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Business start-up: 

Crab Shells: A waste product that is a source for chitin and chitosan

Turning waste crab shells into chitin and chitosan.

Crab fishing is the livelihood of our coastal communities. This is the 6th largest marine export of our country. The waste of processing, crab shells, can be processed into chitin and chitosan. This is widely used in medical, industrial, agricultural and environmental applications.

Facts

Year of establishment

2007

Sales (US$)
Two years ago:
Last year:
This year (forecast): 3,600,000
Year 2 (forecast): 4,500,000
Year 3 (forecast): 6,000,000
Net profit after tax (US$)
Two years ago:
Last year:
This year (forecast): 280,000
Year 2 (forecast): 700,000
Year 3 (forecast): 1,100,000
Total number of Employees
Two years ago:
Last year:
This year (forecast): 120
Year 2 (forecast): 160
Year 3 (forecast): 220

How do you expect this to be financed?

Own Contribution in cash 20,000
Loans (debt)
Shares in your company that you offer to investors (equity)
Other sources
Total finance needed (US$) 20,000

The Business

What is your product/service?

Our primary product will be crab meat for export to the U.S. market, which imports roughly 30 million pounds of crab meat annually. Our secondary product will come from the waste of processing of our crabs. Crab shells has been a problem for our crab processors. This waste causes air polllution due to its foul odor and attracts flies. Left unsolved this will become a health hazard and poses risk of contamination of our export product, crab meat.

Our plan is to process these shells into Chitin and Chitosan. Chitosan is derived from chitin. Chitin is a non toxic, biodegradable polymere of high molecular weight. After cellulose, it is the most common polysaccharide found in the nature. Like cellulose, chitin is a fiber, and in addition, it presents exceptional chemical and biological qualities that can be used in many industrial and medical applications. Present applications of chitin and chitosan are in the field of cosmetics, pharmacology, medicine, dietetics, bio-technology, environment, waste water treatment, agriculture, textiles, wood, and paper manufacturing.

Our company will be composed of stakeholders in the crab fishing communities. Our business activities include fishing, processing, pasteurizing, canning, waste processing and marketing.

Explain how you will sell your product/service (marketing strategy) and how you will reach your customers (distribution strategy)?

We have been amazed at the interest expressed by buyers. We have not actively marketed our products. We have published our story in the internet, and as a result of that, two companies have come and visited us. The U.S. buyer, having seen our story published in the Worldbank DevelopmentMarketplace website, came in March 2007 and is committed to purchase from us. They have seen our operation and is satisfied with the quality standards that we have implemented. The Japanese buyer of our crab shell visited us in May. He has ordered a fixed volume per month.

What makes your business different/better than your competitors (competitive advantage)?

We are probably the only fully integrated entity in this business. Since stakeholders in the communities are also the owners of this venture, the stability of our supply is guaranteed.

The Entrepreneur & Management

Describe the entrepreneur & management

I have been working with our communities for the past 12 years as their mayor. Programs addressing concerns in education, livelihood, health, environment and equal opportunities have been implemented over the years.

As my term as mayor comes to an end, the gains of our programs should continue, but this time not as a government led initiative but a community driven enterprise.

I have a Master's Degree in Business Administration from the Southern New Hampshire University, U.S.A. My personal businesses are engaged in agriculture and aquaculture.

Development

How does your business improve the local living standards (social and environmental)?

This will transform crab fishing from a mere livelihood into an industry. This will increase incomes of fishing families. Many new business opportunities will be created. Other marine species can be developed as an export product. Support services needed by the company will create other businesses ventures in our municipality.

3 comments

Congratz

Mayor, more power.

Romy Miranda, 25 Oct 07, 05:59

Crab Shells

Dear Hon. Gamboa,

This is a welcome alternative source of income for our coastal people. Does this include all kinds of crab shells? We have plenty of this around our coatal towns of Southern Leyte.

Please send us information.

Thank you and congratulations.

Nelson
Maasin City

Nelson Enojo, 1 Nov 07, 23:33

Crab Shells

Dear Mayor Gamboa,
I wish to congratulate you and your municipality. You have done a great thing for them. They must have given you the necessary support.
We have so many crabs around our coastal areas. Would you please mind to give us the information leading to the processing of the crab shells.
Thank you and congratulations once more.
Bye
Ndeye M Corr-Sarr
The Gambia

NDEYE M CORR-SARR, 6 Nov 07, 11:20
Needs
Advice - engineering, Advice - production, processing