III. SMOKING

In this section, a comparison is made between smoking/drying using a traditional oven and the improved Altona-type oven. This comparison is based on data from FAO (1971). The traditional process is analysed assuming a daily input of 100 kg fresh fish and an average processing time of 3 days. Two scales of Altona-type ovens are assessed, with inputs of 270 kg (a single oven) and 1,080 kg a day (4 ovens), the average processing time being 15 hours. It is assumed that the smoked product yield is 33%, and that production takes place for 200 working days per year.

The levels of fixed and variable costs associated with these processes are presented in Table V.6, V.7 and V.8.

Table V.6.
Production of smoked fish: Investment costs
(US$, valid for 1971)

Daily input fresh fish	Traditional	Altona
	100 kg	270 kg	1,080 kg
Land	200 (400 m2)	200 (400 m2)	250 (500 m2)
Buildings (drying shed, stores, etc.)	600 (40 m2)	3,000 (40 m2)	6,000 (80 m2)
Equipment (ovens and misc. equipment)	130	400	1,400
Contingencies (10% of above)	90	360	770
TOTAL	1,020	3,960	8,420

Table V.7.
Production of smoked fish; Annual fixed costs
(US$ valid for 1971)

Daily input fresh fish	Traditional	Altona
	100 kg	270 kg	1,080 kg
Depreciation1	50	160	380
Interest on fixed capital (8%)	80	320	670
Interest on working capital (8%)2	40	60	230
Permanent labour (1 manager)	1,200	2,000	2,000
Insurance (1½% of investment costs)	10	60	130
Maintenance and repairs (5% of investment costs)	50	200	420
TOTAL	1,430	2,800	3,830

Notes:

¹ 4% of building costs + 20% of equipment costs for traditional kiln or + 10% equipment costs for Altona kiln.

² Working capital is equal to approximately 5% of variable costs.

Table V.8.
Production of smoked fish: Annual variable costs
(US$ valid for 1971)

Daily input fresh fish	Traditional	Altona
	100 kg	270 kg	1,080 kg
Fish (at $200 per tonne)	4,000	10,800	43,200
Firewood	3,900	1,620	6,480
Labour	960	1,440	3,840
Packaging	260	700	2,800
TOTAL	9,120	14,560	56,320

Notes:

¹ Traditional: 13 m³ per tonne of fresh fish. Altona: 2 m³ per tonne of fresh fish. At $15 per m³.

² Traditional: 2 labourers Altona (270 kg): 3 labourers Altona (1,080 kg): 8 labourers.

³ Polythene bags - in some cases may be substituted by other packaging.

Costs per tonne of finished product are presented in Table V.9 below, with output per man-day of direct labour.

The results of this analysis show that, in terms of both fixed and variable costs, the use of an Altona type oven is cheaper than that of traditional ovens. These results hold despite the considerably higher capital cost associated with the Altona type oven. This is not surprising since the Altona-type oven, although more refined than traditional ovens, still uses basically traditional materials. In terms of variable costs, the greater efficiency of throughput enables a higher output per man to be obtained and hence savings in direct labour costs. Of particular importance, however, is the fact that considerable reductions are made in the use of firewood. This not only reduces the cost of smoking but is also important from the environmental point of view as in some locations wood supplies have been severely depleted. At the same time, continued use of a traditional resource means that local employment in fuel gathering is not seriously affected and foreign exchange is not required to purchase alternative petroleum energy sources. The analysis also shows that when four Altona-type ovens are used, further savings in costs are made primarily due to a less than proportionate increase in fixed costs and direct labour requirements. There are a number of other kiln designs available which also offer the potential for similar savings to those outlined above.

Table V.9.
Production of smoked fish: Cost per tonne and output per man-day

Fresh fish daily input (kg)	Traditional	Altona
	100 kg	270 kg	1,080 kg
Finished product (tonnes of fish per year)	7	18	71
Fixed costs per tonne ($)	204	156	54
Variable costs per tonne ($)	1,303	809	793
Total costs per tonne ($)	1,507	965	847
Man-days direct labour	400	600	1,600
Output (kg/man-day)	17	30	44

Some of these have been discussed in Chapter III (e.g. Roger’s smoke house, Ivory Coast kiln, etc.).