| This research examined the economics of reprocessing shrimp waste into edible breaded and battered seafood products. The proposed technology involves the extraction of broth from shrimp waste and using it to impart shrimp taste and flavour to surimi nuggets. A survey of foodservice institutions in Montreal revealed that 50% of these commercial establishments were willing to buy the product for use in their operations at a suggested wholesale/supplier's price of {dollar}4.40 per kg. Results of a Logit model indicated that price and restaurant ownership appeared to influence respondent's purchase intentions significantly. The odds-ratio in favour of a low-end, independent or family-owned restaurant adding the product to its menu was significantly greater than the odds-ratio in favour of a high-end restaurant or chain establishments buying the product for its operations. Asian restaurants were equally as likely to purchase the product as restaurants serving other menus. In general, respondents said that product taste, texture, appearance and aroma were satisfactory.; The proposed plant expansion required to include a surimi-shrimp processing line into an existing processing plant would cost {dollar}4.3 million to install in the Montreal area. Its installation would allow an interested firm to process 5000mt of surimi-shrimp nuggets from about 500mt of shrimp waste per year at {dollar}2.62/kg. Results show that if the plant operates normally for a 10-year period, it would recover initial outlay and interest payments in 4.2 years. The net present value (NPV), at a 10% rate of discount, would be about {dollar}3.12 million and the internal rate of return (IRR) would be about 25%. If raw material prices and unit product price changes within a 10% range, the feasibility of the proposal will be acceptable in some but not under all sensitivity scenarios. |
