Donnie Bunting got the inspiration for his fish farm in Jamaica from a 1978 visit to a red telapia farm in Florida that had been introduced to him by a US peace corps worker in Jamaica
Donnie Bunting: born to rear fish
Business Leader Nominee #2
Observer Business Reporter
Wednesday, March 24, 2004
The large sign on Donnie Bunting's retail outlet in Clarendon forms a backdrop for this photo.
Donovan 'Donnie' Bunting began his lifelong involvement in the fish business as a teenage hobby - breeding Siamese fighting fish and other ornamental species to sell to his high school classmates.
"From those days I was beginning to dabble and make a living from fish," remembers Bunting who, 40 years later, at age 52, is more than just a dabbler in the fish-rearing industry.
This Taiwanese paddle wheel is extremely efficient at oxygenating the ponds on the farm.
In fact, Bunting's Longville Park Farm, sprawled across 200 acres of land straddling the parishes of Clarendon and St Catherine, is Jamaica's second largest producer of freshwater fish, churning out 60 tonnes (120,000 pounds) of red telapia each month.
To consistently produce such large volume of fish, Bunting has spent the past decade investing in a technology-driven, vertically-integrated operation, that has given his company a competitive edge in the Jamaican market.
The fish are stored in fresh water without food for at least 24 hours before sale to improve their flavour.
The basic physical infrastructure at Longville Park includes 44 quarter-acre ponds that are used as nursery to breed some 600,000 juvenile fish each month - some of which are sold to other fish farms.
The fish selected to go on to the next stage of development are 'grown out' in scores of ponds with combined 45 acres of water. A series of high-powered water pumps, oxygenation mechanisms, and computer programmes ensure the optimum environment in which the fish can reach maturity. A processing plant with the capacity to handle 15 tonnes of fish in a 40-hour period, and delivery cold storage trucks complete the basic infrastructure.
Phillip Bunting (centre), marketing manager, examines a three-pound fish with Donnie Bunting and an employee.
But the real asset of Longville Park is in Bunting's head, and to a lesser extent the expertise passed on to his two sons, Phillip and Donovan St John, and the company's senior management team. It is this abundance of technical know-how, galvanised through several years of formal training, trial and error, and field experimentation that Bunting says has allowed him to continue in the business while so many others have floundered.
Bunting's formal training in agriculture was at the Summerset College of Agriculture in England in 1969 after completing studies at Campion College in Kingston.
Fish wholesaled at the farm forms the bulk of the sales from Longville park.
On his return to Jamaica, he joined the 370-acre Longville Park dairy farm owned and operated by his father, a man of Cuban descent - Juan Pablo de la Cruz Bolivar Bunting.
"I am the only one in the family that loves the country," says Bunting, the second of four siblings, and whose youngest brother Peter Bunting, the executive chairman of Dehring Bunting & Golding was last year nominated as Business Leader. "Peter is baby Bunting and I am country Bunting," he quips.
Bunting remembers his father as an unrelenting dairy farmer who allowed him to venture into small-scale fish farming in the 1970s only as an experimental means of disposing of the waste from the dairy farm by converting it into fish feed.
"At the time the fish farm was developed to solve the problem with the disposal of waste from the dairy," he says. "Far East farmers produced fish and used the waste from animal farms to produce the fish feed. That was the first attempt at food fish production - to get rid of cattle manure."
Bunting and a business partner who is now deceased built Jamaica's first commercial telapia farm - outside of government - using three half-acre ponds on the family property, which, looking back was "a big unit at the time".
According to Bunting, back in the 1970s, Jamaica did not take fish farming serious because the island "was blessed with an abundant marine fish at the time".
Moreover the species available - Mossambicus - or Black Perch, created a unique marketing challenge because of what Bunting describes as the "strange flavour" that resulted from the animals being bred in water that was "enriched with cattle manure".
But by the late 1970s the Michael Manley government began to develop greater interest in inland fish farming, with the Chinese Carp family of fish, and a vegetable-eating species from South American called Niloticus or Silver Perch emerging as the preferred options.
This effort had a "slightly better degree of success," as Bunting puts it, but still lacked commercial viability.
Bunting got his inspiration from a 1978 visit to a red telapia farm in Florida that had been introduced to him by a US peace corps worker in Jamaica. "It fooled me. I could never believe it was not sea fish," he recalls of the experience.
Fish farming started to take off in Jamaica in the 1980s when Israeli investors got involved in the business, and USAID began pumping money in the industry.
It was at this stage - in 1986 - that Bunting said he decided to enter the market as a producer of fingerlings (young fish).
"My father had no interest," he recalls.
Nevertheless, Bunting senior allowed his son to pursue the business using three half-acre ponds on the family property.
The deepening of Bunting's involvement in fish farming coincided in the late 1980s with the rapid decline in the dairy business.
"I convinced my father to allow me to put an additional seven acres in fish ponds. We had fair success, but attempts at further expansion was halted by my farther who had no interest in an industry he personally had no knowledge about."
Bunting's big step towards independence, and consolidating of his business interest in fish farming came in 1989 when a fish farm of 25 water acres in size at Hillrun in St Catherine, was repossessed by creditors and was being sold.
To pay down the deposit, Bunting borrowed money from his brother Peter, 10 years his junior who was at the time a rising star at Citibank in Kingston. The Jamaica Agriculture Development Foundation which held the lien on the $2.5-million property then transferred the asset to him as an ongoing concern.
"After 20-odd years in the dairy business I did not have any money to not make a deposit on the farm," reflected Bunting with obvious irritation.
His biggest shock came from the reaction of his father.
"When my father found out that I had bought the farm, he immediately gave me a choice of selling it back or leave his company. In five seconds I decided to leave with nothing!"
Bunting at the time was married, and was planning to develop the fish farm slowly while he continued to work and earn a steady income from the family business.
This is how he recalled the very early beginnings:
"I had no income. No place to live. Luckily we got a six-month moratorium from the JADF, and NCB loaned us money for a townhouse. My wife decided to keep herself and our children on her salary. This freed me up, and I went to the farm with two men. All of us ate out of the same pot in six months to start the farm. We had no working capital. It was a slow process. I had to cut my lifestyle down to zero at the time to survive. However, in the next two years I made more money than I had made in all my years of dairy farming combined."
By the time Jamaica Broilers developed its contract programme for fish farmers in the early 1990s, Bunting was a fairly larger producer of both fingerlings and fully-grown fish.
Bunting said he was "pressured into being a contract farmer" by Broilers which he charged with wanting "to control the price of fingerlings".
With the death of his father in 1992, Bunting was invited to return to the family business, a task he said he undertook "on condition that we would expand into fish farming because I knew dairy farming was on the last lap". The dairy business, he reckoned, was being pursued by his family "primarily because of sentiment".
Bunting then sold the Hillrun farm which by then was producing 1.5 tonnes of fish per month, for what he said was "a huge profit" and decided to develop the fish farm on 25 per cent of the land that had been bequeathed to him at Longville Park.
In the beginning he attempted to manage both the dairy farm and fish business simultaneously, but said that "the dairy business had become a liability and was subsidised by the fish sector".
Shortly after, the dairy side of the business collapsed.
Having moved the contract with Jamaica Broilers from Hillrun to Longville Farm, Bunting saw a major expansion in the business between 1992 and 1999, which enabled him by November that year, to purchase from other siblings 25 per cent more of the family land, taking his personal holding to 50 per cent.
As a measure of the rapid growth in the business, Bunting points to 1993 - his first full year back at Longville when the farm produced two tonnes of fish per month. By 2001, the output had skyrocketed 30-fold to 60 tonnes per month, representing 50 per cent of the entire contract farm output in Jamaica.
By 2001, a major realignment in the revenue stream of the industry was taking hold. Bunting pointed out that in 1992, the price paid to contract farmers represented 80 per cent of Broiler's wholesale price. By 2001 this had dropped to 40 per cent.
"In US terms we were getting less in 2001 than in 1992,"he explained.
The upshot is that several contract farmers were forced to exit the business, while as a survival strategy, Bunting opted to rapidly grow his volume to compensate for the falling margins.
Last year, Bunting, at the height of his production, had a bitter fall-out with Broilers over the terms of his supply contract. Under that contract, Broilers provided the feed and the young fish, which were grown in Bunting's ponds and then resold to Broilers when fully grown and ready for the market.
"A sealing was placed on production by Broilers because of its inability to market the fish," said Bunting. "It eventually forced me into a decision to go on my own and market my fish myself. The decision was made one year ago. Broilers said I could not survive for three months without them."
In the beginning it appeared so. Bunting's output fell precipitously by half, well below his break-even point of the operation.
Back once again to the drawing board, Bunting was forced to borrow what he said was "50 per cent interest money" to quickly develop his own hatchery, and the marketing infrastructure - service that Broliers had provided under the contract.
The experience, he recounts, "was similar to the start of the Hillrun farm" with Bunting having to now create a fully integrated production line without the supplier credit to which he had become accustomed.
"Under the contract agreement Broilers would bring the young fish, provide the feed on credit and each week they would calculate the balance," explained Bunting.
"When I pulled out of the contract I had no infrastructure to market fish, produce baby fish, or harvest fish. Additionally, I was faced with having to buy feed with upfront cash, coming from a situation of five-month credit."
Bunting said he had to be "very inventive to raise cash", including selling down inventory and seeking out informal capital sources in the face of unresponsiveness of banks he had approached for funding.
But the experience allowed Bunting to reshape his business model, and to place his company on a path towards sustained viability.
"I succeeded in a one-year period to move from being a broke contract farmer to now run a full-fledged hatchery, to optimise growth operation and successfully market my own fish through niche marketing," he told the Business Observer.
Under the current operation, Longville Park needs to produce some 44 tonnes of fish each month to break even.
The output for this year will average 60 tonnes per month, according to Bunting. Turnover, he says, is just under $7 million per month.
The farm employs 43 workers directly, with another 20 or so employed on a regular basis as welders, truckers, electricians, mechanics, security personnel.
The well-defined management structure is headed by general manager, Ricardo Brown. Financial controller is Kenneth Mitchell. Orville Main, the operations manager, is in charge of the field staff.
Bunting's son Phillip is marketing manager, while the nursery is run by another son, Donovan St John. Their remuneration, according to Bunting, is based on the efficiency of their operation.
The Longville Park operation involves the delivery of "totally fresh product" to retail outlets mainly in Kingston, St Catherine and Clarendon, allowing the company to saturate these markets before looking elsewhere.
About 30 distributors and informal commercial businesspersons buy directly from the farm while scores others buy from an air-conditioned retail operation at the farm which, according to Bunting, "sells at better than wholesale prices seven days per week". Bunting says that the totally integrated approach to the fish production allows the company to minimise cost and be competitive in the market.
But the main challenges faced by the operation are technical in nature, which Bunting has tried to solve through years of investment in technology and development of know-how.
"Feed represents 50 per cent of our costs," he explains. "Our biggest challenge is to get the most efficient use of our feed. Our target is to use less than two pound of feed per pound of fish."
The integrated approach being practised at Longville Park means that each fish is moved from pond to pond seven times throughout its nine-month life cycle, and a process that allows the selection of only the best fish to go forward into full production.
"Reproduction is the bane of fish farming because some of the fish which can't go forward compete for oxygen and feed against the ones you want to produce," explains Bunting. "Selective nets allow us to take out the valuable ones and leave behind the unwanted ones. Those that are genetically pre-programmed to be stunted have to be culled out."
While Longville Park farm uses several Taiwanese paddle wheels, to produce a very efficient transfer of oxygen per horsepower into the ponds, rapid water exchange is used to reduce harmful ammonia that is built up with each increase in the capacity of the ponds.
Bunting says that balancing pond capacity, with the right oxygen and ammonia levels, as well as producing better quality babies through eugenics is a 24 hour per day seven days per week task.
"Every other Monday we take a net sample for the various sizes, count them and weigh them," he explains. "This information with oxygen and turbidity measurements are entered into the computers and from these, calculations are made to estimate how much feed is required, hours of paddle wheel activities needed, how much horsepower is necessary for the water exchange. We can then generate gross harvest forecast, which allows us to make our marketing plans."
Each pond, he says, has an individual database "so that you get more accurate forecast which is issued to the managers".
One major asset that contributes to the viability of this operation is what Bunting describes as "the pristine clear water from a well 60 feet below the surface and stream that emerges from under the property".
Both water sources are filtered through limestone aquifers, with two 40-horsepower water pumps used to supply 360 gallons per minute to the ponds that together contain 55 million gallons of water.
Bunting says that the water pump is turned on only during JPSCo's off peak demand periods, under the time-of-day arrangement that helps to keep the electricity bill within $800,000 per month.
The next phase of development for this business, according to the proprietor, will be the adoption of new technology - super-intensive forms of production through small, deep concrete containers that will enable his farm to avoid some of the economic and social hazards now inherent in the current approach.
For example, only about 30 to 40 per cent of the fingerlings produced will actually reach maturity - the result of pests like birds, cats, alligators competing for the fish, as well as several being rejected as unfit to complete the growth cycle.
In the end though, Bunting believes that in this business there is, ultimately, no substitute for hard work and a keen pair of eyes.
"You have to keep very close to the business or you can't survive," he advises.
