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THE ECONOMIC FEASIBILITY OF A COMMERCIAL, SCALE MANILA CLAM (Tclpesphi@pinmum) HATCHERY ON VANCOUVER ISLAND by William Alistair Struthers B. Sc. (Hons), Mount AUison University, 1993 PROFESSIONAL PAPER SUBMITTED IN PARTIAL mTLFILMENT OF THE REQUlREMENTS FOR THE DEGREE OF MASTER OF AQUACULTURE in the Department of Biological Sciences O William Alistair Struthers 1997 SIMON FRASER UNIVERSITY February 1997 Aii rïghts reserved. This work rnay not be reproduced in whole or in part, by photocopy or other means, without the permission of the author. 1+1 National Library *,a& BiiliotMque nationale du Canada Acquisitions and Bibliographie Services Acquisitions et seMces bibliographiques 395 WeIlnrgton Street ûüawaON KlAON4 Canada 395. rue Wellington OtlawaON KlAON4 Canada The author has granted a nonexclusive licence ailowing the Nationai Lïbrary of Canada to reproduce, loan, distri'bute or seil copies of thîs thesis in microform, paper or electronic formats. L'auteur a accordé une licence non exclusive permettant a la Bibliothèque nationale du Canada de reproduire, prêter, distn'buer ou vendre des copies de cette thèse sous la forme de microfiche/^ de reproduction sur papier ou sur format électronique. The author retains ownership of the copyright in this thesis. Neither the thesis nor subsbntial extracts fiom it may be p ~ t e or d otherwise reproduced without the author's permission. L'auteur conserve la propriété du droit d'auteur qui protège cette thèse. Ni la thèse ni des extraits substantieIs de celle-ci ne doivent être imprimes ou autrement reproduits sans son autorisation. The Manila clam, Tapes philippinanun (Adams and Reeve, MO), supports a valuable recreationd and commercial fishery dong the West Coast of Canada However, due to increased market demand and human encroachment, naturai stocks are unable to continue supporting such a fishery. Depletion of this resource has created an intense interest in Manila clam mariculture. This has been prompted in part by the British Columbia govemment's attempts to optimise economic yields from shellfish producing foreshore leases. Procedures for spawning, Iarval rearing, nursery cultivation, and grow-out have been proven and are well established. This paper is an examination of the feasibility of estabtishing a Manila clam hatchery on Vancouver Island, British Columbia Biological aspects of, culture technology of, and financial considerations of the proposed project were examined While displaying sensitivities to downward trends in the price of seed clams and decreased levels of production, the proposed project is barely financiaily viable at the projected levels of output. The future of such an enterprise looks promising should the area designated for clam culture double within the next four to five years, as forecasted by government and industry projections. iii Dedication With Love to my parents, thanks for watching over me Tabk of Contents .. Approval.......................................................................................................................... 11 ... Abstract ........................................................................................................................... iii Dedication ........................................................................................................................ iv ............................................................................................................ Table of Contents v .. Table of Tables................................................................................................................ vil ... . . ........................................................................................ vu1 Table of Figures ................... 1.0 Introduction .............................................................................................................. 1 1.1 Clam Fisheries........................................................................................................... 2 1.1.2 British Columbia Clam Fishery .................................................... 5 1.2 History of Clam Culture......................................... ..............7 10 ......................................................................... 1.3 Status of Clam Aquaculture 1.3.1 Clam Aquaculture in BC ............................................................... 12 2.0 The Biology of Tapes p h i l i p p i m m ....................................................................... 15 2.1 Nomenclature ............................................................................................... 15 2.2 Ecological Requirements ............................. . ........................................ 15 2.3 Spawning Cycle ........................................................................................... 17 2.4 k a 1 Development ..................................................................................... 19 2.5 Growth ......................................................................................................... 20 2.6 Predation ...................................................................................................... 22 2.7 Diseases and Parasites................................................................................ 23 2.7.1 Parasites & Symbionts in Mada Clams....................................... 24 2.7.2 Disease Causing Agents in the Genus Tapes ................................ 26 2.8 Research and Development......................................................................... 27 2.8.1 Polyploid Roduction..................................................................... 27 2.8.2 Cryopresewation of Gametes................... . ............................... 29 ................................ 31 3.0 Manila Clam Culture & Husbandry ................................... 3.1 Hatchery Phase ............................................................................................. 31 3.1.1 Water Quality & Hygiene.............................................................. 31 3.1.2 Broodstock Selectioo & Conditioning ......................................... 35 3.1.3 Spawning & Fertilization....................................................... 40 3.1.4 Lama1 Rearing Methods............ . . ............. . . ............................. 43 3.1.5 Metamorphosis and Setting............................... . .45 3.1.6 Alternative Feed Sources .......................................................... 49 3.1.7 CuUing............ ............................................................................. 51 ........................................52 3.1.8 Algal Culture Methods........*.......... . . 3.2 Nursery Culture............................................................................................ 56 3.3 Grow-Out ..................................................................................................... 60 4.0 The Operating Environment..................................................................................... 62 4.1 The Market ................................................................................................... 62 4.2 Target Market............................................................................................... 62 4.3 Cornpetitors .................................................................................................. 63 4.4 Key Assets and S M s ................................................................................... 64 . . . . .... . . 5.0 Proposed Project ........................~.........~................................................................... 64 5.1 System Design.............................................................................................. 64 5.1.1 Permanent Structures ................................................................ 65 5.1.2 HOOC PIan ...................................................................................... 65 5.2 Water Sources and Filtration........................................................... 1............ 66 5.3 Nursery ...~.....................................................................................................66 6.0 Financiai Analysis .................................................................................................... 67 6.1 Estimate of Capital Expenditures................................................................. 67 6.2 Financial & B iological Assumptions ........................................................... 67 6.3 Pro-Forma Income Statement ...................................................................... 72 6.4 Pro-FormaCash Flow Schedule .................................................................. 72 6.5 Pro-Forma Balance Sheet............................................................................. 76 6.6 Financial Summary ..................... . . ...................................................... 76 6.7 Sensitivity Analyses ..................................................................................... 79 6.7.1 Disaster Scenario........................................................................... 81 7.0 Eüsk Assessrnent ...................................................................................................... 83 8.0 Surnmary .................... . .................~.......~................................................................ 86 Bibliography .................................................................................................................... 88 Appendix A ..................... . ........................................................................................... 98 Appendix B ................................................... ........................................................ 103 Appendix C ..................................................... . . . ....................................................... 104 Tabie of Tables ...........*...........*...*......3 Table 1. Clam species of global economic importance.......... . Table 2. Genus and species narnes of the Manila clam.................................................. 16 Table 3 . Prevaience of parasites and symbionts in Manila clams .................................. 24 Table 4. Diseases affecting the genera Tapes,Ruditapes and Venempis ......................26 Table 5 . Prevention and management of bacterial infections .1....................**................ 33 Table 6. Critical factors associated with various nursery systems ................................. 57 Table 7. Initial invatment and capital assests scheduie ................................................ 68 Table 8. Annuai depreciation schedule of capital assets ................................................ 70 ..............*............73 Table 9. 10 year pro-forma income statement............... Table 10. Annual operating expenses ......................................................................... 74 Table 11. 10 year pro-forma cash fiow ................................................................ 75 Table 12. 10 year pro-fonna balance sheet .................................................................... 77 Table 13. Financial summary......................................................................................... 78 Table 14. Sensitivity anaiysis for changes in seliing pnce............................................. 80 Table 15. Sensitivity andysis for changes in level of production.................................. 80 Table 16. Disaster summary ......................................................................................... 82 Table of Fieures Fig. 1. Twenty year global landings ............................................................................... 4 Fig. 2. Price per kiIogram of Manila clams.................................................................... 6 Fig.3 . Wild Manila clam hwest................................................................................... 13 Fig.4. Manila clam growth rates ................................................................................... 21 1.0 Introduction En recent yeacs an increased interest in the culture of marine invertebrates hm bbeen apparent around the globe (Manzi, 1985; Manzi and Castagna, 1989a; Pillay, 1990). Increased natural exploitation has resulted in increased market demand, and hence escalated prices (Manzi and Castagna, 1989a). Molluscs have traditionaiiy k e n considered an inexpensive food item. This is no longer the case, especiaiiy in Europe, where some species are now considered luxury foods. Attention ha k e n focused on culturing Iow trophic level organisms, with success k i n g observed in oysters, clams, mussels and scailops. Bivalve moiluscs are particularly enticing due to the fact that food, spat for gow-out systems, and waste removal may be provided by nature at Lttle or no cost to the operator (Webber and Riordon, 1977). Clams in particular lend themselves to commercial mariculture opportunities. Clams support commercial, sport, and subsistence fisheries, aii of which have seen a decline in natural stocks over the past numkr of years (Mami, 1985; Manzi and Castagna, 1989a). This deciine in populations is due to a number of reasons, not the least of which are pollution and overfishing, The resuiting decline in clam stocks and strong market demand have sparked an intense interest in clam aquaculture over the past few years. Along the coasts of North America three species of clams have received much attention fiom commercial culturalists: the hard clam, Mercenaria mercenaria, distributed dong the Atlantic coast fiom the Gulf of St. Lawrence to the Gulf of Mexico (Manzi, 1985); the soft shelled cIarn, Mya arenaria, occuning from Labrador to South Carolina (Manzi and Castagna, 1989a); and the Manila clam, Tapes philippinarum, found dong the Pacific coast from British Columbia to California (Quayle and Bourne, 1972; Bourne, 1989). In North America, wildstock harvests still account for approximately 90% of clam production (Manzi and Castagna, 1989a). Despite the fact that the technoIogy has k e n available for nearly two decades, only Iirnited commercial application has thus fu been apparent, with the majority of effort being concentrated in the research and development secton ( M a i , 1985). In an attempt to achieve p a t e r economic yield from oyster leases, many British Columbian oyster growers are turning to Manila clam culture in the previously undemtilized upper niches of their foreshore lease (Roland and Gubbels, 1990; Heath and Gubbels, 1993). Manila clam production in British Columbia for 1993 totalled 400 tonnes, with a f m gate value of $1.5 million (Anon., 1996a). As a result of increased interest, Manila clam production is projected to mach 7,500 tonnes with a resulting value of $25 million by the year 2000 (Anon., 1995). This trend toward diversification will bnng with it an increased demand for Manila clam seed. With the exception of two small scale operations located on Vancouver Island, no large scde commercial hatcheries exist in British Columbia. M d a clam seed for Vancouver Island is currently suppiied by the aforementioned operatious and imports fkom the States of Washington or California (Brian Kingzett, BC SheWxsh Growers Association. personai communication). As a result, an opportunity exists for a large scale hatchery located on Vancouver Island. Vancouver Island would be the location of choice, as the majority of Manila clam growen are located on the island. The purpose of this project is to review current hatchery technology and assess the economic viability of a Manüa clam hatchery supplying seed to growers in British Columbia 1.1 Clam Fisheries The culture of molluscs currently accounts for one third of the total world aquaculture production, with clams, cockles and arkshells accounting for approximately 22% of total molluscan production (Anon. 1994; Anon. 1996b). In an attempt io place the global clam fishery into perspective, Table 1 lists the most commonly fished species of clams, as well as indicating whether these species are of current or potentid interest to aquaculturalists. Reasons behind some species not k i n g considered for aquaculture are a lack of understanding of the complete Life cycle, technical limitations, or low market price or demand (Boume,1989; Manzi and Castapa, 1989a)- There is, however, some diiculty in obtaining accurate aquaculture production nurnbers due to inconsistencies in reporting techniques among various counuies (Anon. 1994). World-wide landings (both cultured and traditional catches) have slowly nsen from 150 thousand metric tonnes per year in the early 1960's to an estirnated 1.7 million metric tonnes in 1992 (Fig.1). Table 1. Clam species of global economic importance (Manzi and Castagna, 1989a; Anon. 1994). 'spcies name Common Name Aquacultum Location conslderation Anadara subcrenata 'Mogai"clam Aria spp. arkshell clams Arctica islandica ocean quahog common cockle Cardium edule Corbiculajaponka Mactra sachalinensis hen clam hard clam Mercenana mercenaria Meretrix spp. hard clam Meretrix lusoria Japanese hard clam "Machanclam Mesodesma donacium Mya arenana soft shell clam Panopea generosa geoduck clam shortneck clams Paphia spp. Protothaca sfaminea little neck clam Protothaca thaca "Taca" clam SaXidomus giganteus butter clam Spisula solidissima surf clam Tapes philippinarum Manila clam Y= yes no no Yes no no Y= 1~ridacnagigas yes lgiant clam Japan, China Mexico,Korea, Thailand Canada, USA Europe Japan, Korea Japan, Korea USA, Canada YeS no no YeS Y= Y= Y= lndonesia Japan, Korea - USA, Canada, France, Japan USA, Canada Malaysia, Philippines Canada, USA Chle, Peru Canada, USA Canada, USA Canada, USA, Japan, Korea Europe South Pacific The most recently available global production statistics are those compiled by the Food and AgricuIture Organization of the United Nations for 1992. During this year, the estimated total global aquaculture production of clams (including cockles and arkstiells) was 765 thousand metric tonnes (Anon., 1994)- Projected global aquaculture production is expected to reach 1 miilion metric tonnes by the turn of the century, and 2.2 miIlion metric tonnes by 2025 (Anon., 1996b). As a result of unrelenting human pressures, seafood products have been turned into an unsustainable resource. By the yeai 2010, it is predicted that aquaculture wilI produce upwards of 40% of aiI seafood for human consumption, resulting in greater than half the value of the global catch (Anon., 1996b). Fish is currentiy the fifth most important agriculturai product, accounting for 7.5% of totai world-food production, and is relied on by more than one billion people as a primary source of animal protein (Anon., 1994). Not surprisingly, world production is currentiy centered around the following big cash species: shrirnp, salrnon, tilapia, and carp (Anon., 1996b). 1 Figure: 1. Twenty year global clam catches (including cockies and arkshells) (Anon. 1994) As natural mollusc stocks are depIeted, either as a result of overfishing or human encroachment, aquaculture is projected to increase production (Anon. 1996b). Totd world mollusc production in 1992 was 3.5 miilion mefric tonnes (Anon. 1994), representing 18% of total global aquaculture production. Production can further be broken down as follows (Anon. 1994): mussels 1,086,OOO MT oysters 954,000 MT clams, cockles and arkshelis 765,000 MT scallops and pectens 549,000 MT other moliuscs 147,000 MT. 1.1.2 British Columbia Clam Fisbery The commercial clam fishery in British Columbia has been in existance since the end of the 19th century (Quayle and Borne, 1972), and of the over 800 molluscan species @oume, 1989) occuring off the Pacific coast, only a few are currently of commercial interest. The five species of clams of most commercial importance are: butter clam (S. giganteus); littleneck clam (P. staminea); Manila clam (T.philippinarum); razor clam (Siliqua patula); and geoduck clam (P. generosa) (Schink et al, 1983; Bourne, 1989; Harbo, 1990). Minor landings of horseclarns (Tresus capax and T. nuttallfi, cockles (Cfinocardium nutrallrJ, and sofi-shelled clams (M. arenaria) also occur (Bourne, 1989). Butter clams (S. giganteus) were the mainstay of the British Columbia clam fishery for the first half of the 2ûth century (Bourne, 1989). Recently, landings have decreased due to high processing costs and lower market demand. According to Boume (1989) reductions in some populations may be attributable to low rec~itmentlevels. Fig. 2. Landed catch value per kilogram of Manila clams (Anon. 1996c) Two species of steamer clams are harvested in BC, the native IittIeneck (P. sramineu) and the Manila clam (T.philippinarum) (Boume, 1989). The native iittleneck occurs siightIy lower in the intertidal zone than the Manila clam (Schink et al, 1983; Chew, 1989). Landings of both species were low until a strong market demand for steamer clams during the mid 1970's created an interest in the commercial harvest of these clams (Bourne, 1989). A strong demand is stiil evident from the landed price per kilogram (Fig. 2), which continues to rise, no doubt the result of limited wild harvests matched by a strong market demand. Steamer clams, especially the Manila clam, now constitute the majority of clam Iandings in the province (Anon. 1996~). The razor dam (S. patula) fishery consists of a small commercial fishery on the north coast of the Queen Charlotte Islands, but accounts for less than 100 tonnes per annum. The majority of this catch is used as bait in the commercial crab fishery (Bourne, 1989) 1.2 =tory of Clam Culture References to shellfish culture c m be found dating back to 2000 BC in Eastern civilizations and 400 BC in Greek and Roman periods (Manzi, 1985). Shellfish culture probably was introduced to North Arnerica by euly European settlers who practised oyster culture (Manzi and Castagna, 1989a). Clam culture is a f&irIy new activity, as up untiI recently, natural stocks were abundant enough to supply harvesting needs. It is thought that a simplified form of clam culture may have been practised by aboriginal people and early settlers (Manzi and Castagna, 1989a). In this crude f o m of culture, cIams were harvested from one location and transplanted to a more convenient location for stonge. Although clam culture has been practised in crude manners for centuries, it has ody been in the last four decades that the technological breakthroughs that have ailowed clam culture to enter the commercial realm have been realised (Manzi, 1985; Chew, 1989; Manzi and Castagna, 1989a). The majority of work done in the clam aquaculture field bas been conducted on the east Coast of the United States, and focused on the commerciaUy important species M. mercenaria and M. arenaria. The following overview of the history of clam culture draws heavily from the discussion by Manzi and Castagna (1989a). The first truly successful culture attempt in which a mollusc was manipulated to spawn was achieved in 1879 by W i a m Brooks. In his experiments, Brooks was able to spawn oysters, fertilize the eggs, and rear the lame through to metamorphosis (Manzi and Castagna, l989a). The first successful atternpts at culturing clams were achieved by William Wells during the early 1920s (Manzi and Castagna, 1989a). Wells was able to successfully grow quahogs (M. mercenaria) and the soft clam (M. arenaria), as well as mussels, oysters, and bay scallops. WelIs' achievements represent the fmt recorded success of clam culture in North America Wells noticed microscopie animais in the sediment of centrifuged seawater, which he concluded to be oyster Iarvae- After resuspending the sedirnent in naturai seawater and fading in attempts to grow hem, Wells obtained oyster garnetes using the techniques pioneered by Brooks. These garnetes were placed in clarified seawater and larvae successfully grown to metamorphosis (Manzi and Castagna, 1989a). Most of the work conducted by Wells focused on oysters, which he was successfully able grow to market size. No other work was conducted in this area und the eady 1950's when Victor Loosanoff renewed interest in bivalve hatchery techniques. Loosanoff pioneered many of the currenc day hatchery techniques, some of which include: methods for conditioning broodstock, the use of thermal shock to induce spawning, the use of unicellular algae as feed for larvae, and methods for controlling disease within the hatchery (Loosanoff and Davis, 1963). The techniques pioneered by Loosanoff are often referred to as the Milford Laboratory techniques (after the US Fish and Wildlife Service in Milford, Connecticut). The first commercial clam hatchery in North Arnenca was started in Atlantic, Virginia by Richard Kelly in the late 1950's (Mami and Castagna, 1989a). Kelly used the Milford techniques, and later modified them by replacing uniceliuIar algal culture with fertilized and filtered seawater, to culture M. mercenaria. Once set, clams were held in wooden trays containing beach substrate, and seawater purnped through them. No supplernental feeding was carried out. Clams were planted to the beach when they had reached a size of 3 to 4 mm. Survival rates of planted seed are unavailable, however, it is thought mortality rates were high due to extensive predation. In an attempt to combat predation, KeIly constructed small stockades of pickets to exclude crabs (Manzi and Castagna, 1989a). The effectiveness of these anti-predator measures are not reported in the literature. - A second commercial hatchery was started by Joseph Glancy in 1959 on Great South Bay at West SayviIle, New York (Manzi and Castagna, 1989a). This hatchery produced both clams (M. mercenaria) and oysters (Crassosrrea virginica). Having been a student of Wells, Glancy adopted both the Milford techniques and those pioneered by his former teacher. Following some experimentation, the techniques involving uniceIlular aIgal culture were deemed too costly and complicated, and dropped, Glancy is credited with developing a low cost method of algal production. The Glancy method of algal production involved c l m n g seawater in order to remove unwanted zoopIankton and di&oms, and aiiowing the remaining phytoplankton to bloom in a greenhouse. Glancy is viewed as king extremely influentid in the development of the cIam culture industry (Manzi and Castagna, 1989a). Nearly al1 of the early east coast clam hatcheries started off using the Glancy method of algal production. The next advancement in hatchery technology was achieved by the Bluepoints Oyster Company, of West Sayville, New York. This Company started off using the Glancy method, but later switched to the production of unicellular algd culture (Manzi and Castagna, 1989a). The unique aspect of their production was the use of a saltwater well to supply abiotic water to the hatchery for use in algai culture and larval production. While a well supply of seawater offered the advantage of k i n g free from bacteria, it posed the disadvantage of k i n g low in nutrients and dissolved organic matter. As a result, the addition of nuttients to larval culture was necessary. Simiiar to many east coast shellfish companies, the Bluepoints Oyster Company cultufed both clams (M. mercenaria) and oysters (C. virginica). During this sarne period, several other cornpanies had dso started up commercial scaIe clam hatcheries, cornbining both the Glancy method and unicellular algae feeding (Manzi and Castagna, 1989a). These cornpanies are of particular importance due to the ongoing refining that took place throughout their operation. Of particular note is'the Long Island Oyster Company of Long IsIand, New York, which incorporated the thermal effluent from an electricai power generating plant in order to increase the rate of growth of juveniles ( M m i and Castagna, 1989a). State hatcheries within the U.S. have also played an important role in the developrnent of clam culture technology. Many of these hatcheries were used as research centers, and resulted in a large number of scientifc and econornic papers conceming clam aquaculture. Over the last two decades, research has focused on the field grow-out portion of clam aquaculture and the controlling of costs in this area (Anderson et al, 1982; Chew, 1989; Spencer et al, 1992). Early attempts at field grow-out involved no forrn of predator protection and m l t e d in high mortality rates (Chew, 1989). Following the development of low cost predator netting to reduce mortalities, the commercial scale undertaking of clam aquaculture became economically feasible. The only remaining problem facing commercial clam producers was the high degree of mortality associated with planting seed less than 6 mm in size. Mortality is significady less with seed 8 - 10 mm than smaller seed (Chew, 1989). As hatcheries cannot afFord to grow clam seed to this size in an intensive system, fieId nursery systerns have been deve1ope.d in the last decade (Claus, 1981; Manzi, 1985; Manzi and Castagna, 1989a). Several types of nursery methods have been used, with most operations utilize either an upwelling or downwelling system. 1.3 Status of Chm Aquaculture As a result of king popular research organisms, due maidy to their ubiquitous nature and comrnercid importance, a significant amount of information regarding the biology, environmental requirements and ecologicai interactions of clams is avriilable (Manzi and Castagna, 1989a). The result of this is that the prognosis for clam aquaculture looks good, both for North America and British Columbia Despite a good forecast, Manzi and Castagna (1989a) see the development of cIam aquaculture to be slow and uninspired, due mainly to the following three constraints: 1) regulatory restrictions, 2) organisrnic or environmental limitations, and 3) a lack of knowledge in certain areas of clam biology. These contraints cm further be categorised into bureaucratic and technical limitations, with regulatory restrictions king classified as the former, and species and knowledge limitations the latter. By far the most serious threat &O aquaculture in Canada and the US are the regulatory restrictions imposed by government (Albrecht, 1990; Clayton, 1990; Cockburn, 1990; Dickson, 1990). Regulations are often in pIace to cover such aspects as species importation, water and land use, pdution control, and heaIth and safety. In addition, local authorities may exercise discretion over the grantirtg of aquaculture licences (Manzi and Castagna, 1989a). The combined mult is ofien a lengthy and fmstrating process to obtain an aquaculture operating permit. This is often blarned for the lack of initial investrnent or expansion in the clam aquaculture industry. Dissatisfaction with government is also present in the aquaculture industry due to contradictory signals given by governrnent. On one hand, the lead government agency responsible for aquaculture wishes to encourage growth and development, only to be met by opposition from another government agency responsible for such portfolios as environmental issues. Such an air of frustration has been apparent in the British Columbia aquaculture industry for a number of years. Technical constraints to clam aquaculture in British Colubmia include organismic andor environmental limitations, dong with a lack of knowledge in certain areas. Organismic restrictions can be overcome to a large extent with proper species and site selection, factoring in aspects such as predators and hydrological phenomena (e.g. pardytic shell'fish poisoning) (Borne, 1989). A lack of information is one which may be overcome through increased CO-operation within the industry. Manzi and Castagna (1989a) cite limitations in the North American mollusc industry to be gaps in knowledge pertahing to genetics, nutrition. and disease and parasite control. Weaknesses in areas such as a general lack of cornprehensive reviews of literature concerning rnoilusc culture, and a general lack of dernonstration or pilot facilities were dso noted- 1.3.1 Clam Aquaculture in British Columbia Clam aquaculture in British Columbia is still in its infancy. The culture potential of various indigenous clam species was examined by Boume (1989) during the 1970's and 80's. Butter clams were examineci, but slow growth rates (greater than five years) and an umeliable supply of seed resulted in the termination of the project. The current down turn in the market for butter clams (G. McClellan, Mac's Oysters Ltd., persona1 communication) is yet another reason preventing the economic success of butter clam culture. Littleneck culture experiments were also undertaken at the same time the butter clam trials were k i n g conducted Littleneck clams were better suited for culture due to a faster growth rate (three to four years). However, seed supply posed a major obstacle to the development of the industry (Boum, 1989). No hatcheries were established, and collecting seed from a wiid set would be prohibitively expensive. As a spin off of littleneck culture research, and fueled by the success demonstrated in Washington State, Manila clam research was undertaken. Manila clams proved to be the best candidate species for clam culture in British Columbia due to a fairly fast growth rate (3-4 years), the commercial availability of seed fiom hatchenes in the United States, and a strong market demand for the product (Bourne, 1989). Manila clams have since been the main stay of clam culture in British Columbia The first clam f m was licenced in 1988, but clam aquaculture did not become official until 1991, when a joint federal-provincial letter of understanding was s i a e d (Chettleburgh, 1996). Clam production has increased from 31 tonnes in 1989 to 500 tonnes in 1994, and is projected to reach 7 5 0 tonnes by the year 2000 (Anon., 1995). There are currently 403 hectares of foreshore designated for clam culture, of which h d f includes oyster and non-productive ground (B. Kingzett, BC Shellfish Growers Association, persona1 communication). The future for clam aquaculture in British Columbia looks promising, as it appears the wild harvest of Manda clams has plateaued (Fig. 3), while a strong market demand still remains. It is this gap between demand and wild harvest that clam aquaculture can fa. Fig. 3. Wild Manila clam harvests showing toial harvest and total landed value for British Columbia (Anon., 1996~) Once peak production is achieved, a properly managed clam farm should be able to yield 2 kg of clams per square meter (23 t/ha) (Chettleburgh, 1996). Most clam farms have not yet reached this Ievel of production as a result of inexperience. Clam farrns do however produce half of the wild fishery using only 1/10 of the area (Anon. 1996a). It is estimated that at full production capacity the clam aquaculture industry wiI1 be able to produce four times the wild fishery (Chettleburgh, 1996). in cornparison, the wild fishery encompasses 1600 - 3200 hectares of foreshore, with an average yield of 0.1 kg per square meter, resulting in an annual yield of 1300 tonnes for 1995 (Anon., 1996a). In many areas the fishery is reduced to tess thm 16 days per year (Chettleburgh, 1996). 2.0 The Biology of Tapes philippinarum The Manila clam is an exotic species fint introduced to North America through the importation of Japanese oyster (Crassostreagigas) seed from Japm in the mid 1930's (Bourne, 1982). It was f'irst reported in Ladysmith Harbour, BC in 1936, and has successfully spread northward as far as the Queen Charlotte Islands, British Columbia (Bourne, 1982), and as far south as Humboldt Bay, California (Chew, 1989). The accidental introduction is now considered to be beneficial (Bourne, 1982; Chew, 1989), as this species has found general acceptance as an edible mollusc in British Columbia and supports both a recreational and commercial fishery, as well as a rising aquaculture industry. 2.1 Nomenclature The Manila clam (also known as the Japanese littleneck) belongs to the Venus clam family, Veneridae. It has appeared under a number of scientific narnes in the Literature (TabIe 2). The currently accepted name is Tapes philippinam, and as such, will be used throughout the remainder of this text. 2.2 Ecotogicai Requirements Manila clams inhabit the mid-to-upper area of the intertidal zone, an area that was not previously dominated by another species prior to their introduction (Chew, 1989). The lower Iirnit of the Manila clam over laps with the upper limit of the native littieneck clam (P. staminea),where it is out competed by the native littleneck (QuayIe and Bourne, 1972; Bourne, 1989), thus shortening its theoretical niche. The vacancy of this upper niche is thought to be responsible for the rapid spread of this species throughout the Strait of Georgia (Boume, 1989). The width of the Manila clam zone varies with beach slope; on steep slopes, only a few meters may be inhabited, whereas on a gently sloping beach, the width may be as great as 75 m. Manila clams do not occur in sub-tidai areas in British TabIe 2. Genus and species narnes of the Manila clam reported in literature (Bourne, 1989; Chew, L989;Ponurovsky and Yakovlev, 1992). Genus Name Species Name Amygdala ducalis; semidecussata; philippinarum Paphia bifirrcara, P. (Venerupis)philippinanun Protothaca philippinarum Ruditapes philippinarum Tapes decussatta; decrcssatus; denticulata; indica; japonica; philippinarum; semidecussata; vanegata; violascens; (Amygdaùa)japonica;(Amygdala) philippinartun japonica; philippinam; semidecursata; (Amygdala)philippinarum; (Rudirapes) philippinanan decursata; japonica; philippinarum; tesseha: ( T u D ~decussata s~ CoIumbia (Quayle and Boume, 1972). Because of their distribution in the rnid-to-upper intertidal zone and shallow depths within the substrate (10 cm maximum), the Manila clam is susceptible to extreme temperatures. Die-offs have been reported during severe winters (Bourne,1982; Bower, 1992). Ided substrate composition for Manila clam growth consists of grave1 (less than 25 mm in diameter), sand, a smdl amount of mud (5%)and sheI1 (Anderson et ai, 1982). Such a substrate should be stable, and can typically be found in the Pacific Northwest in sheltered bays or inlets (Schink et al, 1983; Bourne 1989; Chew, 1989). For maximum survival, the beach should have a slope of 15 to 1 or less. Beaches with dopes greater than 10 to 1 tend to have poor survivai (Anderson et al, 1982). The optimum interiidal range for Manila clams is approximately 4 - 9to +2.4 m above mean low water (Quayle and Bourne, 1972). Water circulation is probably one of the most important factors affecting clam productivity on kaches (Anderson et al, 1982; Chew, 1989). Not only does water circulation bring about the sertlement of new larvae, but it is also responsible for supplyinp food and oxygen necessary for fast growth and the removal of waste products. Despite its importance, very littie work has been done regarding water movement in clam field studies. At best, current speed is given using qualitative measures such as slow, moderate, or fast (Chew, 1989). The water circulation of an area is also directly responsible for the substrate deposition, and as such, directly affects clam settlement and survival by influencing the substrate composition (Williams, 1980; Anderson et al, 1982; Jaeckle and Manahan, 1992). . 2.3 Spawniug Cycle Manila clams in populations off Japan have been found to spawn twice each year (Yasuda et al, 1954, cited in Chew, 1989). The first spawning occurs in the spring, during the months of May to July. The second spawning takes place during the late autumn, from late November to December. Clams have been found to start spawning at shell lengths of 15 mm or less (Chew, 1989). In the Pacific Northwest, the Manila clam has only one spawning cycle a year from May to September, with the majority of clams spawning during the warmest parts of June and July (Holland and Chew, 1973; Bourne 1982). Femaies spawn in smail spurts throughout the summer, whereas maies release a large portion of garnetes at the beginning of the season, and qu~cklyregenerate to release a second batch toward the end of the spawning season. In Puget Sound, Washington, clams were found to have mature gametes at sheil lengths of 5-LO mm, however, spawning was not usually evident until a shelI Iength of 15-20 mm. A11 individuais over 20 mm spawned at the end of their first year (HoIland and Chew, 1973). Holland and Chew (1973) also reported the first instance of hermaphrodism in Manila clams, with one of the 937 clams examined k i n g hemaphroditic. Low levels of hermaphrodism have been reported for other species of c l m (Chew, 1989). The sex ratios of Manila clams in the two sites studied by Holland and Chew (1973) were 48% males to 52% females and 44% males to 56% females, indicati& a fairly uniform occurrence of each sex. The reproductive cycle of the Manila clam in the Strait of Georgia has k e n studied by Bourne (1982), and found to be similar to that of the Manila clams occumng in Puget Sound. Adults were found to be ripe in early June, with spawning taking place in mid-tolate June and continuing until September. Similar to the clams studied in Puget Sound (Holland and Chew, 1973), females were found to spawn continuously over the summer, whereas males were able to spawa twice within one season. On the West coast of Vancouver Island, the reproductive cycle is similar, although somewhat delayed due to lower water temperatures on this coast, particuIarIy as one proceeds northward. The minimum water temperature to allow spawning and larval development appears to be 13 150C (Quayle and Bourne, 1972; Bourne, 1982). Manila clams in the most northern populations have been observed not to spawn dunng sumrners with below normal water temperatures. It is thought that coder water temperatures have halted the northern progression of Manila dams (Bourne, 1989). 2.1 Larval Development Larval development takes approximately two to four weeks before spat faiI occurs (Quayle and Bourne, 1972). This is dependant on a number of factors such as temperature, salinity, food supply and currents. Setting size of the Iarvae is between 190 and 24û pm (Chew, 1989; Jones et al, 1993). The fertiIized egg (approximately 70 pm) develops into a straight-hinged fiee swimrning veIiger (90 pm) within 24 hours (Cbew et al, 1987). The veliger stage lasts for approximately two weeks, during which time the veliger feeds on phytoplankton between 2 to 20 Pm. Following this, the veliger develops into a pediveliger (approximately 200 p m), possessing both a foot and a velum (Jones et al, 1993). It is at this point that the larvae begin actively looking for a suita1;le substrate on which to settle. Larvae settie on the substrate and attach by means of a byssal thread secreted from the byssus pit in the foot of the clam. This serves to temporarily hold the clam to the substratum before it can commence digging. The optimum water temperature for larval development is 23 - 240C (Jones et ai, 1993), with temperature tolerance limits ranging between O and 360C (Chew, 1989). Water temperatures in the Strait of Georgia generally do not exceed 15 or 160C during the warmest months of the summer (Bourne, 1982). Even though water temperature fluctuations rnay not be enough to h m Manila clams, extreme substrate temperatures during either the surnmer or winter may be lethal. The optimal saiinity for the Manila clam ranges between 24 to 32 ppt, with a tolerance range of 13.5 to 35 ppt (Chew, 1989). Salinities for Puget Sound range between 28 to 3 1 ppt, and no adverse effects on larvai development have k e n noted (Anderson et al, 1982). No salinity data relating to Manila clams in British Columbia could be found. However, it is assumed that due to the success of Manila cIams in Georgia Strait and the similar hydrologicd conditions to Puget Sound, the same sdinity toterances hold true for Manila c1am.s occurring in British Columbia 2 5 Growtb Growth in ManiIa c l m s is detennined by measuring winter annuli (the straight-line distance between the anterior and posterior margins of the annuli). Most Manila clams in British Columbia have distinct winter annuli (Quayle and Boume, 1972). A great number of growth studies have k e n reported in the Literature (see Chew, 1989 for a review) with a high degree of varïabiiity corresponding to annud growth rates. To a large extent, the race of growth is dependant on temperature. ui his review, Chew (1989) reported on first year growth rates that varied between 8 mm to upwards of Iegal size (38 mm). Market size Maniia clams were obtained by Raide et al. (1976) under hatchery conditions, Using nutrient enriched deep-sea water, with temperatures between 22 and 290C in an upwelling culture system, market shed (38 mm) cIams were obtained in 10 months from the 5 mm stage, or 13 mcinctis h m the post-set juvedes. Survival rates of 64 and 65%. respectively, were reporîed. Such growth triais represent controiied laboratory conditions, and, as such, bear little meaning for the commercial aquaculturalist, except to denote a maximum obtainabIe growth rate under carefully controlled, noncommercialised conditions. O 1 2 3 4 5 6 7 8 9 10 Age (Years) Fig. 4. Manila clam growth rates in the Stnit of Georgia (from Quayle and Boume, 1972) As growth experiments have been conducted on iocal populations of Manila clams (Quayle and Bourne, 1972). these numbers are of much more pertinence than those reported from other locales, and should be used as a guide for expected growth rates in British Columbia (Fig. 4). It is also important to bear in mind that local topography, hydrological conditions, and geography wili influence growth rates ai a micro-habitat level (Williams, 1980). In British Columbia, Manila clams cm attain legal hamestable size in approximately 3.5 years in the Strait of Georgia; 4 years on the western coast of Vancouver Island; 5 years in the central coast m a ; and 5.5 years in the Alert Bay area (Boume, 1982). Growth rates are fastest where water temperature are warmest, and slowest where temperatures are lowest. Growth (and survival) rates of clams planted under sorne type of cover are higher than those planted to an unprotected beach (Anderson et al, 1982; Anon 1990b; Spencer et al, 1992). The higher survival rates are explained through predator exclusion, w hereas a faster growth rate has been attributed CO increased environmentai stability under the protective covering, and hence an increased energy swings that c m be put toward growth (Anderson et al, 1982). Exposure is also considered an important factor in the growth and survivai of clams on the beach. Clams higher in the inteaicial zone tend to be slower growing than those lower in the intertidal zone, as a result of reduced feeding time in the upper parts of the beach (Quayle and Bourne, 1972). 2.6 Predation The Manila clam falls prey to a number of different species, most of which are hard to eliminate (Quayle and Bourne, 1972; Anderson et al, 1982; Chew, 1989). They can be controlled to a certain extent through the use of predator exclusion netting, which is now used extensively throughout the Maniia clam aquaculture industry (Anderson et al, 1982; Anon. 1990b; Spencer et al, 1992). Predation may be observed directly (as in birds feeding diiectly on clams), but more often indirectly through damaged and empty shells. One of the major predators of Manila clams is the moonsnail (Polinices Lewis0 which preys on clams by drilling a countersunk hole in the umbo of the clam (Anderson et ai, 1982). Most predation is by snails 25-100 mm in sheïï diameter. The presence of moonsnaiIs is often detected through its circular egg case (Chew, 1989). Crabs also represent a major predator of Manila dams (Quayle and Bourne, 1972), with red rock crabs (Cancer productus) king the major predator h m this group. The smaller graceful crab (C. gracilis) and the shore crab (Hemigrapsus spp.) are minor predators. Certain species of bottom fish such as the rock sole (Lepidopsetta bilineatea), the English sole (Parophrys vetulus), the starry flounder (Platichthys steilatus}, and the pile perch (Rhacochilis vacca) have been known to prey on ,Manila cIams (Quayle and Bourne, 1972; Anderson et ai., 1982; Chew, 1989). These species can be controlled through the use of predator exclusion netting. Several species of starfish are also thought to prey on Manila clams, with the sunfiower starfish (Pycnopodia helianthoides) and the mottie star (Evasterias troschellio being the most serious clam predators (Quayle and Bourne, 1972). The pink star (Pisaster brevistinus) and the ochre star (P.ochracem) are known as rninor predators (Chew, 1989). Nearly al1 starfish that have been observed near Manila clam beds have been at tide levels below the clam occurrence, therefore it is specuhted that the starfkh probabty do little harm to clam beds (Quayle and Bourne, 1972). Three species of ducks, the white-winged scoter (Melanina delgandi), the surf scoter (M. perspicillata), and the American scoter (Oidemia americma) have been reported to feed on Manila clams (Quayle and Bourne, 1972; Anderson et al, 1982). These birds are often observed to over winter in hi& numbers in inland marine waters where they feed on unprotected Manila clam'beds with destructive results. These ducks have not been directly observed feeding on planteci and protected Manila clam beds, but a small amount of unobserved predation may occur (Chew, 1989). 2.7 Diseases and Parasites Of the many criteria that must be considered when culturing an organism, diseases and parasites rank arnongst the most important. Associated with the rapid increase in shellfish aquaculture is an increase in the incidence of disease (Bower et al, 1994). This is due in part to the development of hatchery-based seed production, remote setting, and the increased use of non-indigenous species. An increase in the worId-wide transfer of significant shelifish diseases has aiso been apparent in the past decade. For example, Bonomia ostreae of oysters (Ostrea edulis) was transferred from North America to France, and subsequently to the rest of Europe (Bower et al., 1994). This example typifies the spread of disease through cultured species and is likely to continue unless prudent quarantine measures are foilowed. No infectious diseûse agents have been found in Manila clams in British Columbia (Bower et al., 1992). However, this does net preclude the possibitity that diseases do not actually occur for the species; it may simply be that none have yet been reported (Elston, 1990). Parasites or symbionts consisting of intracellular bacteria, protozoa, and metazoa have been observed to be associated with Manila clms in British Columbia Some of the organisms studied were thought to be enzootic, whereas othen were thought to have strayed from other molluscan hosts native to British Columbia (Bower et al., 1992). What follows is a brief sumrnary of those parasitic and symbiotic fauna of the Manila clam, followed by an overview of diseases known to affect Manila clams and other species of the genus Tapes. The aim of such an overview is not to claim that such diseases occur in British Columbia, but to raise awareness of their occurrence, and the possibility that they may someday occur within Manila clam populations in the province through accidentai introduction. 2.7.1 Parasites and Symbionts in Maniia Clams Table 3. Prevalence of parasites and symbionts in Manila clams of British Columbia (Bower et al., 1992) ~ r e d e n c è ~ - -- p p - Rickettsia or Chlamydia Flickettsiaor Chlamydia Apicomplexan spores (Nematopsis-like) Apicomplexa (Gregm*m4ike) Apicomplexa (Coccidia-like) Tnchodina spp. Order Rvnchodida 1gill epithelium 1digestiw gland epithelium moderate frequent frequent ico&tive~issue of gills - - extemal gut epithelium rare gut connectk tissue rare inner surkce siphon, foot, mantle gills frequent moderate I - - - 1 . l~rematodemetacemana ldli connectiw tissue.- diaestiw tract1 moderate rare MytiIicoia onentalis rafe Pseudomyr'cola ostreae Pinnaxa faba. P. iittoralis ~eriohervof mantle (commensal1 rare 1 The relationship between the organisms listed in Table 3 and the Manila clam ranges from symbiosis to parasitism (Bower et al, 1992). In instances of symbiosis, the relationship benveen the clam and the associated organism is unclear. The relationship between Manila clams and Trichodina sp. is thought to border between symbiosis and parasitism (Bower et ai, 1994). The close relationship observed between Tnchodina and the gill epithelium is thought to suggest parasitism. Heavy infestations in Europe have resulted in Trichodina becoming pathogenic, with resulting moctalities. The same relationship is thought to be true for Gnffi~llidae-Likenubellaria (Bower et al, 1992). The benign host-parasite relationship between both Trichodina and turbellaria has led to the suggestion that they may be enzootic to Manila clams, and that they may have been introduced into British Columbia with their hosts (Bower et al, 1992). A long observed association between these parasites and Manila clams without indication of disease suggests that they are not likely to cause problems in the future. The remaining parasites observed in Manila clams appear to have strayed from other molluscan hosts native to British Columbia (Bower et al, 1992). Such is the case with Nematopsis sp. and the trematode metacercaria. It is thought that the Manila clam represents an aberrant and hostile host for such parasites, and is a "deade n d host. The organisms of most concern are the coccidia-like apicomplexan, pea crabs, and possibly some Trichodina sp., which currently occur in low prevalence, but may cause problems if they become more abundant (Bower et al, 1992). A higher number of parasites found in the most northerly populations is thought to be the result of environmental conditions that are stresshl to the clams, and as a result, the host is more susceptible to disease and parasitism (Bower et al., 1992). 2.7.2 Diseme Causing Agents in the Genus Tapes What foilows is a brief surnrnary of the microorgmisms and parasites that are reported to cause diseses in clams, with pxticular attention given to the genera Tapes, Wrdirapes, and Venerupis. The objective of this overview is not to claim that al1 such organisrns are of threat to Manila clam populations in British Columbia, but simply to raise awareness of exotic diseases. A full synopsis of these diseases is given in Appendix A. Of particular interest to commercial hatcheries was the isolation of a species of Vibrio, specific to clams of the genus Tapes. The isolated Vibrio species is referred to as VTP, and displays an affinity to K marinus (Nicolas et al., 1992). The disease first appeared in a French commercial hatchery in 1986, resulting in a near complete mortality of the - larvae, and between 30 50% mortality of postlmae. This strain of Vibrio had no effect on oyster larvae that were mixed in with the Manila clam larvae. Table 4. Diseases a€fecting the genera Tapes, Rudirapes and Venencpis (Bower et al, 1994; Pillard et al., 1994) Scientific Name Organisms belonging to the Rickettsiales Cytophaga-like bacteria (CLB) Vibflo sp.; M o P l isolate Vibrio anguillarvm; V. alghoiyticus Perkinsus atlanticus; Perkiisus sp. Nematopsis vene&N ustrearum and other Porosporidae Haplospondium tapetis Sphenophyra dosiniae; S. cardii Trichondina spp. Rhabdocoela of the famiiy Graffillidae Various species of the Digenea family Myülicola intesthalis (Copepoda) Mflicola orientalis (Copepoda) Pinnotheres son. (Decaaoda: Pinnothendad Common Name Rickettsia-like and Chlamydia-like organisr Hinge ligament disease of juveniles Brown ring disease Larval vibriosis or Bacillary necrosis Clam Perkinsus disease Parasitism by gregarines Haplosporidian infection of clams Sphenophyra-like ciliates Gill trichodinids Turbellaria of clams Trematode metacercarial infection M~d11icoladisease; Red w o n disease Mytiicola parasitism; Red worm Ovster crab. Pea crab 2.8 Research and Development Two areas of research with possible ramifications to the clam aquaculture industry are the use of polyploids and the cryopresewation of gametes. Each of these areas will be briefly eximined to present an overview of the possible future course of industry directed research. 2.8.1 Polyploid Production In order to maximise the culture potential of fish and shellfish, research has been directed toward the production of polyploid animais (Newkirk, 1980; Humphrey and Crenshaw, 1989; Beaumont and Fairbrother, 1991). Following much interest with the use of triploids for salmonid culture (Benfey, 1996). moliusc research is following the same line of inquiry. The premise behind polyploidy is that functiond gamete production is suppressed in polyploids due to a failure of chromosomes in their gametes to pair during meiosis. The resulting individual is expected to be sterile (Ekaratne and Davenport, 1993). Reasons behind the genetic manipulation and creation of polyploid individuals are two-fold. When rapidly growing, non-native species are considered for aquaculture, the use of sterile polyploid individuals can lead to a commercial success through the avoidance of escapees establishing wild populations and competing with native species. Polyploid individuds would also be unable to hybridise with native species of the same genus. Such concems are especiaily valid in areas such as the United Kingdom, where the introduced Manila clam could possibly compete or hybrîdise with the native T. deeussatus (Ekaratne and Daveport, 1993; Utting and Child, 1994). Energy otherwise destined for gametogenesis is put toward somatic growth, thereby enhancing growth rates in polyploid individuals (Humphrey and Crenshaw, 1989). In polyploid work conducted using oysters (Cmsostrea spp.) the lack of reproductive tissue contributed to greater customer acceptance due to a greater visual anractiveness and improved fiavour (Beaumont and Fairbrother, 1991). Further, mortdity may b e increased during and immediately following the spawning period (Humphrey and Crenshaw, L989). Tripioid individuds would not suffer this loss, thereby increasing the profits to the commercial culturaiist. Initial work involving the production of polyploid molluscs for the aquaculture indushy was carried out on oysters (C. virginica) with the intent of producing an oyster that could be marketed year round (Stanley et al., 1981). During the summer the meat quality of triploid oysten was maintained (as a result of reduced gonadal development), while their diploid counterparts suffered decreased meat quality. Trials have been conducted on Manila clams (Beaumont and Contaris, 1988) with the intent of reducing gonadal growth, while at the same time ùicreasing somatic growth. This change in growth pattern would help to improve meat quality and reduce age at harvesting. Methods of inducing polyploidy (mainly triploidy) include subjecting the fertilized egg (10 minutes postfeailization) to thermal shock (Gosling and Nolan. l989), hydrostatic pressure (Chaiton and Allen, 1985), cytochalasin B (Stanley et al., 1981). or to electricd fields (Cadoret, 1992). Thus far, no method has been successfbl in achieving 1 0 % ûiploidy. The only known method that results in total triploid production is crossing a diploid with a tetraploid (Beaumont and Fairbrother, 1991). In light of this, research has been directed toward the production of tetraploid adults using cytochalasin B. Judging from the results of Diter and Du@ (1990), the use of cytochalasin B to produce tetraploid adults seems inviable for Manila clams. In their experiments. survival to the D-lard stage was poor, and no tetraploids were found at the Cmonth-old spat stage. Cytochaiasin B now seems to be the method of choice for establishing triploidy. In eggs treated with cytochalasin B. suMval to the D-lava (or straïght hinge larva stage) was 45% (expressed as a percentage of initial egg numbers), compared to 67% sumival in diploid controls (Utting and Child 1994). Similar results were obtained for triploid trials of T. dursarus (Ne11 et al., 1995). Survivai following the D-lana stage was similar for both diploids and triploids (Utting and Child, 1994). Utting and Child have suggested that in order to guarantee a high percentage of triploid seed, at lem 70% of treated eggs mnst develop as uiploids, and survival to the D-larva stage should exceed 55%. Ne11 e t al. (1995) had an overail mean survival to metamorphosis of 18.5%. This is considembly lower than the rate suggested by Utting and Child (1994). However, this level of survivai rnay be acceptable if the possible benefits of increased meat yield or reduced age at harvest exist The amount of time broodstock are conditioned and the type of diet fed also influences the success of tnploid induction in eggs treated with cytochaiasin B (Utting and Doyou, 1992). Thus far, ail clam triploid studies have been conducted in small scale laboratory operations. No analyses have been conducted to assess the economic impact on larger, full scale operations, as is the case with the current anaiysis of using ail female or triploid stock for AtIantic saimon culture in British Columbia (Ludwig, 1996; Egan, 1996). There is a strong possibility that the costs of using tripIoid clams rnay exceed the benefits, as the profitability margin of most clam aquaculture operations is fairIy low (Roland and Gubbels, 1990; Heath and Gubbels, 1993). The increased cost of using triploid seed may tum the operation into an unviable venture. 2.8.2 Cryopreservationof Gametes Limited work has k n conducted on the cryopreservation of Manila clam spenn, but an appreciable amount of work has been directed toward the cryopreservation of spermatozoa of several Crassostrea species (Yankson and Moyse, 1991). The driving force behind this area of investigation has been the possibility that preserved garnetes could act as a readily accessible source for hatchery rearing, thereby eliminating the need for the time consuming and expensive process of conditioning broodstock. Cryopreservation could also preserve valuable genetic strains. This could increase the breeding potential for such vduable traits as npid growth, increrised disease cesistance, and better meat quality. Yankson and Moyse (199 1) have demonstrated the cryopreservation of oyster spenn to be possible, and have sugested that storage in liquid nitrogen at - 196OC could have widesprerid use in the oyster culture industry. Sperm were stored for as long as seven months, and produced a lama1 yield of 18%. Trials conducted with T.philippinarum have demonstmted the ability to preserve both ernbryos and D- larval stages (Utting, 1993). 3.0 & I d aClam Culture and Husbandry In order to gain a-greaterappreciation of the project at hand, an overview of clam culture techniques follows. By mems of this technical overview. it is hoped that the proposed project will become more cornprehensible, and the position of a hatchery and the role it plays will be illustrated in the hierarchy of clam aquaculture. The culture of clams c m be broken into three distinct phases: hatchery, nursery, and grow-out Each phase becomes less intensive, and thetefore less technical. 3.1 The Hatchery Phase As the second half of this document deais with the financial aspects of the hatchery phase, technical considerations will be examined in this section. The hatchery phase c m further be subdivided into the foilowing areas: water quality and hygiene, broodstock selection and conditioning, spawning and fertilisation, algal culture methods, larval rearing methods, metamorphosis and seaing. 3.1.1 Water Quality a d Hygiene The water used during the conditioning of broodstock and subsequent raising of larvae m u t be of sufficiently hi@ quality and free from toxins (see Appendix B for the biophysical criteria of Manila clam culture). thereby avoiding the problems of slow growth and mortality. Water quaüty is variable between hatchery sites and is often implicated in the resulting problems or subsequent failure of a hatchery (Chew et al, 1987). The development of early larval stages is extremely delicate (Chew, 1989). and is frequently impeded by adverse water conditions. Such conditions can either be man- made or naturdly occurring, and can include pollutants, toxins leached from sediments, high turbidity, and dense phytoplankton Wooms (Utting and Helm, 1985). Uning and Helm (1985) aiso noted that water quality varied seasonally. Reduced larval growth was corretated to increased minerd content and fine particdate rnatter input, which varied according to the arnount of freshwater mn-off present. Such conditions are usually present during spring and heavy penods of nin. In addition, following the collapse of the spring diatom bloom, water qudicy has been shown to deteiiorate. Poor areas are usuaily sites of hi& primary productivity or uncontrolled low sdinities for prolonged p e n d s of time (Chew et al, 1987). Within bivaIve hatcheries, the most cornmon problem associated with poor water quality is Mure of Iarvae to develop to the straight-hinged, Dshaped veliger stage (Jones et al, 1993). To avoid any of the above rnentioned problems, the water source should be as far removed as possible from any source of contamination. The intake should be piaced below the surface to avoid salinity fluctuations, and to avoid any floating contaminants, such as plastics or petrochemicals. The water intake may be positioned at one of two depths: above or below the thermocline. Each position has its own advantages and disadvantages (Jones et al, 1993). By positioning the intake below the thermocline, the water tends to have increased clarity (due to a lower algal concentration), a more stable salinity, fewer bacteria, and less chance of toxic contamination. Water from this area possesses the disadvantage of having fewer natural nutrients and a lower temperature, both of which contribute to higher production costs in the hatchery. Ideally, the hatchery should have access to both deep and shalIow water, and be able to switch accordingly, as the water quality from each source area changes (Jones et ai, 1993). The improvement of sea water quality has been examined by Utting and Helm (1985). In their experiments, water was pre-treated with the addition of various chemicals. The addition of ethylenediaminetetraacetic acid (EDTA) at 1 mgil was found to significantiy increase Iarvai growth. The cost of such a pre-treatment was not examined, but it is likely that at the concentrations suggested by Utting and Helm (1985), costs may becorne prohibitively high. If water is taken from a good quality source as suggested above, pretreatment of the water should not be necessary. Incoming water should be filtered through a series of filters, the srnailest of which is generaily 5 - 10 p n in size. The first filter is usuaily a sand filter that filters out large particulate matter, foIIowed by filtration through cartridge filters, at which point water empties into a reservoir or the larval rearing tanks (Chew et ai. 1987; Jones et al, 1993). Some hatcheries may stedise the filtered water with ultraviolet or ozone. Excessive amounts of particutate matter in the source watir can iead to problems such as filter blockage. Along with the care that must go into site selection and water quality control, serious attention must be paid to the prevention and management of bacterial infections within the hatchery. The utrnost cleanliness and conscientious management of the water source has been emphasised by Chew et al (1987). Improper management of the hatchery water supply can lead to extremely senous problems, and in extreme cases, the complete shutdown and sterilisation of the hatchery may be necessary. Severai points regarding the prevention and management of bacterial infections withh hatchery situations are discussed by Elston (1984) and summarised in Table 5. Table 5. Prevention management of infectious diseases withïin the hatchery (Elston, 1980 1Prevention and Management of Bacterial Infections t Maintain absence or low levels of vibrios in the system (water column and surfaces) - use appropriate degree of water filtration - maintain hygiene of system surfaces - use appropriate frequency of water changes Isolate infected stocks and associated equipment at Fust sign of clinical disease Discard infected stocks and sterilise equipment Identify source of infectious organisms, and modify and clean system According to Elston (1984), the appearance of infectious animai diseases under intensive conditions is typical in the development of hi& density husbmdry of any species. infectious diseases rnay be classified into two categorïes: 1) opportunistic pathogens which rnay be present in the environment at certain tirnes, and 2) highiy host specific pathogens which are frequently obligate intracellular pathogens. Pathogens rnay enter a hatchery via three possible routes: 1) the seawater source, 2) the brwdstock, and 3) the aIgai food stock (Elston, 1984; Elston, 1990). Bacterial diseases of lamal and juvenile moiluscs are the most important diseases caused by opportunistic bacteria. Of the bacterial diseases known to infect bivaive mohscs, vibriosis is more significant and costly han any similar diseases in larval molIuscs (Elston, 1984; Elston 1990). Bacterial growth associated with the surface of the shel has been suggested to retard shell growth and calcium deposition Elston et ai, 1982). As a result, the management of the rnicrobiai composition of the culture system &ring metamorphosis and early post-metamorphic stages is essentiai to successful motlusc culture. The control of surface-coating bacteria can be achieved by the culturalist through a number of means. Filtration of incorning water to remove particulate matter, onto which bacteria may be attached, should help reduce bacterial numbers (Chew et al, 1987). Hygienic mesures such as mechanical cleaning and sterilisation of water Lines and culture apparatus with a solution of 53 ppm sodium hypochlorite are adequate for . practical sterilisation (Elston, 1984). The frequency of cleaning will depend on factors such as temperature, organic loading, and feeding levels. Bacterial populations which establish themselves on the shells of juveniles may be removed with a treatment of dilute sodium hypochlorite. A 1 minute bath in 10 ppm sodium hypochlorite folowed by a seawater rime should reduce surface residing bacteria (Elston et al, 1982). the summer months, and hence increased survival during the colder winter rnonths. Gametes are produced by conditioning the broodstock, a relativeiy simple process of taking the animais from their natural environment and placing them in w m e r water thrit is gradually increased to spawning temperature (Loosanoff and Davis, 1963). As a result, gametogenesis and gamete maturation are accelerated, and mature adults can be produced before naturd populations start their sexud development. This ailows bivalves in spawning condition to be made available year round. Broodstock are generally maintained in 200 to 2,500 litre fibreglas containers through which unfiltered, heated (18 - 22OC) seawater is added (Hurley et al, 1987; Jones et al, 1993). Conditionhg containers can be either flow through or static. Flow through systems should be maintained with a w&te water flow of 1 liue per minute (Utting, 1993). Static water conditioning systems offer several advaniages over flow through systems: ease of monitoring to determine whether an unintentional spawning has taken place; ease of maintaining a constant temperature; and a more easily monitored aigal consumption rate (Jones et al, 1993). Due to the fact that tanks must be cleaned and stedised on a regular b a i s (every two to three days), a complete change of water musc be undertaken, therefore the static system offers somewhat of an advantage over the flow through systems. Broodstock are gradually conditioned over a period of time in which the temperature is slowly raised (approximately loîfday) to the desired level (Loosanoff and Davis, 1963). In the hatchery c m n t l y producing Manila clam seed on Vancouver Island, the optimum temperature of the conditioning system is 180C (Jones et al, 1993). This temperature is achieved by slowly increasing the temperature of arnbient seawater over the span of approximately one week. Care must be taken during the winter months when the temperature difference between ambient and conditioning rempenture is greatest, to avoid unnecessady stressing the clams (Loosanoff and Davis, 1963; Chew et ai, 1987). The Iength of time required to condition broodstock varies with season, and hence the natutai state of broodstock gametogenesis (Chew, 1989). During the winter months (when the dams are out of their natural reproductive cycle), conditioning is usudly canied out over a 6 to 9 week period, whereas little or no conditioning may be required during the summer (Jones et al, 1993), when gonads are naturaily ripe- Care must be taken to ensure that the broodstock is fully conditioned, as it has been s h o w by Lannan (1980) that lamal survival approaches a maximum when gametes from optimaily conditioned parents are united under optimal environmentai conditions. Suggested literature values for stocking densities of conditioning broodstock Vary - considerably. Utting (1993) suggests a density of approximately 50 animals of 20 25 g live weight per 200 1 tank for a flow through system, while Chew et ai (1987) suggest a much lower stocking density of one to two animals per 50 1 of water for static water systems. Clams may be conditioned with or without a substrate, as both rnethods have been reported to yield successful conditioning. Neither treatrnent has been shown to be better than the other (Jones et al, 1993). Should a closer examination of conditioning with or without substrates be undertaken, it is likely that those individuals conditioned in sand substrates will perform better than those conditioned without a substrate. The reason for this k i n g an increase in energy savings as a result of the substrate pressing closed the valves of the clams. Those individuals lacking a substrate would have to expend additionai energy to close their valves. A rnixed algal diet consisting of Tetraselmis suecica, Skeletmema costatwn and Thalassiosira pseuàonana - Clone 3H should be fed to broodstock (Chew et al, 1987; Utting, 1993). Jones et ai (1993) reported feeding broodstock with the foIlowin,o cultured species: Thalassiosira pseudonana - Clone 3H, Nunnochloropsis oculata, Chaetoceros gracilis, Tahitian isochrysis and lsochrysis galbana. The feeding system was set up to feed the broodstock approximateiy 1 litre per hdf kilogram of clam biomass per hour. It has been noted that this feeding rate may at tirnes result in the addition of too much food with an increased production of pseudofeces, but this is outweighed by a potentiaüy slower conditioning rate if food levels are too low. Additional feeding regimes are also noted: feeding at 6% of dry meat weight per day (Utting, 1993; Laing and LopezAlvarado, 1994); feeding at 2 litres/animai/day with an aigal concentration of 2 x 106 ceIls/rnl (Chew et ai, 1987); and sea water enriched with S. costatum at a rate of 800 &min resulting in a mean concentration of 2.74 x 105 celIsmil with gentle aeration (Mann,1979). Alternatively, broodstock diets may consist of seawater enriched with agricultural fertilizers (Spencer et al, 1986) or be drawn from natural phytoplankton blooms in large outdoor pools (Eldm et al, 1991). These last two alternatives offer the advantage of k i n g cheaper than monospecific aigd cultures, however, less control over species composition results. The introduction of unwanted zooplankton into the system may also be a problem. The use of specific diets alIows for optimum conditioning through the selective addition of nutrients required for garnetogenesis (Lannan, 1980; Utting, 1993). Triais carried out by Utting (1993) have shown diet quality to be important for maintaining and improving dry rneat weight of adults, dong with a resultant increase in fecundity. The results of Jones et al (1993) would be most applicable to the project at hand, as their trials were conducted on the east coast of Vancouver Island. The effect of diet on broodstock condition and subsequent growth and survival of bivalve larvae has been shown to be important (Langton et d, 1977; Lee and Heffeman, 199 1; Utting, 1993; Laing and Lopez-Alvarado, 1994). If broodstock are not cultured under optimum conditions, then insuficient amounts of nutrients may be transferred to eggs. Such was the case shown in a snidy with eggs of Crmsastrea virguiica and Mercenaria mercenaria. In a snidy by Lee and Heffernan (199l), high concentrations of triglycerides and lipovitellins (high density lipoproteins found within the egg) were required for proper embryo development and Imd growth. Recently. research has been directed toward the use of dried d g d diets for replacing live algal diets. The space, time, and technical expertise required to produce live algal feeds at the appropriate volumes aii increase the cost of the final product. Algal culture may account for upwards of 30% of overall production costs (Adams et al, 1991; Utting, 1993; Laing and Lopez-Alvarado, 1994). In experiments camed out by Laing and LopezAlvarado (1994) investigating the effects of dried dgal diets on conditioning and fecundity, it was shown that dried diets resulted in higher carbohydrate levels in broodstock clams. Lipid reserves were higher in clams fed live diets than those fed dned diets, thus resulting in increased fecundity. It was postulated that viable eggs require a minimum lipid content, and therefore females with lower lipid reserves compensate by releasing fewer eggs. Total lipid content may therefore be used to give some indication regarding the fecundity of a broodstock population. Utting (1993) examined mixed diets consisting of spray-dried algae and live algae. The most successful combination consisted of 70% spray-dried Tetraselmis and 30% live Skeletunema. The fecundity of clams fed this diet was the same as those fed a 70:30 ratio of live species. The cost of a spray-dried diet is 30%of the cost of a live algal diet (Utting. 1993). Dried algae also has the advantage of a less variable biochemical composition (Laing and Lopez-Aivarado, 1994). The qudity of live diets and dried diets used for broodstock conditioning versus larval rearing was briefly examined by Laing and Lopez-Alvarado (1994). Live diets tested as juvenile feed showed a wide range of nutritional quality, and ranked as follows in decreasing nutritiond value: Sketeronema costatum, Terraselmis suecica and Dunaliella rertiolecra. No such differences in nutritiond value were apparent when these diets were fed as broodstock diets. The difference in nuuitlond quality is thought to be the result of polyunsaturated fatty acid (PUFA)content within the algae. It is believed that adult clams have the ability to synthesize the PUFAs they require through the elongation and desaturation of shorter chah faîty acid precursors (Utting and Doyou, 1992; Laing and Lopez-Alvarado, 1994). At present, more work is needed to fully understand the use of dried algal diets in both broodstock conditioning and Iarval rearing. 3.1.3 Spawning and Ferüiization To detexmine the gonadal condition of the broodstock, an animal must be sacrificed for examination of the-gonad (Jones et ai, 1993). The gonadai tissue is cut, foiiowing which an examination of the tissue ensues. During this examination, the softness and fuiiness of the tissue is noted. A microscopie examination of the gametes is conducted to assess the development of eggs and motility of sperrn. It should be noted that males tend to condition faster than females, therefore fully ripe maies do not necessarily indicate a population ready to spawn (Chew et al, 1987). In oysters (Crassostrea gigas) it was demonstrated (Lannan et ai, 1980) that when spawning took place before the optimum conditioning period had k e n reached, spawning resulted in substantiai garnete release. However, a large proportion of the gametes were not fully ripe. Similady, if broodstock was conditioned for too long a period, an increasing proportion of gametes were non- viable and had started to deteriorate. The optimal window for conditioning, as defined by Lannan et al (1980), was the conditioning p e r d during which the gonadai index of the spawning population was increasing, but had not reached a plateau. This index is quantified by counting oocytes and ova in the ovary. The gonadal index is then calculated as the ratio of ova to the sum of ova plus myctes. In males, the gonadal index is calculated by comparing the cross sectional area of the portion of the gonad fiiled with sperm to the total cross sectional area of the gonad (Lannan, 1980). Once Fully conditioned, thé broodstock must be induced to spawn. Spawning is usudly induced ttirough thermal manipulation (Loosanoff and Davis, 1963). The first step is to feed the broodstock heavily (3.5 x 1o6 cellsld of T.preudonana or 14 x 106 cellsfml N. oculara) at 180C, foIlowing which the clams are allowed to cIear the water of a1ga.e. Spawning troughs are drained and filled with warm water (25O - 300C) and gonadal extract (eggs or sperm) is added in order to bring about spawning (Chew et al, 1987). If after 20 minutes spawning has not commenced, the tanks shouId be drained and fflled with water at lWC, followed by thermal manipulation and the further addition of gonadal extrâct. Should the clams not spawn after this attempt, the clams are not fully conditioaed (Jones et ai, 1993). Spawning can take up to 2 hours to complete, with males spawning fmt. The presence of gametes stimulates other clams to commence spawning (Loosanoff and Davis, 1963). An alternate method to thermal manipulation consists of placing the broodstock in shallow trays and exchanging the water every 15 minutes using altemating temperatures of 2OOC and 300C (Chew et ai, 1987). The addition of a 10-3 M serotonin solution following thermal manipulation has also been shown to induce spawning (NeU et al, 1995). As serotonin is currently king used in medicai studies of the hurnan nervous system, the potential hazard to human heaIth must be further assessed before its routine use in hatchery settings becomes cornmonplace. - Numerous methods of spawning exist, including mass spawning, slip spawning, segregated spawning, and semi-controlled spawning (Jones et al, 1993). Mass spawning, as the name implies, simply entails allowing al1 of the animais to spawn at once. This is the simpIest method of collecting eggs and sperm, however, the problem of polyspermy is often encountered (Jones et al, 1993). This occurs when the sperrn to egg ratio is too high, and subsequent larval development is affected. Mass spawning in containers may also prove to be disadvantageous in that there is no way of knowing how many (or which) parents contribute to the spawning (Hadley, 1993). This has the disadvantage of decreasing genetic variability. In süip spawning, the clrims are opened and the sex deterrnined, after which the clams are stripped of their gametes. Eggs are usually washed and retained in a bucket prior to fertilizaîion. This method has not proven to be especidly successful with ManiIa clams (Jones et ai, 1993)- A segregated spawning involves the quick assessrnent of sex as the clams begin to spawn. The clams are then allowed to spawn in separate containers and the gametes mixed at the correct ratio for fertilization. This method has proven to be time consuming, but successful (Chew et al, 1987; Jones et ai, 1993). Spawning in individual containers and equaiising the number of gametes from the different spawners will ensure that ail parents have a reasonable chance at contributing to the genetic pool ( H d e y , 1993). A semi-controlied spawning is fairly similar to a mass spawning, however, at the commencement of spawning, some of the males are removed to reduce to sperm to egg ratio (Robinson and Breese, 1984). The water from the spawning trough is ailowed to flow through to the larval rearing tank, as water from the spawning trough is replaced, thus, the whole system resembles a flow through system. This method has k e n found to require a minimai amount of effort, yet at the same time producing high rates of fertilization (Jones et al, 1993). In order to ensure a high proportion of normal and healthy Iarvae, optimal conditions must be present (Robinson and Breese, 1984; Chew et al, 1987; Jones et al, 1993; Utting, 1993). Fertilization should take place with a spenn to egg ratio of 10: 1, and with a temperature range of 230 to 280C in a static water tank. A sperm to egg ratio of 10: 1 is required for the proper fertilization of eggs and a consistent production of high quality larvae (Chew et ai, 1987). Higher sperm to egg ratios produce polyspermy, while lower ratios result in unfertilized oocytes. Should ternperanires drop below 230C fertilization rates drop significantly, whereas if they are too high, gametes are destroyed and bacterid growth is promoted (Clotteau and Dubé, 1993; Jones et ai, 1993)- In work conducted by Clotteau and Dubé (1993) pH was found to affect the fertilization success of surf dams (Spisula solidissima). Fertilization was greatly reduced below pH 7.5 and totdly inhibited below 6.0. Alkaline pHs were found to have no adverse effects until 10.5. No work relating to pH effects on Manila clams couid be found, however, it is not unlikely that the sarne generd trends may hold me. If such is the case, then it would be wise to maintain the pH of seawater at its nomal value of 7.8 for the fertilization of eggs. Once fertilization has occurred, development to D-straight hinge stage is dependent on temperature and density (Robinson and Breese, 1984). At 240C, the D-stage is usually achieved &er 24 hours (Jones et ai, 1993). Development tirne to the D-stage is doubled to 48 hours when the temperature is lowered to 18OC (Robinson and Breese, 1984). It is desirable to culture the embryos at the highest possible temperame to ensure the fastest possible development. 3.1.4 Larval Rearing Methods The optimal temperature for rearing larval Manila clams is 230C, although the larvae can tolerate temperatures within the range of 14O to 280C (Rucide et al, 1976; Robinson and Breese, 1984; Hadley, 1993; Jones et al, 1993). Temperatures above and below this range result in death. High temperatures are deaimental in that they invite bacterial growth within the larvai rearing environment. Larvae have also been shown to be tolerant of salinity ranges of 15 to 3@%0, with the optimal range being 20 - 30%0 (Robinson and Breese, 1984). Salinities below 15460 did not result in survivai to metamorphosis. Optimum larval rearing conditions therefore consist of a salinity range between 20 to 30%~and a temperature between 230 to 2SOC. L m d rewing tanks utilizing a flow through system enabIe higher densities of l m a e to be cultured than in static systems (Chew et al, 1987). Using a flow h u g h system, the number of larme in a 4,000 litre rearing tank cm be increased considerably (Jones et al, 1993). The disadvantage of a flow through systern is that it requires more maintenance than its static water counterpart (Le. daily cieanings to minimize bacterid growth). The outflow screen in a fiow through tank must be carefully monitored and cleaned daily to ensure that larvae do not block the filter and cause ovediow problcms (Jones et al, 1993). A series of progressively larger screens may be used as the Iarvae increase in size. This is advantageous in that larger screens are less likely to experience clogging problems, and at the same time can more easily accommodate the required water flow. The infiow pipe should carry preheated water (23O-250C) and freshly cultured algae (approximately 10 to - 20 thousand cells per miliilitre). Larvae are typicdy raised at a density of 2 5 larvae per millilitre, although a density of 10 larvae per rniiliiitre has been successfui. It thought however, that higher densities resuIt in stressful conditions, and therefore increased larvai mortalities (Jones et ai, 1993). Larval feeding c m be useful as an indicator for a number of factors to which the larvae are sensitive, the most important of which incIude water quality, temperature, and density (Chew et ai, 1987). Larvae not clearing the water can be an indicator of a problem in any one of these areas. Larval feeding rates should be monitored on an individuai tank basis, and should generally be fed at a rate of 30 to 50 thousand algal cells per miliilitre (Jones et al, 1993). Growth at different l a r d densities under optimal conditions of salinity and temperature have been shown to be largely a function of food supply (Helm and Millican, 1977). A more frequent changing of the culture medium in an attempt to make more food available was shown to be ineffective at promoting improved growth. The addition of sufficient Food on the days between water changes to make up for that removed from suspension during the previous 24 hours improved growth. Larvae stiould be fed the smaller dgal species first, followed by a progressive increase in ce11 size as growth progresses (Chew et al, 1987; Jones et al, 1993; Utting, 1993). First feeding should take place on the second day in the larvd rearing tank, with food being available to the D-land stage (Robinson and Breese, 1984). The first feeding should consist of the smaller fiagellates, in particular, Nannochloropsis oculata, Tahitian isochrysis, Isochrysis galbana, and Chaetoceros calcitram (a s m d diatom). The larger diatoms ThuZassiosira p s e u d o m (Clone 3 H ) and C. gracilis should be added as the larval approach 150 Fm (Jones et al, 1993)- 3-15 Metamorphosis and Setting Pediveligers are generally ready to set when they are approximately 150 pm in length, however, this has been found to range in size from 130 to 165 prn (Jones et al, 1993). The length of time to metamorphosis has been demonstrated to be dependent on temperature and salinity (Robinson and Breese, 1984). At 250C and 20-30%0 salinity, Iarvae metamorphosed in 19 days. As metamorphosis approaches, Iarvae should be inspected daily (Jones et al, 1993). Indications of the onset of metamorphosis include a shelI iength of the above mentioned range, a golden brown shell colour, and foot activity (Chew et al, 1987). An additional indication is an alteration between swimming and crawling lifestyles (Jones et ai, 1993). This transitional stage may be extended for up to two weeks if water temperatures are sufficiently low (Robinson and Breese, 1984). Metamorphosis is characterised by the loss of the velum and the animal's complete dependence on its foot for mobility. Upon settlernent, attachment to the substrate is achieved via a byssal thread. Should the substrate prove to be less than ideal, the byssal attachrnent may be severed and a new location chosen (Chew et al, 1987). Several factors affect the success of larvai setting, including: larval density, temperature, bacterial loading, fouting, dgal btooms, and feeding (Robinson and Breese, 1984). A lavai density of between 150 to 200 mimais pet- square centimeter shouId be used for a duwnweIler settlement tank. Temperature should be similar (or slightly lower) than the lama1 rearing tanks (Chew et al, 1987; Utting, 1993). As previously rnentioned, if temperatures become too high, problerns with bacterid and algal growth may occur. Clams at this stage appear to be mosc sensitive to high numbers of bacteria within the system, especially Vibrio spp., which =y cause high or complete mortaiity (Elston, 1984; Elston, 1990). Most bacteria in smalI numbers are hannless, and reflect n a t u d y occurring nurnbers. Fouling of the pediveligers' shells rnay become a problem as increased diatom numbers result with the progression of the season (Chew et al, 1987). A light spray with salt water should remove the fouiing organisms. Algd blooms either within the system or environment may have an adverse effect on setting, by either slowing d o m setting, or fouling the velum and resuiting in increased mortality (Jones et aI, 1993). The addition of food is still necessary to ensure the setting pediveligers achieve sufficient nutrition for metamorphosis to be carried out. Severai methods exist for setting larval clams, these include water tables, downwellers, setting screens, floating kaches, and oyster setting tanks (Jones et al, 1993). Water tables are shaiiow sided tanks offering a high surface area to volume ratio to accommodate the pediveliger's characteristic lifestyle of swimming and crawling- The system may either be a flow through or static system. Static systems still however require a water change of twice daily or more. Water tables offer the advantage that they may be stacked, thus consewing space (Jones et ai, 1993). Downweîiers consist of screened units holding larvae with water passing d o m over the larvae and out though a second screen at the bottom, Larvae are added to the screened units (screen size 120 pm) at a density of 150 to 200 per sq.cm, with a flow rate of I litre/min./rnillion pediveligers (Chew et al, 1987). Setting screens are essentially a modification of downweller designs, in that they consist of a shailow-iipped tray with a screen bottom (120 pm in size) that are ffoated in larger tanks (Jones et al, 1993). Density of animals and flow rate are the s m e as used for downwellers. Two "low technology" alternatives are available for setting larvae. Floatinp beaches allow setting in locations where electricity for pumping is unavailable. nie structure consists of a wooden €rame with removable screens at either end. The structure is filled with approxïmately 5 cm of sand and anchored in a well protected, well flushed area Pediveliger clams are added at a density of 1.5 rnilliodsq. m of sand. Being a system that is not easily monitored, set success is be mcuIt to determine. This system appears to offer better success as a field nursery, rather than as a setting meîhod (Jones et al, 1993). Oyster settïng tanks offer aaother alternative for "low technology" setting of clams. A thin layer of silica sand (2 cm) is spcead over the bottom of the tank, and larvae are added at a density of 150/sq. cm. Water should be changed twice per week, and dg- added at a rate of 20,000 to 50.000 cells/rnl (Jones et al, 1993). The use of substrate in larval rearing tanks presents the same dilemma as it did in broodstock conditioning tanks. Jones et al (1993) found no difference in set success between ground shell (200 p), sand (200 p)and no substrate. A difference in handling, maintenance, and estimating set success were noted. The use of a substrate increased the available surface area for setting, and helped preveot the clogging of screens in downwellers. The disadvantage of using a substrate was that set success (or failure) could not be detennined until the animals were larger and more easily screened. Screening becarne a more complex process as the clams were attached to the substrate via byssd threads. On the whole, production was made easier, however, monitoring was harder. In naturd populations, the presence of adult clams has k e n shown to influence the settiement of spat (Williams, 1980). A negative correlation was obsemed between the number of newIy settled spat and the density of aduIt clams. It has been suggested that spat are inhaled by adults dunng feeding, mpped in mucus, and discharged as pseudofeces. Successful survival to adulthood may iherefore be dependant on the ability of the farvae to detect and avoid adults. Setting clams should be fed a diet of higb quality Iive algae, dned dg=, or algal paste (Chew et al, 1987; Curatolo, 1993; Jones et al, 1993; Utting, 1993; Coutteau et al, 1994a; Coutteau et al, 1994b). The amount of naturally occurring algae wiIl Vary with the site, therefore it is often necessary to supplernent the incoming water with an algal supplement. The most mutinely used p i e s are: C.gracilis, .'2 pseudumna (3H clone), T. isuchrysis, 1. galbana, C. meuileri, C. calciirm, Al oculara, and Skeletonema spp (Langton et al, 1977; Laing f 993; Utting, 1993; Coutteau et al, 1994a). A mixture of severai species of algae (cornbining both diatoms and flageliates) results in a more cornplete diet (Langton et al., 1977; Coutteau et al, 1994a). Supplemental feeding rates depend on the availability of natural algae within the system. Most commercial hatcheries feed juvenile clams a mixture of algal species at a rate of 4% dry weight dgae per live weight of clam per day (Chewet al, 1987; Utting, 1993). The preferred manner of feeding is twice daily: once in the morning, and the second 7-9 hours later (Laing et al, 1990; Coutteau et aI, 1994a). This feeding regime results in increased utilisation of the algal food, and improved growth. Feeding should be adjusted to accommodate a rate of between 20,000 to 50,000 ceIls/ ml of water in a static system, and 10,000 cells/ml flowing water in a flow throue system (Jones et al, 1993). If a flow through system is used, heat and algae can be recovered through the use of a heat exchanger and by using the outflow water to grow smaller seed. The flow rate for a flow through system should be adjusted such th& approxirnately two complete water changes per day occur (Chew et al, 1987). In a static water system, the water is changed twice per day as two separate and complete water changes. In both systems the sme volume of water per larva is required. 3.1.6 Alternative Feed Sources In recent years, research has been directed toward low cost alternative feed sources for juvenile molluscs (Laing et al, 1990; Curatolo et al, 1993; Laing, 1993; Coutteau et al, 1994a; Coutteau et al, 1994b; Sauriau and Baud, 1994). The intensive production of Iive algae for bivalve rearing requires space, energy and skiIled labour. As a result, the cost of canying out these activities can comprise as much as 30% of the total operating cost of the hatchery (Adams et al, 1991). The estimated cost of algal production (in 1994 US$, not indexed for inflation) ranges from $50 to S400 per kg dry biomass (Coutteau et al, 1994b). Various alternatives to the use of üve algal diets have been exploreci, including such avenues as the addition of baker's yeast (Saccharomyces cerevisiae) (Coutteau et al, 1994b), the use of spray-dried algal die& (either dong or in combination with live diets) (Laing et al, 1990; Curatolo et al, 1993; Coutteau et al, 1994a), and the artificial breakage of diatom filaments for increased assimilation (Sauriau and Baud, 1994). The use of baker's yeast as a food substitute for Mercenaria mercenaria, as exexamined by Coutteau et al (1994b), found that replacing 50% of the algal ration with yeast did not result in a significant decrease in growth rates relative to clams fed algal diets. The substitution of 80% of the algal diet with yeast led to growth rates reaching 90% of the algd fed controls. The physical breakage of long chained diatoms (Skeletonema costatum) into segments less tha. 60 pm has k e n investigated by Sauriau and Baud (1994). The researchers suggest implications for mollusc culture in several area, including: 1) reduction in sinking rate due to a decreased size distribution; 2) a decrease in the production of pseudofeces due to the elimination of filaments Imger than 60 pl;3) an increased potential for nutrient assimilation resulting from weakened ce11 walls and; 4) the addition of organic materiais to the water (both particdate and dissolved) from damaged cells. The use of spray-dried algal has recently been receiving much attention (Laing, et al, 1990; Curatolo et al, 1993; Utting, 1993). In an atternpt to provide cost-effective alternatives for algd production andor insurance against algal collapse, artificial and replacement diets are king examined. Dried algal diets are advantageous in that they are of a known, defined, biochemical composition (Laing et al, 1990). Despite attention to this area, problems stiii exist. To be an acceptable artXicial diet, the diet in question must remain in suspension, be non-toxic, and be easily assimilated and digested (Laing et al, 1990). In trials conducted by Curatolo et al (1993) it was show that juvenile diets of 100% dried algae, and supplements up to a%, did not produce satisfactory growth. It is thought this may be due to bacterial contamination from decomposition and decay of the dried dgae. Diets that were composed of 80% Live/20% dry and 60% live/40% dry resulted in good growth performance. A suggested feeding regirne (Curatolo et al, 1993) for juvenile Manila clams (2 - 3 mm) is to commence initial feeding on either a totally live diet or 80% live/20% dry. After a month, this c m be replaced by a diet of 60% live/40% dry. It has also been suggested (Laing et al, 1990) that the drying process may facilitate the digestability and physical breakdown in the gut of the larvae, thus leading to more efficient assimilation and utilisation. It is thou@ the physical conditions applied in the drying process affects the integrity of the ce11 w d . Adaptations to nutritive stress in juveniles have been examined (Laing, 1993), as bivalve molluscs are adapted to withstand relatively long periods of nutritive stress as a result of living in coastal environments in which food supplies Vary seasonally. The degree of response to nutritive smss is linked to biochernical reserves within the animal (Laing, 1993). Carbohydraîes are used preferentially over Iipids and proteins as an energy source. This preferential use over Iipids and proteins may be a means of protecting against the loss of structural components. Therefore, those juveniles with higher carbohydrate reserve levels adapted more successfully to nutritive stress. Based on these findings, and the findings of Laing and Lopez-Alvarado (1994) that spray dried diets resulted in a higher carbohydrate reserve, p s t nursery size clams should be fed a diet composed partially of spray dried algae to increase their carbohydrate reserves. An increase in carbohydrate reserves will dlow the newly planted clams to ùe better adapted to fluctuating food leveis. 3.1.7 C u b g During juvenile gowth a common practice is to cul1 at regular intervals and discard the smaller animals. The logic behind culling in the hatchery and nursery is that slower growing individuals in this environment will be the slower growing individuds during the grow-out stage, and hence a longer period of time until a retum on capital is seen. Such an assumption rnay not however be as logicaliy sound as it may seem. In work conducted by Hadley (1993) it was shown that clams which perforrned well in a hatchery environment did not necessarily perform well in the nursery or grow-out systerns. By culling in a hatchery situation, one is selecting for individuals which grow well under constant and optimal conditions - not those conditions which are found in the grow-out environment (and to a lesser extent in the nursery environment). In a hatchery environment, temperature, salinity, food arnount and quality are al1 constant and present at optimal levels to ensure maximum growth. In the more variable environment of a grow-out systern the previously mentioned factors fluctuate to a much greater degree. Thus, by culling in the hatchery, individuals with rapid growth in a constant environment are selected for, and these individuals may not necessarily perform well in the highly variable gow-out environment. It is therefore advantageous to maintain a high d e m e of menetic variability within the population. In order to realize any genetic improvement in O the deveiopment of broodstock, selection for desired traits must be carried out at the appropriate time (Le. selection for rapidly growing clams should be made at the end of year 3, not during the hatchery or nursery stage). 3.1.8 AIgal Culture Methods AlgaI culture is one of the most crucial components of a hatchery system, as early juvenile stages are the Iargest consumers of intensively cultured micro-algae (Coutteau et al, 1994a). For hatchery purposes, two important criteria must be met: 1) the food supply must be continuous and 2) appropriate to the l a m e (Wohlgeschaffan et al, 1992). Being such a large cornpoueut of the hatchery operation, the cost of algal culture c m approach upwards of 30% of the total operating costs of the hatchery. Due to the high proportion of operating costs brought about by aigai culture, it is not surprishg that much effort has been conducted in the area of algal research. M a t foiiows is a brief overview of aigal culture techniques as used in bivalve hatcheries. Sterile algaI cultures are used as starter cultures within the hatchery. These cultures c m be obtained from research facilities, algae laboratories, or another hatcheries' parent stock (Hurley et aI, 1987). Regardless of its origin, the culture must be a monospecific stock in . a sterile medium, and is to be used by the hatchery to produce large volumes of clean, fast-growing, and good quality food. The usuai rnethod of production starts with the pure cuIture king used to inoculate 500 ml flasks containing cultue medium (stock cultures). The culture stocks are perpetuated by transfemng thern to new 500 ml flasks, or used to inoculate 2000 mi flasks. Up to this point, dl culturing of algae occurs in an area of the hatchery designated exclusively for aigal production (in an attempt to maintain a stenle rearing environment) (Hurley et al, 1987). Following growth in the 2000 ml fiasks, larger tanks (ranging in size from 90 to 5000 1, depending on the method of culture king used) are inoculated with the product from the 2000 ml flasks (Chew et al, 1987; Jones et al, 1993). After 3 weeks from the start of initial algal production, harvest h m the Iarger tanks takes place with a resulting density of approximately 10 - 20 million cells per ml (HurIey et al, 1987). There are three general methods in which hatcheries are able to produce a consistent supply of appropriate food organisms (Claus, 1981; De Pauw, 1981): 1) cultivation of phytoplankton in open outdoor ponds, 2) cultivation under controlled (or enclosed) conditions either indoors or outdoors, and 3) bloom induction in natural seawater through the addition of fertiiizers or sewage effluent. The major problems associated with the fmt and last methods are the lack of control over the species being cultured and water quality concems (DePauw, 1981). Within these three methods of algal production, two broad categories exist: batch culture and continuoudsemicontinuousculture. Batch culture involves the propagation of a senes of progressively Iarger culture vessels, with the final vesse1 containing a large volume of enriched sea water. These are illuminated for a period of time and the entire crop is harvested at the mid-log or stationary phase of growth (DePauw, 1981). A more recent shift in commercial algal production has been toward the use of continuoudsemi-continuous culture methods (Richmond, 1987). This mode of production involves constant removal of a ce11 suspension from the culture vesse1 with the addition of an equal volume of growth medium. Harvesting begins when the culture reaches a mid to late Iog growth phase. The continuous dilution rate keeps the algal density at an optimum level for maximum yieId. This mode of culture offers the advantage of maintainhg culture production near its maximum leveI while using a minimum number of culture vessels. It also offers the further advantage of k i n g able to be automated to a greater extent, and as such, labour costs rnay be reduced. Two methods of semi-continuous culture are in use on the west Coast of Canada: open culture (open tanks) and closed (bag culture) (Jones et al, 1993). in each case, the production level and length of time varies with species and production method. As previously mentioned, algal production can occur in two types of vessels: open ponds and enclosed vessels. Open ponds provide a means of achieving a large surface area to volume ratio, and can encompass areas up to 5 0 m2 (Tredici and Materassi, 1992). This large space necessitates they be located outdoors and rely on arnbient light. Common designs include circular or rectangular ponds with paddlewheels (Richmond, 1987). The culture may be started either by inducing a natural bloom, or by following a series of subcultures before inoculation. A major disadvantage of open ponds over other systerns is the lack of control over the entire culture system (Witt et al, 1981). Being an open system entails problems with nutrient limitation, contamination with undesirable species, or predation by protozoans, rotifers or crustaceans. A mass development of grazers within the algal culture systern can destroy it within a matter of days. Open ponds have lower algal yields as a result of non-optimal temperatures, production loss due to dark respiration at night, and a non-optimal Iight regime (Witt et al, 1981; Tredici and Materassi, 1992). Enclosed vesse1 production systerns include three types: horizontal tubukir systems, vertical tubular systems, and panel systems (Richmond, 1987). Enclosed systems are aimed at maximhing high cell density yields, and focus on such features as maximized surface area to volume, efficient usage of light sources, and a more efficient mass transfer of algal products (Tredici and Materassi, 1992). As the name implies, horizontal tubular systems are composed of glas or Plexiglas tubes laid out horïzontally on the gmund. A headerfgas separator tank is located at the head of the system, where nutrient addition and gas exchmge occur. Vertical tubular systems solve the problem of space requirements imposed by horizontal systems (Tredici and Materassi, 1992). The system generally consists of a series of tubes/columns otiented vertically, with inlet and outlet ports for gas and nutrient addition. Panel systems offer the advantage of maximized surface area to volume, while at the saine cime allowing the producer to take advantage of naturd light sources through a flexible axis of orientation (Richmond. 1987; Tredici and Materassi, 1992). Environmental conditions play a critical role in the production of algae, as optimal production can only be achieved under very strict environmental parameters. One of the most important parameters is iighting. Light sources may consist of fluorescent tubes, metal Halide lights, natural sunlight, or more recently, the use of immersion core illumination fias been developed (Hadley et al, 1987; Wohlgeschaffen et al, 1992; Jones et al, 1993). In more northem latitudes natural light must be supplemented with artificiai light (Hurley et al, 1987). Care must be taken when using natural sunlight to avoid direct sunlight. Other parameters of importance are temperature and pH (DePauw, 1981). Temperature fluctuations can cause tremendous variation in production levels, with levels of greatest production being achieved in late spring, and lowest IeveIs of productions in mid-winter. If temperatures drop below SOC growth ceases all together, whereas temperatures above W C approach the lethal limit of the algal species (Hurley et al, 1987). The pH within algal culture systems should be maintained between 7.2 to 8.2 (Jones et al, 1993). As the culture grows, the pH of the system will steadily increase, and problems may develop if the pH exceeds 8.5. Problems usually occur in the fonn of slowed growth rate or an algal crash. The pH of the system may be maintained through the injection of CO2 at a rate of 4% with the air supply (Hurley et al, 1987). If natural light is being used (and a resulting resting period occurs during the dark period), supplementai CO2 addition may only be necessary dut-ing the fastest growth periods of late spring and early summer (DePauw, 1981). 3.2 Nursery Culture The nursery rearkg of bivalve molluscs is the intermediate step between the controlled production of Iarvae in the hatchery and grow-out in the wild. The nursery phase of an operation represents a critical link in the clam grow-out process (Manzi and Castagna, 1989b). Placing the seed directly in a grow-out situation results in unacceptably high mortality, whereas rearing the seed in the hatchery to sizes large enough to withstand the stresses of the grow-out environment does not prove to be cost effective (Adams et al, 1993). In recent years this phase of mollur culture has been receiving more attention, with the aim of raising post-set juveniles fmm a few millimetres to 1 - 1.5 cm, in a minimum amount of t h e , at densities as high as possible, and at minimal cost and risk (Claus, 1981). The conditions in the nursery are less sophisticated than in the hatchery, therefore, seed can be held for longer periods of time and at lower cost untii sold to the grow-out operator (Adams et al, 1993). Furthemore, the nursery enables a gradua1 transition from the hatchery to the grow-out stage, and therefore ensures increased survivorship (Manzi and Castagna, 1989b). SeveraI nursery methods exist for bivalve molluscs: intertidal racks arranged on the sea shore; trays suspended near the surface from rafts moored in open water; trays suspended in mid-water on long lines without costly floating structures; land based upweliing or downwelling systems; and land based raceways (Claus, 1981; Bayes, 1981; Le Borgne, 1981; Spencer and Hepper, 1981; Williams, 1981; Adams et al, 1993; Jones et al, 1993). A surnmary of various nursery culture systems is presented in Table 6. Table 6. Critical factors associated with various nursery systerns (Adams et ai, 1993). Critical Factors Raceways w Location land-based Maintenance high high Capital cost low Replacement cost Energy requifements high Survival rates high SY- Type Upflows Cageflrays land-based field-based high rnoderate to high low high high moderate to high low high high low to moderate A recirculating downweller involves the re-use of water within land-based tanks (Manzi and Castagna, 1989b). Water is lifted fiom the holding tank and passed down through a screen supporting the juveniks, thereby creating a recirculating downwelling current. Food is added to the system and the water must be changed on a regular basis. This system is limited by its size and is ody economically feasible for very small clams (< 500 pm)as food and tank requirements prove to be too great a cost for larger clams (Adams et ai, 1993). Another land-based nursery system comrnonly used in bivalve culture is an upwelling system (Manzi and Castagna, 1989b). in this system, inflowing water enters the outside of a screened unit containing the juvenile clams, passes up through the clams, suspending them, and exits through the outfiow situated within the seed containing unit. This system is effective for al1 sizes of clams, however, pumping costs for larger seed may prove to be prohibitive (Bayes, 1981; Manzi et al, L984; Adams et al, 1993). A low cost adaptation of the upwelling principle is the "coke" bottle system as described by Jones et al (1993). In this system, plastic "coke" bottles are inverteci using the bottleneck as the water inflow point. A marble is placed as a check valve in the neck, and a plastic tube near the bottom (top when inverted) acts as the outflow. Juvenile clams are placed in the bottle, and the flow is adjusted to fluidize the clams. The water flow is adjusted such that the clams are suspended in the water column above the marble, but not so much as to keep individuals' tumbling or constantly moving within the water column. One problem associated with this system is uneven growth (Jones et al, 1993). This is the result of juveniles creating a large unified m a s through the attachment of byssal threads, which tends to create channels through which water and nutrients flow. As a result, those individuals closest to the channels receive more food and hence expenence increased growth rates. This problem is characteristic of most upwellers, however, is more frequent in the coke bottie system due to decreased handling and the funnel shape of the upweller neck. Land-based raceways typicaliy utilize long, shallow, wooden trays which have been covered by a protective coating of epoxy, resin, or lined with plastic (Manzi and Castagna, 1989b). The raceway system may contain several layers of trays. A thin layer of sand covers the bottom of each tray, over which the clam seed is distributed. Raw seawater is pumped into one end to estabiish a horizontal flow across the seed clams (Adams et al, 1993). A major disadvantage of raceway systems is that those clams nearest the infîow (maximum effective flow) grow significantIy faster than those near the outflow (minimum effective flow) (Hadley and Manzi, 1984). The use of raceways for nursery culture in the Manila clam industry is not as prominent as it is for east coast Mercenaria production. An alternative to land-based upwelling systems, which have recently been gaining popuIarity, are floating upwellers. These systems depend on tidal or mechanical methods to force water through a seed mass within containers attached to a floating structure (Spencer and Hepper, 1981; Williams, 1981). The most commonly used system is a floating upweller systern (FLUPSY),which supports a series of individuai containers dong a centrally enclosed channel. Water is forced out of the channel by either a propellet or a paddtewheel, and is replaced by the upwelling flow of water from the screened seed container%. The flositing system requires a protected site with warmer temperatures and productive water. Heavy algal blooms are undesirable as they wiit clog the system's screens and restrict water flow to the animais (Jones et ai, 1993). Cages and trays present a "low-technology" alternative to the capital intensive on-shore upweller/downweUer units or field-based FLUPSY units (Manzi and Castagna, 1989b). Pearl nets (mesh size 1.5 mm) have the bottom surface area covered with a single layer of seed. The nets are generaUy tied together to fom a single line, weighted at the bottom, and hung from a long line (Jones et al, 1993). Oyster trays may be Iined with nylon window screening, or alternatively have bags manufactured from window screening placed inside, filled with a single layer of clam seed, and hung in the same manner as the pearl nets. In protected areas with good phytoplankton supply, Japanese onion bags rnay be filled with approxirnately 100,000 clams and hung from a long line or raft. This method has resulted in high survival and good growth during the summer months (personal observation). Beach nurseries can aIso be used as an intermediate step before the final grow-out phase. These areas generaliy have a substrate of pea gravel, are relativdy flat, and are located at rnid-tidal height (Manzi and Castagna, 1989b). Seed clams are planted at densities as high as 2500 - 3500 per square meter in an area cleaned of larger clams (Jones et al, 1993). Small mesh netting is then placed over the nursery area The clams are Iater removed at a larger size for planting to other beach locations. 3.3 Grow-Out Grow-out involves the cuIture of nursery pmduced seed on the beach until harvest size is achieved. On the West coast of North Amerka two methods are commonly used: direct seeding to the beach, and bag culture (Anon. 199ûa). Direct seeding to the beach, the most common of the two, involves seeding clams (minimum 6 - 8 mm) directly to tidal flats. The substrate should consist of a fairly soi3 mixture of gravel, cmshed shell and mud (Anderson et ai, 1982). Clms are seeded at a density of 200 individuals per square meter. Predator exclusion netting is placed over the seeded areas. The use of predator exclusion netting has been shown to greatIy increase the survival of clams beneath the nets (Anderson et al, 1982; Anon., 1990b; Spencer et al, 1992). In addition to increased survival, predator netting has also resulted in increased growth rates. This is thought to be caused by predator netting disrupting current flow, and creating little eddies, thereby concentrating algae for feeding adult clams. In a snidy by Spencer et al (1992) it was found that thin flexible nets offered a survival rate of over 90% when raised off the substrate by 50mm. in commercial practice, this could be achieved by supporting the net either at the edges or in the xniddle using plastic floatation devices. The additional cost of raising the netting is projected to be 25% extra of the original. After three to four years of growth, the ciarns are harvested. Mortalities of 50% can be expected if clams are seeded out at the 6 - 8 mm size. If clams are grown to a larger size (8-10 mm) in the nursery, survival rates can be expected to increase to close to 75% (Chew, 1989). Maintenance during the grow-out period consists mainly of keeping the nets free of fouling organisms, repairing damaged nets, and preventing poaching. In the state of Washington, substrate enhancement is one option allowed to lease holders in an attempt to increase the area avaiIabie for clam culture (Anon., 1990a; Thompson, 1990). Gravel and crushed shell are added several times in 2 cm layers to turn mud flats into suitable clam culture m a s . The addition of al1 the gravel at once is not practised so as to avoid smothenng the naturally occumng organisms. The srnothered organisrns would eventually decompose, creating anaerobic conditions and the release of hydrogen sulphide gas, thereby creating a potentidly toxic environment for Manila clams. The size and type of grave1 added is criticai for mrning non productive beaches into clam producing beaches. The most success has been observed with smail pea gravel, ranging in diameter from 0.6 - 1.9 cm. This size of gravel is thought to provide the right amount of interstitial space necessary to collect the finer sediments required by clams. Angular gravel was found to compact too easily, thereby eliminating the interstitial space (Thompson, 1990). Thom et al (1994) have shown that graveling beaches increases the bivalve density to at l e s t twice that of ungraveled controls. The grow-out of clams in bags is also practised to a certain degree on the West Coast of North Amenca (Anon., 1990a). Bags are typically 30 cm by 90 cm and made from 6 mm vexar. The bags are seeded with appronimately 500, 10 - 12 mm clams and stapled to the beach at the 1 m tide level using rebar staples. The beach is excavated severai centirneters to provide a secure setting for the bags, and to allow the bags to fdt with sediment. Clam survival is approximately 70 - 80% at harvest (Anon., 1990a). This rnethod is more capital and labour intensive, and as a result, is much less popular in British Columbia thaa direct beach seeding with predator exclusion netting. 4.0 The Operating Environment 4.1 The Market Presently, of the areas licensed for foreshore aquaculture in British Columbia, just over 400 ha are designated for Manila clam culture (B. Kingzett, BC Shellfish Growers Association, personal communication). Of these 400 ha, approximately 200 ha are either non-productive ground, or else designated as oyster ground. Of the remaining 200 ha avaiiable for clam culture, less than 100 ha are actively k i n g farxned. The Manila clam industry is undergoing a fairly rapid expansion, and since 1994 production of Manila dams has increased by over 60% (Anon. 1996a). The area designated for clam culture is projected to double by 2005, and according to the federal govemment's Aquaculture Developrnent Strategy, production levels are forecasted to rise as high as 7,500 MT by the turn of the century (Anon. 1995). These high levels of production should be regarded with a degree of caution as they assume al1 200 ha of proposed culture area will be producing dams at a density of 2 0 ~ l r d . Despite what may seem to be a somewhat unrealistically high production goal, the industry is still undergoing an expansion nonetheless. As a result, an increased demand for Manila clam seed will be evident. The current demand for Manila clam seed can be estimated by assuming an average seeding rate of 125 clams/m2 over 100 ha. This results in a current demand of 125,000,000 clams. Should the current area designated for clam culture corne under full production within the next 4 to 5 years, the demand for clam seed would double. If by 2005 the area has doubled to 400 ha, a demand for half a billion seed clams a year would exist. 4.2 Target Market The target market for the proposed hatchery will consist of the 37 producers who are cumently identified (BC Shelifish Growers Association, personal communication) as d a m producers, as well as other clam producers who may enter the market with the projected industry expansion. A locaily situated hatchery would have the advantage of being able CO offer seed clams already conditioned to the local grow-out environment. This distinction should be a key selling point in the cornpanyysattempts to attract customers. Once established, the company rnay wish to expand its sales to outside the country, in particular, Washington and Oregon. In ail Iikelihood, this would prove a difficult market to penetrare, as established hatcheries are aiready present in these areas. The companyys selling philosophy of producing seed for Locd conditions would aIso work against it. Perhaps the only advantage that the company rnay possess wouId be a price differential brought about by a weak exchange rate. 4 3 Cornpetitors Several diréct cornpetitors exist for the company. In British Columbia, there are two companies on Vancouver Island that are capable of supplying growers with clam seed. However, most of the seed is imported from California (B. Kingzett, personal communication). The two locally situated hatcheries do not produce on a large scale, but rnay possess a competitive advantage in that they know the curent market situation and rnay be capable of expanding operations quickly to keep pace with the expanding market place. They could also claim the same selling philosophy adopted by the proposed Company (i.e. selling seed for local conditions). The California based hatchery does not possess the advantage of being able to supply seed conditioned for local grow-out environments. It rnay also suffer during times-of weak exchange rates. As a result of being the largest supplier, the Californian based hatchery may have established cornfortable supplier-customer relationships that rnay prove dificult to break. 4.4 Key Assets and Skills In order to be a successful commercial enterprise, the hatchery must concentrate in the liey areas of marketing and producing. In the marketing sector, major factors tha~must be developed include (Kolter and Turner, 1993): The development of an effective distribution systern. Building a reputation for producing a quality product, available when requested. Building relationships with local producers in an attempt to attract new customers. Suppling customers with a choice of different size classes of seed. In the production sector, the Company should concentrate on: Expenence and expertise in al1 aspects of hatchery and nursery production. Experience and expertise in aspects of mass aigal culture. Development of contacts in the shellfish industry and aquaculture supply industry. The strengthening of these key assets and skills will ensure that the Company becornes a profitable enterprise in the shortest possible time. 5.0 Proposeci Project At this point it is necessary to examine the project in a bit more detail and discuss some of the design parameters of the facility. 5.1 System Design The proposed project is based upon design assumptions and criteria laid forth by Hurley et al (1987), Adams et ai (1991), and Adams and Pomeroy (1992) in their analyses of bivalve hatchery systems. Their design criteria have k e n modified to meet the needs of a Manila clam hatchery sitxated on Vancouver Island, BC. 5.1.1 Permanent Structures The building housing the hatchery and on-land nursery will be located on a 50 rn lengeh of shoreline property, with the necessacy dock and pumping infrastructure supplying the hatchery with its water needs. The basic component of the design includes a building housing the shellfish production area, a greenhouse, a stock culture room, a mechanical room, and a srnall office. While the construction of the building is f&irly basic (either a wood frame or steel arch type building), a sophisticated foundation capable of withstanding the weight of the rearing tanks must be in place (Hurley et al, 1987). The greenhouse portion of the building must have access to suniight year-round, and face within 15' either side of true south. Aside from the hatchery building, an outdoor nursery of upwellers rnust ais0 be constructed. The upwellers will be placed on a concrete pad of similar design to the building foundation. A sea water transmission system consisting of two 30 hp purnps, associated fittings, dock and pumphouse wiIl have to be constructed (Adams et ai, 1991). 5.1.2 Fïoor Plan The sheIlfish process area will be the largest area in the hatchery housing the four 40,000 L iarval rearing containers. Overhead lines of saltwater and air will feed the various tanks. The drains from the larvai rearing tanks will drain into a main drain set in a floor strip drain. Spawning tables and broodstock containers wilI also be housed in this area. The stock culture room is the area used to prepare algal cultures for the greenhouse. The main equipment will consist of flasks and carboys, a transfer chamber with an ultraviolet light, and illuminated shelves. The stock culture room will be located directiy adjoining the greenhouse and in an attempt to limit contamination, will have limited access from the rest of the hatchery (Hurley et al, 1987). - The greenhouse is to be used to fimher develop the dgal culture in mass culture. This m a wiIl house the KaIwaI tubes and batch culture tanks. Due to the extreme temperatures chat wilI be experienced in the greenhouse, a good ventilation system wiII have to be instdIed. A Fan with a thermostat control~wiIlbe instailed to exhaust warm air, while night insulation will cover the windows to prevent heat loss during the night. 5.2 Water Sources and Filtration The water source to be used for the hatchery will be pumped from a bay meeting the criteria laid out in Appendix B. Two 30 hp pumps will be necessary to pump the water to the hatchery. A combination of a sand filter and bag filter (35pm)will be used to filter out any suspended matter in the incoming water. Water to be used for aigal culture wilI be purified using sodium hypochlorite (10 ppm) for several hours and dechlorinated using sodium thiosulfate. Water for conditioning adults and lasval rearing need not be stedized The water wili however have to be heated using the heat pump. A backup generator wilI also be in place in the event of a power outage. 5.3 Nursery The nursery wiIl be divided into two production segments. The first will involve a passive flow systern in the shellfish processing section of hatchery. This segment of the nursery will rear the clams from pst-set to 1-2 mm. Upon reaching 1-2 mm, the seed will be transferred to the second segment of the nursery. This segment will consist of a forced flow upweihg system (360 upwelIers in total) located outdoors on a concrete pad covered with a steel comgated roof. Seed will be reared in these upwellers until they reach marketabIe size (usuaily 6-8 mm). 6.0 Financial Analysis This section will examine the financial feasibility of the proposed hatchery. The previous sections have dedt with the technical aspects of Manila clam husbandry, and have shown that such an undertaking is technicaily possible. This section will examine the financiid considerations of the project and determine whether it is financiaily justifiable. 6.1 Estimate of Capital Expenditures A detailed iist of the initial capital investment and subsequent investment expenditures over 10 years is given in Table 7. The land allocated for the project is 50 rn of shoreline property. It should be noted that the cost of a vehicle is not included in the capital expenditures, as this is to be leased The initia1 capital investrnent for the proposed venture is $537,880, of which $447,122 (65%) is to be borrowed fiom a bank or other financial institution, with the remaining $240,758 to be supplied by owners or investors. Table 8 lists the annual depreciation of capital assets. For income statement purposes, depreciation is assumed to be straight-line, with a salvage value of $0. 6.2 Financial and Biological Assumptions In generating the 10 year pro-forma financial statements for the proposed project, a number of assumptions were made. The assumptions made in this text are modifications of those by Adams et al (1991), Adams et al, (1993), and Adams and van Blokland (1995) for a Mercenaria hatchery and nursery system. These assumptions are: O Production volumes and revenues remain constant over the 10 year period examined. By not subjecting revenues to infiation, a conservative price reduction is worked into the company's financial projections. I I * .., I CI. l & ' C 4 O N ' I . I 0 I . . 8 I . 7 - F 8 $ O .- . f r in 88 -3 ' I 1 Z8 ln 1 1 1 1 8 I I I I I I I * Table 8. Annual depreciationschedule of capital assets Assumes a straiqht-line depreaation schedule with a salvage value of $0 Years of Use Building Air handlingsystem cornpressad air Support hb Badc-up generator Security system DodJpump house Saabvater system PumP PVC pipe 8' vah,eS.iïîüngs. e b Water treatment Sand fntraüon - - Wsystm WcmfiHraIion (35 ptn) Heat pump Seausiter resemir Fiings, Mc M i s Equipment Bruuâstock maintenance Tanks Water chiller M i equ-pment Laival culhire Spamii tables Lanral -MIS k k c equipment Algal culhim Iroailationhood -flasks Caibay w e m Kalwalbibes Aïr pumpdaerators w u g i- Autodave Batch culhire tanks MisceqrDpment Merai h a i i i lïghts Algae resenroin Penstaloc pumps Post-set maintenance Domnnrallertanks Oownweiien Watet system: motorslpumpsletc. lDaures Nursery 1. Passive ibw systern (pipes. qiinders, standpipes,etcJ 2. Pad (100 sq. m) (dfainags,water. electricity) Comigated ml 3. Forced u p h system (cycünder. seteenS. inflow) 4. Racksystm 5- Culüng sueens 6. Miscellaneow equipment Office Equipment TOTIL Initial Annuil Invesbnent Dapraciation Al1 loans (capital and operationai) are at 12% interest per annum. Any short-faii in cash is covered by an operating Iom. This loan is to be supplied based on the short-frùl projections in the cash flow schedule, and a Line of credit estabIished by the Company. 4 Capital loans are for IO years and guaranteed by a government business development program. Lmd costs are caiculated at $4,00O/m of high grade water front property (Century 2 2 , Courtenay, BC, personal communication) Initia1 start-up capital loans assume that 65% of the cost is finance& with the remaining 35% coming fiom ownersrinvestors. Funds for replacement capital assets are borrowed. Capital assets are depreciated using straight-line methods. The salvage value of capital assets is $0. Retums are after taxes, A tax rate of 50% is used. An annual infiation rate of 2% is incurred for ali operating expenses. Revenues are heId constant. The s e l h g price of seed is $8.00/1000. Ali seed are sold at the 6-8 mm size, and shipped F.O.B.from the hatchery. The discount rate for net present value (NPV)caiculations is 10%. The Stream of values used for intemal rate of retum (IRR) and NPV calculations is the annual "net cash flow" of the operation. Survivorship of the larvae is 20%. Survivorship of the spat is 10%. The resuIting overall survivorship from egg to 6-8 mm seed is 2%. The average fecundity of femaies is 2.3 x 106 eggslfemale. 3.125 x 10 9 larvae are produced, resulting in the production of 6-25x 107 6-8mm seed annuaily. 6 3 Pro-Forma Income Sbtement The income staternent (Table 9) for the proposed project has b e n projected 10 years into the hture. A hedthy net profit of 17% is redised at the end of the f i t and second years, followin,o which it rises to 18% for the remainder of the projected period. Bearing in mind that revenues are held constant and operating expenses are subjected to a 2% inflation factor*the operation actuaily become more profitable as time progressess- At the end of 10 yem, the accumulaîed profits of the operation are $893,673. ui constructing the income statement, a number of assumptions were made, these being: Packing and selhg expenses are assumed to be 1% and 2% of revenues respectively. Site maintenance is allocated at 1% of building cost. Vehicle maintenance and insurance is estimated to be $4,ûûû/year. Property taxes are allocated at 1% of the original value of buildings and permanent structures. Salaries and wages are dlocated at $60,00O/year for two technicians and $40,00O/year for one manager. Benefits and other labour related costs are added at 10%. A contingency fund of 5%of annuai operathg expenses has been alloted for the first 2 years. A truck lease requiring an inital $1,000 payment, followed by $4ûû/month has been taken out by the Company. Al1 other costs are the same as those prescribed in the annual operating expense summary (Table 10). 6.4 Pro-Forma Cash Flow Schedule The 10 year pro-forma cash flow is given in Table 11. This scenario displays the operation under fixed and ideai conditions. The assumptions made in sections 6.2 and 6.3 were used in the construction of the cash flow schedule. Table 11 also includes a sumrnary of debt outstanding. Table 9. 10 Year Pro-Forma lncome Statement Year 1 Year 2 Year 3 Year 4 500,000 500,000 500,000 500,000 Year 5 500,000 500,000 Year 7 500,000 53,060 5,306 70,040 4,245 5,306 10,612 54,122 5,412 71,441 4,330 5,412 1 0,824 55,204 5,520 72,869 4,416 5,520 1 1,041 56,308 5,631 74,327 4,505 5,631 1 1,262 57,434 5,743 75,813 4,595 5,743 1 1,487 58,583 5,858 77,330 4,687 59,755 5,975 78,876 4,780 5,858 11,717 5,975 1 1,951 Total COGS 140,000 142,800 145,656 148,569 151,541 154,571 157,663 160,816 164,032 167,313 Gtoss Margin 360,000 357,200 354,344 351,431 348,459 345,429 342,337 339,184 335,960 332,687 4,800 3,184 46,294 46,478 46,693 1,061 3,651 4,245 2,547 6,367 6,367 O 4,800 3,247 39,681 46,478 47,627 1,082 3,724 4,330 2,598 6,495 6,495 4,800 3,312 33,067 46,478 48,580 1,104 3,798 4,416 2,650 6,624 6,624 O 4,800 3,378 31,028 46,478 49,551 1,126 3,874 4,505 2,703 6,757 6,757 O 4,800 3,446 23,906 46,478 50,542 1,149 3,951 4,595 2,757 6,892 6,892 O 4,800 3,515 16,784 46,478 51,553 1,172 4,031 4,687 7,030 7,030 O 4,800 3,585 $3,880 46,478 52,584 1,195 4,111 4,780 2,868 7,171 7,171 0 Total Expense 197,375 l9Ol897 176,847 171,687 166,556 161,454 1 60,957 155,408 149,891 148,623 Net Plofit before taxes 1 62,625 766,303 177,497 l79,744 l8lI9O4 183,975 l8lI88l 183,776 186,077 184,064 Revenues Year 6 Year 8 Year 9 Year 10 ~00,000 500,~Oo 500,000 Cost of Goods Sold: Electricity Lab Supplies Technicians Pump maintenance Packing Selling 50,000 5,000 66,000 4,000 5,000 10,000 51,000 5,lO0 67,320 4,080 5,100 10,200 52,020 5,202 68,666 4,162 5,202 10,404 Expnses: Truck Lease Insurance Interest Depreciation Wages Site maintenance Property taxes Vehlcle HeatFuel oil Miscellaneous Supplies/expendables Contingency Fund 5,800 3,000 66,135 46,478 44,000 1,000 3,440 4,000 2,400 6,000 6,000 9,123 4,800 3,060 59,521 46,478 44,880 1,020 3,509 4,080 2,448 6,120 6,120 8,862 4,800 3,121 52,908 46,478 45,778 1,040 3,579 4,162 2,497 6,242 6,242 O O 2,812 Taxes (at 50%) 8l,3l3 83,151 88,749 89,872 90,952 91,987 90,690 91,888 93,038 92,032 Net Profit after taxes 81,313 83,151 88,749 89,872 90,952 91,987 90,690 91,888 93,038 92,032 616,714 708,602 801,641 893,673 Accumulated Profits/(Loss) 434,036 526,024 Table 10. Annual operating expenses Production Costs Electricity Lab supplies Site maintenance HeatiFuel oil Truck fuel maintenance Pumplequipment maint. Packing Selling Salaries and Wages Manager Technicians Beneiiîs Overhead Costs Insurance MisceIlanmus Suppliedexpendables TOTAL Table 11. 10 Year Pro-Forma Cash Flow for lntegrated Halchery and Nursery Beglnning Carh Balance Caih Recelmi From ~ p k t l o n s Owneh lnvestrnent Bank Loan Totd Carh Inilowi $ 180,000 261,918 344,300 422,502 497,429 577,596 655,239 724,081 794,222 868,628 Caih Ouîfiow Capital cosls Variable wsts Rwed cosls Long.lsmi tkbt P a y m t Principal lnteresl TOTAL DISBURSEMENTS Opemting b a n paymenl phcipal Interest - Pm-tar Bank Balance Incom Tarer (50%) EndingCarh Baiance $ 180,000 261,918 344,300 422,502 497,429 577,596 655,239 724,081 794,222 868,628 936,814 Summaiy of debt outstanding Long-term debt Balance $ 551,122 496,010 440,898 385,785 330,673 275,561 258,564 199,217 139,869 115,667 52,415 Operating debt Balance Nurnber of Seed Sold Price pet Clam ($) 62,500,000 0.008 An analysis of the cash flow shows a positive cash flow each year, with a resulting closing bank balance in excess of 5900,000at the end of the 10 year period. Included in the owner's investment and bank Ioans is an allocation of S 180,000 for working capital to cover any cash short-fdls dunng the first year. During subsequent years, the cash balance will be sufficient to cover al1 cash disbursements during the course of operations, while waiting for revenues to be realised. In years 6 and 9, loans for $42,350 and $39,050 are taken out to cover the cost of replacing capital assets. 6.5 Pro-Forma Balance Sheet Table 12 presents a pro-forma balance sheet for 10 years into the future. From the balance sheet a number of ratios can be calculated to determine the financial stability of the operation. Foliowing the fmt year of operation, the current ratio is a healthy 4.8. This is above the generaliy accepted benchmark of 2 (Anthony et al, 1995). As a result of inventories k i n g completely sold off by the end of the fiscal period, inventory and suppLies are valued at $0. This causes the acid-test (or quick ratio) to be the sarne as the cunent ratio. The debt to equity ratio following year 1 is 148%. This value is somewhat high, indicating that the Company is highly leveraged (Anthony et al. 1995). During subsequent years of operation the debt to equity ratio is reduced as the Company pays down its long-term debt, while at the sarne time increasing equity. Following the second year of operation, the debt to equity ratio has dropped to 10595, and continues to fdl throughout the course of operations. 6.6 Financial Sammary Al1 of the financial projections are summarised in Table 13. At the end of the 10 year projection, the project has accumulated $84,173 in net cash retums, after paying down its long-term debt, and re-financing capital investments. Table 12. 10 Year Pro-Forma Balance Sheet Year 1 Year2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 1O 794,222 868,628 936,814 O O O 794,222 868,628 936,814 2oo,QOo 100,240 62,215 382,455 200,000 94,nO 148,120 442,890 200,000 89,300 136,079 425,379 Asseta Current Assets Cash InventorylSupplles Total Current Assets $ 261,918 $ $ 261,918 497,429 O 497,429 577,596 O 577,596 655,239 655,239 724,081 O 724,081 Flxed Assets Land Buildings (net ol deprec.) Equipment (net of deprec.) Total Fixed AmseIr $ 200,000 $ 138,530 $ 286,859 200,000 122,120 182,076 504,196 200,000 116,650 135,855 452,505 200,000 111,180 112,077 423,257 200,000 105,710 102,086 407,796 Total Asrets Liabiliîies Current llabillties Bank loan - cuvent rnaturily 3 Long-term llabilities Bank loan Total Llabilities Owners' Equity PaM-in-capital Retalned Eamings Toul Owner'r Equity Total Llabilitiesand Equity - $ 625,389 O Table 13. Financial Summary Project Year Loan Annuai Net Sales Cash Operatlng Expenses Repayment Depreclatlon Revenue Taxable lncome O 1 2 3 4 5 6 7 8 9 10 4 00 IRR NPV 162,625 166,303 177,497 179,744 l8ll9O4 183,975 l8lI38l 183,776 186,077 184,064 Taxes Cash Flow lnvestment (50%) Eicpenditures 667,880 81,313 72,678 O 83,151 74,517 O 88,749 80,) 14 800 89,872 81,238 5,080 90,952 82,317 800 91,987 t 21,468 42,350 77,821 7,380 90,690 91,888 79,019 7,150 93,038 115,314 39,050 92,032 75,257 5,080 Net Cash Flow (667,880) 72,678 74,517 79,314 76,158 81,517 79,118 70,441 71,869 76,264 7O,l77 Cumulative Net Cash Flow (667,080) (595,202) (520,685) (441,371) (365,214) (263,696) (204,578) (134,138) (62,269) 13,995 84,173 Based on the annuai net cash flow, the IRR and NPV are calculateci, resulting in 2% and $1.13 1,492 respectively. These values indicate that the proposed facility is financially viable. The payback period for the project is 8.8 yem. 6.7 Sensitivity Ariaiyses The previous financial projections assumed that the facility is openting in a relatively stable environment in which certain attributes that may have a profound effect on the operation remain constant for 10 years. In light of this, the effects of changes in selling price and levels of production on IRR and NPV were examined. Table 14 presents the results of changes in selling price on the net cash flow of the operation. The selling price was varied from the standard ($0.008) in 10% increments. Based on the net cash fiow over a 10 year horizon, IRR and NPV were calculated for each change. Table 14 indicates that the operation is very sensitive to price changes, especially downward trends. Should the selling price decrease by IO%, the IRR decreases to -2%, making the project unacceptable from an economic standpoint. Further 20% and 30% reductions in selling price reduce the IRR values even more until they cannot be calculated due to al1 negative cash flows. The proposed venture is not as sensitive to upward pnce shifts. A 10% increase in price results in an increase to 8% in KR. In following a conservative nature toward the project, one would be wise to assume that the selling price is more likely to remain stable than increase. Tabie 15 examines the effect of changes in levels of production on the financial stability of the venture. The base level of production (6.25 x 107 seedlyear) was varied by increments of 25%. A decrease in production levels of 25% (and any subsequent drops) make a determination of IRR values impossible f?~~?~~!sxd;~., AAhAhhhhhh 1 O O O l n F O V ) r n * * ~ a D b Od) OQCom- ----- V)~~Ot~OCUOCUQ)VI c u - < o ~ ~ ~ ~ = q c u , ~ u ? '. = ? . 5 Y Y Y Y Such a sensitivity to decreased production levels cui be attributed to under utitisation of capital assets. At decreased production levels, excess capital is tied up in idle capitd assets. A similar trend is seen with an increase in production levels. As the production Ievels are increased by 2595, an increase frorn 2% to 16% is observed with IRR values. It should be noted that the same problem observed with under utilised capital assets in decreased production levels will be observed with an increase in production, but with a resulting over utilisation of capital assets. In the case of increases in production, the hatchery cm only accommodate a certain level of increase before additionai capital assets must be purchased. In al1 likelihood, an increase in production levels by 50% would entail increased capital acquisitions. 6.7.1 Disaster Scenario In the previous sensitivity analyses only one variable at a time was rnanipulated in order to examine its effect on the net cash flow of the operation. However, in the r d world, more than one variable at a time is exerting itseif on the operation. In an effort to simulate this, a disaster scenario was examined in which a number of variables were manipulated to produce a "worst case" scenario. In this analysis, dong with the assurnptions stated in sections 6.2 and 6.3, the following assumptions were also made: A complete mortality of lame was arbitrarily assigned to year 5. This mortality could be caused by any number of events, not the least of which could be disease or Msmanagement. The annual inflation rate was raised from 2% to 4%. A "leaming curve" was associated with the fmt three years of production. Assuming an inexpenenced management and staff, the cost of production for year one was 30% higher than projected. Similar increases of 20% and 10% are observed in years two and three. By year four, costs are at their projected levels, and only subjected to inflational increases in subsequent years. Table 16. Disaster Summary Project Year Net Sales Cash Operating Revenue Expenses toan Annual Repayment Depreclatlon Taxable lncome Taxes (50%) 57,674 92,253 136,088 155,676 (341,681) 128,932 1 14,599 99,700 84,211 68,109 28,837 46,127 68,044 77,838 O 1 2 3 4 500,000 500,000 500,000 500,000 5 6 7 8 9 10 IRR NPV 500,000 500,000 500,000 500,000 500,000 178,486 119,919 55,112 55,112 311,949 241,991 160,814 11 0,446 122,723 63,252 --* $211,495 00 ta No value for IRR could be calculated due to al1 negatlve cash flows 64,466 57,300 49,850 42,105 34,054 Cash Flow lnvestment Expendltures 667,880 O (81,411) (10,804) O 70,672 900 77,316 5,943 (596,856) 973 (76,130) 53,586 (42,107) 9,712 3,267 9,785 24,850 55,580 39,877 7,520 Cumulative Net Cash Net Cash Flow Flow (667,880) (667,880) (81141 1) (749,291) (1 0,804) (760,094) 69,772 (690,323) 71,373 (618,949) (597,829) (1,216,778) (129,717) (l,M6,495) (51,819) (lI398,3l4) (6,518) (1,404,832) (30,730) (1,435,562) 32,357 (1,403,205) The results of the disaster scenario are aven in Table 16. A resulting cumulative net cash flow of (51,403,205) is observed at the end of the LO year horizon, resulting in a payback period well in excess of 10 years. The NPV under the disaster scenarïo $2 11,495. The IRR is impossible to cdculated due to al1 negûtive cash flows. The detailed'effects of the disaster can be seen in the cash flow schedule (Appendix C, Table C-1). Operating Ioans are required to cover cash short f d s during the fmt two years, and during years 5 through 9 following the moaality. The effects on net income can be observed in the income statement (Table C-2). As a result of hi& inflation, a learning curve associated with the first three years of operation, and a diesff in year 5, the veriture never fully recovers, and at the end of the 10 year projection is economically unviable. 7.0 Risk Assessrnent During the financial analyses, a number of risks and critical factors presented themselves. This section will examine some of the more pertinent factors that should be monitored during the course of operation of the proposed project. 1. The hatchery is designed for a single species only. Should a catastrophic event occur (as in the disaster scenario) the fmancial niin of the operation is likely. By producing more than one species, the hatchery could help protect itself from just such an event through diversification. A rnuch larger demand for oyster larvae exists on Vancouver Island (B. Kuigzett, personal communication), therefore the operation would be wise to consider such an expansion. Other shellfish species worthy of consideration would be scallops (Puthopecten yessoenîis) and geoducks (P. generosa). 2. There is a trend among some growen toward the purchase of smailer seed (2-3 mm and 4-6 mm) for nursery culture in Flupsy systems or field nursery uni& (B. Kingzett, personal communication). Should such a trend become prominent, the market for 6-8 mm seed may become obsolete. Markets for seed would exist, however, selling seed at smaller sues would result in decreased revenues. The company would have to concentrate on supplying smdler seed, while at the same tirne reducing its capitd investment in nursery equipment necëssary to grow seed to the Iarger 6-8 mm size. As the area designated for culture is projected to double by the year 2005, it is IikeIy that the decreased sales revenues may be off-set by increased numbers of sales of smalIer seed to more producers. The company would be well advised to carefully monitor this trend, as decreased selling prices have betn shown to have a dramatic effect on the financial stability of the operation. 3. Experimentation involving the mass setting of larvd clams directly ont0 beach substrate is currently being undertaken' in BC (Rob Saunden, Island Scailops Ltd, personai communication). Depending on the success of these experiments and acceptance by clam farmers, the operation should carefuUy monitor market trends in the purchase of smaller or larvd clams. One of the hatchery operators on Vancouver Island is concerned by this trend, and the possible consequences it rnay have on sales. In light of this however, the operation should be willing to aggressively follow this trend, as the farrner would be assuming the risk of larval settlement. In al1 likelihood, only one or two hatcheries would be required to supply the larval needs of the industry, therefore it is vital that the company aggressively pursue this trend should it continue. In addition, by selling larvae ready to set, the hatchery would also benefit by eliminating the capital-costsof its nursery. 4. The proposed operation aiso has the disadvantage of market penetration. Two small scale hatcheries are currently in operation on Vancouver Island, with the majority of seed being imported €rom Californian hatcheries. As a result of this, many growsut operators are likely to have entered into a cornfortable relationship with their supplier. The one advantage that the operation possesses (over the Californian hatcheries) is the production of seed conditioned to locd grow-out environments. For such a iarge scale proposition, the compiny would have to enter into supply agreements with local growers. Such an undertaking would require a large marketing effort prior to construction of the facility. 5. As demonstrated in Table 14, the operation is very sensitive to downward shifts in selling pnce, With this in mind, the company will have to concentrate on keeping its cost of production dom. This will become especialIy important should the trend toward nursery rearing by grow-out opemtors become more prevalent. 6. A similar sensitivity to decreased levels of production was aIso observed (Table 15). As the area for clam culture is projected to double within the next 10 years, the company would be in a good position to capture this increase in market space through an active marketing program, thereby offsetting any potential decrease brought about by selling a smaller sized product. 7. A leaming curve and its effects on the cost of operations should dso receive attention. Management's ability is likely to manifest itseif on survival levels of larvae and spat, or through production costs (Thumberg and Adams, 1990). More experienced managers will likely result in increased sumival of larvae and decreased costs. A less expenenced manager is likely to have the opposite effects. Thus, the hiring of a qualifieci manager, or time spent leaming about production aspects before the investrnent would be worth the added expense. 8. Disease and water quaiity concems are also of paramount importance to the hatchery. Site selection for the hatchery should meet those critena laid out in Appendix B. By seIecting only sites within the optimum parameters, larvae are less likely to be stressed during hatchery rearing. Along with maintaining strict water qudity guidetines there should be a cornmitment to hygiene and disease prevention. As evident from the disaster scenario, a complete mortality heralds financial min for the hatchery. Mesures to ensure disease prevention and spread must be in place. 8.0 Summary This prelirninary analysis of a commercial scale Manila clam hatchery on Vancouver LFland suggests that it is possible both from technical and financial perspectives. The technical aspects of Manila clam husbandry have been apparent for more than the past two decades, and research continues to make improvements. The dissemination of information pertaining to clam aquaculture in the province of British Columbia is excellent, thus further aiding the future of the industry. With a projected decrease in naturai stocks and sustained (if not increased) demand, the future for Manila clam aquaculture looks bcight. Tn British Columbia, there are currently 400 ha of foreshore lease that are designated for clam aquaculture. Of these 400 ha, approximately 200 ha are non-productive ground or classified as oyster leases. Within the remaining 200 ha, less than 100 ha are currently being fanned. This results in a current estimated demand of 125,000,000 seed clams. The remaining areas are expected to come into production within the next 4 to 5 years, thereby doubling the current production. Following this, a projected doubling of clam designated areas is expected by the year 2005. The financial analyses conducted on the proposed hatchery indicate that such an undertaking is only just feasible from an economic standpoint. Should the hatchery operate within a stable environment, it will generate a profit and be a commercially viable operation. Dunng the course of the analyses, several key factors were identified that may have a profound effect on the viability of the operation. Of particular interest are the operation's sensitivicy to decreases in selling price and LeveIs of production. Should the operation experience decreased levels in either one of these areas, it quickly becomes non-viabte Crom a commercial perspective. A decrease in the levei of production or selling price by 25% would be a disasirous occurrence for the hatchery. This is the result of a reliance on a singe species, and large amounrs of capital tied up in hatchery and nursery assets. ùi an attempt to combat this sensitivity, the hatchery should diversifi its production to include other molluscan larvae. The trend toward the purchase of smaller seed or larvae by some operators must be carefully monitored by the Company. Should the trend become the nom, revenues will decrease as a result of selling seed at a smaiier size. This decrease in revenue would best be countcracted by an intensive marketing pmgram during the proje=ted increase in clam culture areas. Overail, the proposed project is barely economicaily viable, and displays areas of extreme sensitivity to price reduction and production level decreases, Particular care must be paid to the above mentioned key-points in order to ensure the economic success of the proposed hatchery. Bibliography Adams, C., J-C. Cato, J.E. Easley, S. Kemp, W. Mahan, JJ.Manzi, M. Oesterling, R. Pomeroy, E. 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Offshore nursery-culture using the upwelling principle. In: Claus, C., De Pauw, N., Jaspers E. (eds), European Mariculture Society Special Publication No. 7, Bredene, pp. 3 11-315. Witt, U., P.H. Koske, D. Kuhimann, J. Lenz and W. Nellen. 1981. Production of Nannochloris sp. (Chlorophyceae) in large-scale outdoor tanks and its use as a food organism in marine aquaculture. Aquaculture, 23: 171-18 1. Wohlgeschaffen G D , D.V. Subba Rao and KM.Mann. 1992. Vat incubator with immersion core ilIumination - a new, inexpensive set-up for m a s phytoplankton culture. Journal of Applied Phycology, 4: 25-29. Yankson, K. and J. Moyse. 199 1. Cryopreservation of the spematozoa of Crassosrrea tulipa and three other oysters. Aquaculture, 97: 259-267. Appendix A Table 1. Microorganisms and parasites reported to cause disease in clams of the genera Tapes, Ruditapes. and Venerupis (PiUard et al, 1994). Patho~en Micrwrgaaisms Rickettsiae Protoz~ Apicomplexa cl. Perkinsea Perkinsus CI. Sporozea ss. cl. gregarinia g. Nematopsis S. cl. Coccidia Pseudoklossia pectinis Pseuùoldossia glomerata Acestopora Haplosporidium tapetis Minchhia tapetis Ancistnmr Boveria, Proboveria Thigmophrya bivalvorium Pelecyophrya tapetis Metazoans Cnidaria Eugymnmthea Uiquiiina Turbellaria Paravortex scrobicuiuriae Convulutajapunica Trematoda Bucephah baeri B. haiemeanus Clams species (localitv) ~arasitizedoreans Tapes decussatus T. philippinanun T.decussatus T.semi-decussatus Digestive gland and gills Gills Byssus and shell T.decussatus T. puilasaa T.fl0ridu.v T.jloridus T. virgineus Kidney Visceral ganglion T.decussatus T.decussatus Digestive gland Digestive gland and gills Tapes sp. T. decussatus T. pullastra T.aureus Giiis Gills Gills T. decussatus (Italy) Palliai cavity T.decussatus (Itaiy) Intestine Intesthe T. philippinarum T. aureus T.aureus (Italy) T.decussatus (France) T. pullastra (France) T. rugatus (Black Sea) Digestive gland Table 1. (continued) Pathogen C. latra C.pectirzata C.pennata Gymmnophaiusfossarwn Cercaria scn'venensis Parvatrema sp P. timondavidi Lepocreadium album Himasthia elongara H. ambigua H.quissetemis Cestoda Tylocepham sp. Copepodk Mytilicoùt intesturalis Ostrùzcola koe Modiolicola bifUia Conchy&mïs quintus Cimedia Malacolepas conchicuia Decapoda Pinnothetes latissimus Pantopoda Nymphonella tapetis Species ( T ~ ~ a i i t v ) T.decussatw (France) T.pullastra (Europe) T.decuisatus T.aureus Parasitized oreans Gonads Gonds Gonads T.wgatus (France) T.decussatw (France) Pailial cavity and rnantle T, aureus (France) Palliai cavity and manile T.romboides (France) Mantie T.pullastra (Scotland & Nonvay) Palliai cavity and rnantle T.philippinnrum (lapan) T.philippinana (Japan) T-decussatrcs Pallia1 cavity and mantle T.aureus Palliai cavity and mantle T,decussatus T.auresu (France) Foot T.decussatus Pallia1 cavity and mantle T. pullamru T.decwsatus Gills T.philippuianrm Foot T.semi-decussatus Digestive gland T.decussatus T.philippinanan T.philippinanun GUS T. philippinanun Intestine Gills Gills T.mitis T.philippinanun (Japan) Pallia1 cavity Table 2. Synopsis of diseases of clams focusing on Tapes (Bower et al, 1994). Eückettsia-like and Chlamydia-like organisms Scientinc name (or taxonomie dfibtion): intracellular organism belonging to the Rickettsiales. Host: many species of cIarns Geography: global Impact on Host: infection usuaüy light and not associated with disease Control: no known control or prevention Hinge Ligament Disease of Juvenile Clams Cytophaga-like bacteria (CLB) Host: Juvenile Mercenana mercenaria, Tapes philippinam and Siliqua patula Geography:ubiquitous Impact: breakdom of hinge ligament impedes normal respiration and feeding, often allowing secondary infection. Control: difficult due to ubiquitous nature. Disease bas Little or no effect on healthy growing juveniles. Brown ring disease of Manila clams Vibrio sp.; Vibrio PI isolate Host: Tapes philippina~n Geography: West coast of France and possibly Spain Impact: bacterial infection of the mantle edge resulting in a brown &posit of organic materiai. Has caused mass mortalities in cultured clam beds on the W e s t coast of France. Larval vibriosis or Bacillary necrosis Vibrio anguillamrn, Vibrio alginulyticus Host: Mercenaria mercenaria, Tapes philippinanun and other cuIaired bivalve larvae Geography: ubiquitous Impact: systemic infection of the sofi tissues of the larvae, resulting in necrosis and death. Control: difficult due to ubiquitous nature. Often related to poar husbandry. Clam Perkinsus disease Perkinsus atlanticus. Perkiwus sp. Host: Tapes dect.usutus, Venerupis aurea, Tapes philippinam Geography: Portugal, Spain, Mediterranean Sea Impact: milky white cysts on gus, foot and mantle. High mortalities Control: no known methods of control or prevention. Table 2 (continued) Parasitism by gregarines Nematopsis veneris, N. ostreanun. N. schneideri and other species of the family Porosporidae Host: Tapes philippinarum, Cardium edule. C.lamarki, Smcavn rugosa Tellina spp, and Protothaca staminea Geography: ubiquitous Impact: most frequently observed within the gills, associated with a focal, benign hemocyte infliltration, without significant health treats Control: no known control or prevention (due to part of the He cycle occuring in the lumen of marine arthropods). Haplosporidian infection of clams Haplosporidiwn tapetis9H.sp. Host: T.philippinarum, T.decursatus Geography: France, Portugal, Spain, and Oregon Impact: low prevalence of infection ( ~ 4 %with ) minimal pathogenicity. No mortalities associcated with this disease, however, highly pathogenic to oysters on the east coast of US. Control: no known control or prevention Sphenophyra-like ciliates Sphenophyra dosiniae, S. cardii and other unidentifled species in the order Rhynchodida Host: T.philippinanmi, Myu a r e ~ r i aM. , tmncutu and a wide range of other bivalves Geography: ubiquitous Impact: large nurnbers appear without any adverse effect on the Host. No mortalities associated thus far with this type of infection. Control: control or prevention impractical Gill trichodinids Trichondina spp. Host: T.philippinarum, Mya arenaria, Macoma balticu Geography: thought to be ubiquitous Impact: most infections are imocuous, however, heavy infections in individuals less than a year old can result in eoiaciation and mortalities Control: no known control or prevention Turbellaria of clams Rhabdocoela of the family Graffillidae Host: numerous species of clams Geography: global Impact: no known effect on Host. Thought to be midway between endocornmensai and parasitic Control: impractical Table 2 (continued) Trematode rnetacercarial infection of clams various species of the Digenea families Host: T.philippinanun, T.dectïssutw, T.aureus, Mya arenuria, Mercenaria mercenaria and various other bivalves Geography: giobal impact: usually innocuous, however, some species have been reported to cause a change in clam behaviour, dong with severe tissue damage and eventuai mortality. No pathology has been reported with the various species found in Canada Control: impracticai Mytilicola disease, Red worm disease Mytilicola intestrnalis (Copepoda) Host: T.decussutus, Mucoma baltica and a wide range of other marine bivalves Geography: Europe Impact: no known paihology on the Host ControI: nt, known rnethods of conml or prevention Mytilicola parasitism, Red worm Mytiliccila orientalis (Gopepoda) Host: T.p h i l i p p i n a m Pr~tothacasraminea, Saxidomus gigcrnteus and a wide range of other marine bivalves. Geography: West coast of North Arnerica and France Impact: no hown paihology on Host Control: no known methods of control or prevention Oyster crab, Pea crab Pinnotheres pisum, P. maculanis, P. pholadis, Pinnixa faba, Fabia subquadraru (Decapoda: Pinnotheridae) Host: T. philippinarum, Protothaca sîuminea, Panope generosa, Macoma nasata, Mya arenaria and Spisulu solidissima Geography: eastern and western USA, British Columbia Impact: mantie may contain several crabs, thereby reducing market valve. No direct evidence of pathoiogy observed. ControI: precautions to prevent their introduction Appendix B. Biophysicai Criteria for Manila Chm Culture The following biophysical i l t e n a are required for Manila clam growth and survivai: temperature: range for growth = 13 - 21 OC, with 160C k i n g the optimum; these temperatures are found 4 - 6 months of the year dong the southern BC Coast. salinity - range for growth = 24 - 31 ppt; optimum = 28 ppt - good quality food the exact quality and quantity is unknown, however, proximity to good oyster production areas will likely facilitate good clam growth substrate - a combination of mud, gravel, sand, and shell resulting in a fairly firm substrate tide height - mid to upper intertidal zone (1 - 2.5 m above zero tide mark) - minimum air temperature areas in whkh low air temperature result in the fieeWng of substrates should be avoided Wide spread moaalities have been observed following 2 -3 weeks of air temperatures of -10 to -170C. predators - areas with large populations of diving ducks, starry flounder (Platichthys stellatus), crabs (Cancer productus), moonsnaiis (Polinices lewisi) and seastars should be avoided. water quality - areas wiîh toxic algai blmms, sewage and toxic pollution should be avoided. source: Chew, 1989; Anon., 1990b Appendlx C Table C-1, Disaster Scenarlo and the Resultlng Effect on Operational Cash Flows Beginning Cash Balanes Cash Ricdpb $ 180,000 182,195 217,766 293,058 381,180 31,351 81,624 137,212 195,037 237,133 From Operations Ornier's lnvestment Bank Loan Toîal Cash lnllow Caah Outflaw Capifai costs Varlable cosls Flxed cosis TOTAL OISBURSEMCNTS OperaUng Loan payment pfinclpal interest - Pm-îax Bank Balance lncome Taxer, (5W) EndlngCanh Balance $ 180,000 182.195 217.766 293,058 381,180 31,351 81,624 137,212 195,037 237,133 288,841 Summary of debt outstandlng Long-terni debt Balance $ 551,122 496,010 440,898 385,785 330,673 275,561 256,564 199,217 139,869 1 15,667 52,415 O 14,805 O O D O O 30,820 O 12,176 6,132 O 7,136 O O O 21,917 O 7,777 Operaling debt Balance Interest O Appendix C Table C-2. Disaster Scenario lncome Statement Year 1 Year 2 Year 3 Year 4 500,000 500,000 500,000 500,000 Revenues Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 O 500,000 500,000 500,000 500,000 500,000 Cost of Goods Sold: Electricity Lab Supplies Technicians Pump maintenance PacWng Selllng 65,000 6,500 85,800 5,200 6,500 13,000 60,000 6,000 79,200 4,800 6,000 12,000 55,000 5,500 72,600 4,400 5,500 11,000 52,000 5,200 68,640 4,160 5,200 lO,4OO 54,080 5,408 71,386 4,326 O O 56,243 5,624 74,241 4,499 5,304 10,608 77,211 4,679 5,410 10,820 60,833 6,083 80,299 4,867 5,518 11,037 Total COGS 182,000 168,000 154,000 145,600 135,200 156,520 162,463 168,636 l75,O!il 181,715 Gross Margln 318,000 332,000 346,000 354,400 (135,200) 343,480 337,537 331,364 324,949 318,285 5,800 3,900 85,975 68,238 57,200 1,300 1,872 5,200 3,120 7,800 7,800 12,120 4,800 3,600 79,362 62,989 52,800 1,200 1,728 4,800 2,880 7,200 7,200 11,188 4,800 3,300 72,748 57,740 48,400 1,100 1,584 4,400 2,640 6,600 6,600 O 4,800 3,120 68,780 54,591 45,760 1,040 1,498 4,160 2,496 6,240 6,240 O 4,800 3,245 71,531 56,774 47,590 1,082 1,558 4,326 2,596 6,490 6,490 O 4,800 3,375 74,392 59,045 49,494 1,125 1,620 4,499 2,700 6,749 6,749 O 4,000 3,510 77,368 61,407 5 1,474 1,170 1,685 4,679 2,808 7,019 7,019 O 4,800 3,650 80,463 63,863 53,533 1,217 1,752 4,867 2,920 7,300 7,300 O 4,800 3,796 83,681 66,418 55,674 1,265 1,822 5,061 3,037 7,592 7,592 O 4,800 3,948 87,029 69,075 57,901 1,316 1,895 5,264 3,158 7,896 7,896 O 260,326 239,747 209,912 198,724 206,481 214,548 222,938 231,664 240,739 250,176 N d Profit before taxes 57,674 92,253 136,088 155,676 (341,681) 128,932 114,599 99,700 84,211 68,109 Tawes (at 50%) 28,837 46,127 68,044 77,838 64,466 57,300 49,850 42,105 34,054 N d Profit after taxes 28,837 46,327 68,044 77,838 64,466 57,300 49,850 42,105 34,054 58,493 5,849 63,266 6,327 83,511 5,061 5,628 11,257 65,797 6,580 86,851 5,264 5,741 11,482 Exponnem: Vehicle Lease Insurance lnterest Depreciation Wages Site maintenance Property taxes Vehicle HeatlFuel oil Mlscellaneous Suppiies/expendables Contingency Fund Total Expense Accumulated Protitsl(Loss) (341,681) TEST TARGET (QG~) APPLIEO 1 IMAGE. lnc a -. ---, 1993. 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