.00 ₱1,250.00
TOTAL ₱5,950.00

Table .17 Tools

PARTICULARS NO. UNIT PRICE AMOUNT

60 kg weighing scale 1 ₱2,500.00 ₱2,500.00

Bolo 3 ₱300.00 ₱900.00
Total ₱3,400.00

9. Depreciation Schedule- in a tabular form show yearly & total depreciation expense from Year 1-
Year 10 for building, facilities, machineries, equipment, tools, furniture & fixtures and all other fixed
assets except land.
Depreciation/year = Original Cost - Salvage Value
Economic Life

Table.21 Bluesea Depreciation Schedule

ASSETS ORIGINAL COST LIFE SPAN DEPRECIATION/YEAR
Building 383,432.12 10 38,343.21
Equipment 100,000.00 10 10,000.00
Tools
60 kg. Weighing Scale 2,500.00 5 500.00
Bolo 900.00 10 90.00
Office furniture and fixture
Table 2,500.00 10 250.00
Wooden Chair 700.00 10 70.00
Pail 1,500.00 2 750.00
Styroboxes 1,250.00 10 125.00
Note: Salvage Value is assumed to be zero (0) at the end of economic life.

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Table.22 Annual Depreciation Schedule
Year 1 2 3 4 5 6 7 8 9 10
Building 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21 38,343.21
Equipment 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Weighing Scale 500.00 500.00 500.00 500.00 500.00 - 500.00 500.00 500.00 500.00
Bolo 90.00 90.00 90.00 90.00 90.00 90.00 90.00 90.00 90.00 90.00
Table 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00
Wooden Chair 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00
Pail 750.00 750.00 - 750.00 - 750.00 - 750.00 - 750.00
Styroboxes 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00
TOTAL 50,128.21 50,128.21 49,378.21 50,128.21 49,378.21 49,628.21 49,378.21 50,128.21 49,378.21 50,128.21

10. Raw Materials and Production Supplies

a. Identify required volume needed and costs of raw materials and production supplies
b. Identify sources of these raw materials and production supplies
c. Project expenses for these items from Year 1 to Year 10 with an assumed average percentage
increase
Bluesea Lobster Raw Materials
Spiny lobster fingerlings will be bought from the existing grower of Dinagat. With 12 cages the project
will utilized only 65% of its capacity in preparation for the next 10 years increase of production, there will be
455 pieces of 50-grammer Spiny Lobster fingerlings per pen/cage.
Lobsters are grown six to ten months depending on how it is feed. It must be feed alternately with
seafood such as sea urchin, crabs, and seaweeds every after two days. Lobsters are feed increasingly every
month depending on how much it weighs. Thus, lobsters are weighed every month to figure out the additional
feed. Ten percent (10%) of a lobster’s body weight is its amount of feed.
Assumption:
Weight of lobster fingerlings will increase .09 kg every month. The average amount of any feed per
kilo is ₱10.00.
Table.15 Feed Computation for 1 year
MONTH VOLUME (IN KG) UNIT PRICE (PER KG) AMOUNT
March 846 ₱10.00 8,463
April 2,293 ₱10.00 22,932
May 3,893 ₱10.00 38,930
June 5,242 ₱10.00 52,416
July 6,940 ₱10.00 69,397
August 8,463 ₱10.00 84,630
September 9,664 ₱10.00 96,642
October 11,510 ₱10.00 115,097
November 12,613 ₱10.00 126,126
December 14,556 ₱10.00 145,564
January 16,080 ₱10.00 160,797
February 15,900 ₱10.00 158,995
Total 107,999 ₱10.00 1,079,988

Table.16 Direct Materials

PARTICULARS VOLUME (IN KG) UNIT PRICE (PER KG) AMOUNT
Fingerlings 455 pcs x12 ₱400.00 per piece ₱2,184,000.00
cages=5460
Feeds 107,999 ₱10.00 1,079,988.00
Total ₱3,263,988.00

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 Table.17 Projected Direct Materials

Direct 3,263,988 3,443,507 3,623,026 3,802,546 3,982,065 4,161,584 4,341,104 4,520,623 4,700,142 4,879,662
materials .00 .34 .68 .02 .36 .70 .04 .38 .72 .06

11. Utilities
a. Identify amount needed, costs and sources of electricity, fuel and water.
b. Project expenses for these items from Year 1 to Year 10 with an assumed average percentage
increase

Bluesea Lobster Utilities

Electricity is used for lighting the hut. An estimated monthly usage of 20 kWh with ₱8.525/kilowatt,
monthly consumption would be ₱170.50. Electricity expense would be assumed to increase 5% annually.
The project will do harvest two cages for three days and will of course transport three times to the nearby city
which will use 10 liters/day. Another 2 liters/week is allocated for the daily transportation to the farm. Fuel’s
price is expected to rise 5% of the first year every year.
Table .18 Utilities
AMOUNT
PARTICULARS NO. UNIT PRICE
(PER YEAR)
Electricity 20 kilowatt/month ₱8.525/kilowatt ₱2,046.00
Fuel 106 liters ₱35.00 ₱3,710.00
Total ₱5,756.00

Table .19 Forecasted utilities

Particulars YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

Electricity 2,046.00 2,148.30 2,250.60 2,352.90 2,455.20 2,557.50 2,659.80 2,762.10 2,864.40
Fuel 3,710.00 3,895.5 4,081 4,266.50 4,452 4,637.50 4,823 5,008.50 5,194
Total 5,756.00 6,043.80 6,331.60 6,619.40 6,907.20 7,195.00 7,482.80 7,770.60 8,058.40

12. Labor requirement

a. Identify direct, indirect and administrative labor required (tabular form)
b. Number of workers to be employed for each job classification
c. Pay scale for salaries & wages and other benefits
d. Project expenses for salaries/wages from Year 1 to Year 10 with an assumed average
percentage increase
Bluesea Lobster Labor Requirement
The proponent will employ three (3) regular worker and direct laborers who will be in charge in the
planting, maintenance, harvesting, weighing and packing the lobster that will be paid daily of ₱200.00/day.
There wages are assumed to increase by 5% of the first year annually.
Table .20 Direct Labor
ACTIVITY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10
Stocking,
harvesting,
219,000 229,950 240,900 251,850 262,800 273,750 284,700 295,650 306,600 317,550
weighing and
packing
Total 219,000 229,950 240,900 251,850 262,800 273,750 284,700 295,650 306,600 317,550

13. Waste Disposal

a. Describe manner of waste disposal
b. Cost in doing away with expected waste

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