Segment: Recirculating Aquaculture System - The Technology That Cuts Water Costs and Scales Profit

Summary

Konnected Minds Podcast with Derrick Abaitey
Segment: Recirculating Aquaculture System – The Technology That Cuts Water Costs and Scales Profit
Date: April 30, 2026

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Episode Overview

This episode explores the practicalities and profitability of catfish farming in Ghana (and West Africa), with a particular focus on the cutting-edge role of Recirculating Aquaculture Systems (RAS). Host Derrick Abaitey and his guest (Speaker A) break down the economics of fish farming, scaling strategies, regulatory hurdles, and technological innovations like RAS that help cut costs and maximize returns. The goal is to provide both newcomers and seasoned entrepreneurs with insight into building a modern aquaculture business that's both profitable and sustainable.

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Key Discussion Points

1. Business Strategy in Catfish Farming

• Marketing and Scaling:
  Speaker A emphasizes prioritizing marketing and cost control over in-house feed production due to limited resources. Buying feed from established companies is more manageable unless operating at a very large scale.
  • "If Ranan or Beacon Hill can provide me with feed, I'll buy from them. Then how do I lower my cost? It's just scale. You need the scale." [00:26]
• Scale as a Profit Lever:
  • Returns in fish farming are heavily influenced by operational scale. Larger purchases of feed provide leverage over suppliers and reduce costs.
  • "If you're doing 1,000, you're going to be in trouble. But if you're doing 10,000 tons, if you're doing 50,000 tons, you have leverage..." [00:38]
• Economic Analogy:
  • Drawing from industrial and retail analogies, Speaker A explains how high turnover with slim margins (like retailers) can yield high profitability, while high-margin/low-turnover businesses (like robot makers) rely on premium pricing.
  • "When you multiply your operating profit margin by asset turnover, you get the profitability return on assets." [01:02]

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2. Barriers to Entry – Capital, Equipment, and Export

• Starting Small vs. Going Big:
  • Equipment for modern drying and processing is expensive ("very expensive" [02:10]), but small-scale entry is possible, allowing gradual upgrades.
  • "You can, you start small, right...as you make money from the local market, you upgrade yourself." [02:32]
• Regulations for Export – Food Safety:
  • European markets test for Polycyclic Aromatic Hydrocarbons (PAH), which can be high if fish is smoked with firewood—posing health and export risks.
    • "When they take it to Europe, they use a swab to...test and say, oh, the level is too high...So I decided to use this machine to dry it so...it cannot be lethal." [03:00]

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3. Profitability of Fish Farming

• Is Catfish Farming Profitable?
  • Direct answer for the aspiring young African entrepreneur: "Yes, it's profitable." [04:24]
• Market Demand:
  • Tilapia dominates the Ghanaian market; catfish is seen as a niche, but demand is growing, especially for dried catfish in West African and diaspora cuisines.
  • "Ghanaians are waking up to the fact that it has a lot of meat, it's not as bony as tilapia...the demand is actually growing." [04:43]
• Licensing and Compliance:
  • Details on required permits:
    • Fisheries Commission (grow-out & hatchery): ≈1,000 cedis [06:40]
    • EPA (environmental): up to 20,000 cedis, depending on capacity [06:50]
    • Water Resource Commission: additional fees if using boreholes [07:31]
  • "To set up the catfish farm you need permits from the Fisheries Commission...you also need a permit from the EPA." [05:52]

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4. Regulatory Streamlining and Farm Setup Choices

• Complexity of Regulation:
  • Multiple agencies and costly processes have traditionally made setup cumbersome, but efforts are underway to create a “one-stop shop” via the Fisheries Commission.
  • "The Minister...tried to streamline these regulations...so they want the Fisheries Commission to be a one stop shop which is very welcome for us." [07:31]
• Choosing a System: Tanks vs. Earthen Ponds vs. RAS:
  • Entrepreneurs must weigh the pros and cons of tanks, ponds, and new technologies.

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5. Recirculating Aquaculture Systems (RAS)

• Speaker A’s Approach:
  • Uses Recirculating Aquaculture Systems (RAS)
  • "I use something called the recirculating aquaculture system. RAS." [08:24]
• RAS How-It-Works:
  • Fish are grown in tanks
  • Water is filtered mechanically (to remove solids) and then biologically (to remove bacteria), allowing water to be reused.
  • "In recirculating aquaculture, I move this water into a mechanical filter...then it goes through a biological filter...where any bacteria is eliminated." [09:09]
• Water & Cost Efficiency:
  • RAS minimizes water consumption and associated costs, offering an edge for compliant, sustainable commercial operations.

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Notable Quotes & Memorable Moments

• "Scale is very important in our industry." – Speaker A [01:16]
• "You always don't have to narrow yourself to Ghana...the whole world is my market. But we go through this step by step..." – Speaker A [03:26]
• "Catfish is just a niche. However, Ghanaians are waking up to the fact that it has a lot of meat...the demand is actually growing." – Speaker A [04:43]
• "To set up the catfish farm you need permits from the Fisheries Commission..." – Speaker A [05:52]
• "I use something called the recirculating aquaculture system. RAS." – Speaker A [08:24]

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Key Timestamps

• 00:26–01:54 – Discussion on costs, scaling, and profitability in fish farming
• 02:32–03:25 – Entry-level strategies; export barriers due to food safety standards
• 04:24–05:52 – Profitability verdict and Ghanaian/West African consumer trends
• 06:38–07:40 – Regulatory and compliance costs (Fisheries, EPA, Water)
• 08:21–09:09 – Systems for farming: tanks/ponds vs. recirculating technology explained

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Conclusion

This episode provides a pragmatic guide for aspiring aquaculture entrepreneurs:

• Start small but aim to scale for true profitability
• Know your regulatory environment and prepare for the necessary permits and compliance costs
• Choose technology (like RAS) to optimize costs and meet export standards
• Market is expanding for catfish—especially value-added, export-ready products

Derrick Abaitey and his guest encourage listeners to leverage modern technology, strategic scaling, and community support to succeed in the evolving aquaculture industry.

Transcript

[A]

Sit down and think about it.

[B]

And at the moment, your plan is what you just described. Just Dry package it and then take it to the market.

[A]

Yeah. So this year our strategy is marketing. Marketing and marketing. Cutting costs. Yeah, we try to control our costs, but I don't have that managerial resource to be thinking about making my own feed.

[B]

Okay.

[A]

Because, yeah, to make your own feed, yes, you need to buy maybe maize, soybeans, blah, blah, blah, all those kind of things. But I'm thinking about my fish. So if Ranan or Beacon Hill can provide me with feed, I'll buy from them. Then how do I lower my cost? It's just scale. You need the scale. If you're doing thousand, you're going to be in trouble. But if you're doing 10,000 tons, if you're doing 50,000 tons, you have leverage over these feed companies because they know that you're going to buy from them.

[B]

Right.

[A]

So that is where in my old profession, there's something called operating profit or profit profit and then asset turnover. So when you multiply your operating profit margin by asset turnover, you get the profitability return on assets.

[B]

Right.

[A]

So you look at retailers, the margins are slim, the turnover is very high. You look at a company like maybe Fanuc, Tokyo Electron. Fanuc makes robots. So the robots are, they are not going to produce 15,000 robots per annum. No, maybe 50. So the margin is very high, but the turnover is very small. 0.50. But look at retailers, you see that the margin is maybe 2%, 3%, but the turnover is maybe 2, 3, 4 times because we buy it every day. So when you multiply this, you realize that their profitability is high. Scale is very important in our industry.

[B]

If you had not invested so much at this point, would you have been profitable if you had scaled it all the way down?

[A]

If I had not invested. But if. So you invest because take for example,

[B]

at the moment, I'm sure you're using some serious machines to dry.

[A]

Oh yeah. It's simple. Yeah, it was expensive. Very expensive.

[B]

Right. Whereas other people would be using the local way to dry and then take it to the market. Not with this sort of packaging.

[A]

Yes.

[B]

So my questioning is that somebody may not have 3 million USD to start at a scale unit.

[A]

Sure.

[B]

Right. But maybe they may have, you know, 20,000 cities to start. Would you say it to be a profitable business?

[A]

No, no. You can, you start, you start small, right. And then you, as you move up, you can upgrade your, your equipment. I know the Europeans are worried about something they called, they call a Polycyclic aromatic hydrocarbons. So the PAH is a UI chemist. So maybe you know, pa. The p. I think Pah. Okay. When you smoke the fish with firewood, it sticks on. It gets stuck on the skin of the fish.

[B]

Right.

[A]

So when they take it to Europe, they use a swab to. They just take some samples and test and say, oh, the level is too high. So if you're taking it to Europe in commercial quantities, they might not allow you to bring it because they think it causes cancer. No, I read about that before coming. So I decided to use this machine to try it so that if they test it, they might find something, but it might cannot be lethal.

[B]

Right.

[A]

So you start small, but as you make money from the local market, you upgrade yourself and then you always don't have to narrow yourself to Ghana. Okay, Ghana is my market. West Africa is my market. And then the whole world is my market. But we go through this step by step by step.

[B]

You can join the entrepreneurs community on tribe. So I'm going to put the link in the description where you can just click and join the connected minds, connected academy entrepreneurs community. So we can have course twice every month, have discussions around business. You also have access to courses and access to premium content as well. Episodes that we don't release on YouTube. You get access to that as well. There's a huge population of my audience that are young people from the age of, I think 25 to 35. These people, as I said, don't have 3 million. Right. The one question is, is catfish farming based on your research and based on what you do, is it profitable enough?

[A]

Yes, it's profitable. It is profitable. Okay. Tilapia is very popular.

[B]

Yep.

[A]

If you go into tilapia, I don't do tilapia. But just looking at what is it? Any corner you, you, you turn in Ghana, you see a banco joint. A banco joint with tilapia.

[B]

That's right.

[A]

Banco joint with tilapia. So imagine the volume of tilapia we consume every day, every week, every month, and even per annum. Now, catfish is unlike tilapia, catfish. And then Nigerians have taught us that, oh, you can actually grill catfish, so that has cotton. And then people have all these grills, fancy grills, and people are patronizing. But in the diaspora, people want catfish, dried catfish to make their benkway, to make soup. You miss that. So if you look at tilapia and catfish, catfish is just a niche. However, I think Ghanaians are waking up to the fact that it has a lot of meat it's not as bony as tilapia. So yeah, the demand is actually growing. The demand is actually growing. So if, if somebody wants to get into it. Yes, I, I will say yes, go into it. However, we have rules in Ghana.

[B]

Okay.

[A]

To go into catfish like, okay, you need to do your, your, your, your, your Japanese, you do your background research. Okay. This is where I want to have my catfish farm. This, I've done research about this area. I use Kintampo as an example. Kintampo people don't get upset with me. But to set up the catfish farm you need permits from the Fisheries Commission. I see. Yes. The Fisheries Commission has to give you a permit to, to, for the grow out and also to produce seed like at the hatchery. So there are two permits. Okay. And then you also need a permit from the epa. They do environmental, blah, blah, blah. These are not free. But the Fisheries Commission permits I think is cheap.

[B]

What sort of cost are we looking at?

[A]

Officials commission? Yeah. Pay about, probably, maybe about thousand cities. Okay. Per annum. EPA. Yeah, you get into probably 20,000.

[B]

Okay. Per annum.

[A]

Yeah, not per annum maybe. So you need to get somebody to do that research for you and that's a lot of money.

[B]

Okay.

[A]

You know, to write that report, send it to them and then they see what you are doing. So based on the capacity they are going to charge you. Yeah, it's not cheap. I don't want to bash, I'm not bashing the ep but I had my experience with them. Everything is okay now and then Water Resource Commission, if you're using Ghana water, your water bills are going to go up. So you, you pay now if you're using boreholes, the Water Resource Commission is in charge of all the water bodies in Ghana. So they're going to charge you for the water you're drawing from, from, from the ground because you're using it to, to make money.

[B]

Okay.

[A]

So you have to pay. But I don't think they are able to see all the farms using boreholes because. Okay, my farm is just by the road so you can see the Modicai farms and they walk in and yeah, you have to comply. Okay. Now the Minister, the Minister for Fisheries and Aquaculture, Mrs. Emilia Atta, when she came they tried to streamline these regulations because we had to deal with several regulators and it was really cumbersome and also very expensive. So they want the Fisheries Commission to be a one stop shop which is very welcome for us. Okay. So you have to go through all those before you set up your aquaculture farm and you have to make a decision whether you're going to use tanks or ponds. Earthen ponds.

[B]

What's the advantages and disadvantages of both?

[A]

I can talk about advantages, disadvantages. What? I use something called the recirculating aquaculture system. Ras.

[B]

Okay. Okay.

[A]

So. So I can. I can. I can talk about rust. Let's go. Okay, so in recirculating aquaculture, so the water comes into the. Into the tank, I feed the fish. So just focus on recirculating. So I feed the fish, it gets dirty, they poop into the water. Now, this water, conventionally will be flushed out into gadgets.

[B]

Yep.

[A]

Okay. But in recirculating aquaculture, I move this water into a mechanical filter where the solids are filtered, and then it goes through a biological filter. Okay. Where any bacteria is eliminated.

[B]

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