Center for Tropical and Subtropical
Aquaculture
Regional Notes
Vol.
12 No. 4 Fall 2001 ISSN:
1053-590X
The Oceanic Institute and the University of Hawaii
41-202 Kalanianaole Highway, Waimanalo, HI 96795
Ms.
Alcian Clegg wrote the HTML code to prepare this document for the World Wide
Web
April 3, 2002. Hard copies are available for distribution while supplies last.
Aquaculture of marine ornamentals moves
forward
The demand
for marine ornamentals has been steadily rising from the increased interest of
aquarium enthusiasts. With an estimated
5% of the supply being aquacultured, Hawaiian reefs currently supply a hefty
portion of the world’s marine ornamental fish.
The second year of the CTSA project, Aquaculture of Marine
Ornamentals, combines the skilled research background of scientists from
The Oceanic Institute (OI) and the Waikiki Aquarium to lessen the world’s
reliance on wild-caught ornamentals and assist in the diversification of the
state’s economy by researching the culture of marine ornamental species with
difficult-to-rear larvae. More
specifically, the project will address the the two key bottlenecks in the
culture of marine ornamentals – reproduction and first-feeding. The Aquarium’s component will focus
expressly on the larvae’s consumption of zooplankton.
As
reported in a previous Regional Notes (Vol. 12 No. 2), the project
working group at OI, with additional funding support from the National Marine
Fisheries Service, had established broodstock populations for both the yellow
tang (Zebrasoma flavescens) and the flame angelfish (Centropyge
loriculus) and obtained successful captive spawning for the flame
angelfish. Although the OI group was
able to achieve spawns for the yellow tang, the eggs were initially all
infertile. However, OI has recently
accomplished isolated spawns with fertility rates up to 88% and fecundity has
increased 100 fold. They are also now
able to identify and separate the sexes based on external characteristics. The yellow tang was found to be sexually
dimorphic with males identified by the presence of a bristle patch along the
caudal peduncle. Additionally, the OI
group has demonstrated the existence of a lunar rhythm in the spawning activity. Initial diet trials were conducted with the
larvae that resulted from some of the spawns in an attempt to compare various
live food organisms as first feeds for yellow tang. Further work on this element is planned, as survival past Day 5
was so low that the experiment could not continue.
Future activities planned for the OI component of this
project will examine the usefulness of hormones to induce spawning in yellow
tang. Researchers originally thought
hormones would be needed to induce spawning but having achieved success without
them, they still feel hormone induction will enable them to stimulate
reproductive maturation and increase spawn fertility. OI also anticipates developing an egg disinfection protocol for
small marine ornamental eggs. The
Aquarium has completed certification required by the University of Hawaii’s
Institutional Animal Care and Use Committee and will begin work shortly.
CTSA Call for Concepts
Once again, CTSA is
initiating the start of its proposal process.
As we did last year, we are asking first for submissions of
concepts. The purpose of the concept
submission is to give you, those involved in tropical and subtropical
aquaculture, a chance to voice the problems that you are having and would like
CTSA to address. Your concerns will
then be forwarded to the Industry Advisory Council. If you are having problems, this could be the way to get them
solved. Send your submission to CTSA by
January 31, 2001 by email at kawaya@oceanicinstitute.org or fax (808) 259-8395
or mail to CTSA, The Oceanic Institute, 41-202 Kalanianaole Hwy., Waimanalo,
HI 96795.
Letter from the director - Cheng-Sheng Lee
Twice a year I
attend a meeting of the National Coordinating Council (NCC), comprised of the
five Regional Aquaculture Center (RAC) Directors and National Aquaculture
program leaders. An industry
representative from each region joined the NCC in our most recent meeting in
November. We were pleased to see that
by using a multi-institutional approach, the RACs have all made significant
contributions to the development of aquaculture in each region since funding
started 15 years ago. The problem has
become that although we continue to strive to affect the industry positively,
it is becoming increasingly difficult to address all the issues from the
industry because funding for each RAC has remained level for the past 15
years. With inflation, the funding we
receive today essentially amounts to approximately 60% of the funding power the
RACs had enjoyed in the early years. As
we have in the past, we continually work toward establishing collaborative
relationships with other funding agencies to ensure that we remain 100%
effective for the industry. We must
keep on working together to address the needs of the industry and to continue
promoting the growth of a sustainable aquaculture industry in our region. So, please make sure to tell us what you in
the industry, need to strengthen your operations to become the thriving
industry we know we are capable of creating.
AQUA
CLIPS
Study to look
into fish farm possibilities
By Scott Radaway,
Pacific Daily News - Tuesday, August 14, 2001
The Guam
Economic Development Authority has received three proposals from businesses
wanting to conduct a salmon and rainbow trout farming feasibility study, said
Leigh Lujan, GEDA’s industry development manager. The agency will choose one firm and begin negotiations within a
month, she added. At the same time, a
group of Norwegian investors continues to study the island as a possible site
for a salmon farm, Lujan said. The
proposed Norwegian fish farm could employ as many as 150 people, GEDA officials
have said. As well, the export of
salmon from Guam might create additional shipping lines for Guam’s fishing
companies, Lujan said.
Canadian firm
may grow halibut for Japan market
By Prabha
Natarajan, Pacific Business News - September 7, 2001
A Canadian company wants to grown Atlantic
halibut for Japan’s sushi market on the Big Island. Unlimited Halibut Corp. of Vancouver, B.C., is working with the
Natural Energy Laboratory of Hawaii, and has secured preliminary approval from
the state Department of Agriculture to grow halibut as an experiment. Halibut thrives in the cold waters of the
north Atlantic and Pacific oceans.
Scotian halibut [partner company] has rights to technology developed in
Iceland to commercially grow halibut larva into juveniles. The Hawaii operation initially will grow
juveniles brought in from the East Coast.
[The company] plans to harvest them at 10 pounds. It takes two years to grow juveniles.
Uh-Hilo
aquaculture center to open next year
By Hugh Clark, The
Honolulu Advertiser - Sunday, September 9, 2001
The
centerpiece of the $7 million Pacific Aquaculture and Coast Resources Center
will be two 80-foot diameter sludge digester tanks that will be converted into
400,000-gallon fish tanks. The [12.5
acrecomplex] will be in operation next year, serving the university’s
agriculture and marine sciences department and UH-Manoa’s Sea Grant
Program. The purpose of the center is
to demonstrate and test possible marine crops, including shrimp, tilapia,
exotic fish and various algae.
Big island
aquaculture firm receives $1.5 million grant
By Terrence Sing,
Pacific Busisness News - October 19, 2001
Big
Island-based Kona Blue Water Farms has received a $1.5 million federal grant to
develop a live-feed system for marine fish larvae. A subsidiary of Black Pearls Inc., the company plans to use the
money to grow the zooplankton needed to feed deep-water, bottom-dwelling
species with higher market value, such as onaga, ehu, opakapaka and hapuupuu.
Oceanic raises
funding to develop disease-free shrimp
By Prabha
Natarajan, Pacific Business News - November 16, 2001
A
joint venture led by Oceanic Institute received an $8.2 million federal grant
to develop a commercial disease-free shrimp production system. The U.S. Department of Commerce National
Institute of Standards and Advanced Technology Program will fund nearly 50
percent of a $16.6 million, five-year shrimp reserach project. Other companies in the venture are Kahuku
Shrimp Co., PIC USA Inc. in Berkeley, [CA] and Zeigler Bros. of Gardners, [PA],
which will fund the rest of the project in exchange for intellectual property
and commercialization rights. Last year
the company developed Bisecure Zero-Exchange Shrimp Technology (BioZest) that
will serve as the prototype for the project.
BoZest offers a “green water system” for growing shrimp, [Tom] Farewell
[president and CEO of OI] says. The
system operates in a closed microbial environment with disease-free shrimp,
water and feed. The system, [OI’s]
research indicates, results in faster shrimp production with lower costs. [OI] projects a 65 percent profitability
rate with three crops a year and a yield of one pound per square foot of shrimp
pond.
\
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Back to Publications List
New publication available
Best Management Practices for Hawaiian
Aquaculture, CTSA
Publication #148 by Dr. Robert Howerton, Sea Grant Extension Agent, is now
available. The publication is a result of the CTSA project with the same
title. It is a useful resource for
those just getting started in aquaculture, as well as those more seasoned
farmers wanting an excellent manual for reference.
Best Management
Practices
is available for download at http://library.kcc.hawaii.edu/CTSA/publications/index.html. Limited hard copies are also available by
contacting Alcian Clegg by email at mailto:aclegg@oceanicinstitute.org
or by phone at (808) 259-8168.
< <
#
Season’s Greetings
from CTSA.
Wishing you a safe and happy holiday season.
# # # # #
HAA Membership Meeting
Calling
all current and prospective HAA members!!
This meeting is for anyone who wants to help the
aquaculture industry in Hawaii grow.
The
annual Hawaii Aquaculture Association meeting will be held January 19, 2001 at the Bishop Museum. For more information contact Dean Toda at
(808) 587-0030 or mailto:aquacult@aloha.com.
The aquaculture industry must have a political presence and a
voice in the debates over improvement of the economy. A strong industry association can serve that purpose to the
benefit of everyone in the aquaculture community.
INTERNSHIPS AVAILABLE
The Micronesia and
American Samoa Student Internship Program and the University of Hawaii Hawaiian
Internship Program are accepting applications for their Summer 2002 internship
programs. Application deadline is February 1, 2002. More information and forms are available for download from http://www.soest.hawaii.edu/SEAGRANT/internship. Interested host agencies can contact Sharon
Ziegler-Chong at (808) 933-0706 or by email at mailto:ziegler@hawaii.edu.
Aquatic Microbiologist/Microbial
Ecologist Needed
Description: Aquatic
Microbiologist / Microbial Ecologist at the Research Scientist level to conduct
research on the contribution and aquatic microorganisms in intensive
aquaculture systems.
Responsibilities:
Successful candidate will undertake research
on the role played by aquatic autotrophic and heterotrophic microorganisms as a
potential source of nutrients in shrimp production systems and larval fish
culture systems, and develop techniques for monitoring and exploiting microbial
contributions from feed and feed ingredients in those systems. Preparation of
project proposals and reports, and generation of publications for peer-reviewed
scientific journals, is required.
Position may also require outdoor work, exposure to sunlight, working
with chemicals, temporary extended off-site work, and flexible work hours.
Qualifications: Ph.D. in
microbiology/microbial ecology with proven research experience and publication
record in aquatic and/or feed microbiology. Strong background in data handling
and analysis and writing skills. Position is available immediately.
Application Instructions: Send application letter with CV, research
experience, record of publications, and names of three professional references
by mail or e-mail to: The Oceanic
Institute, Attn: Personnel, 41-202
Kalanianaole Hwy., Waimanalo, HI
96795 USA E-mail:
mailto:mkapuakela@oceanicinstitute.org.
AQUA
TIPS
Establishment and
growth of cell lines from aquacultured fish in Hawaii for diagnosis and
isolation of pathogenic viruses
Yuanan Lu, Pacific Biomedical Research Center, University of Hawaii at Manoa
Lijun He, Pacific Biomedical Research Center, University of Hawaii at Manoa
Dee Montgomery-Brock, Hawaii State Aquaculture Development Program
Jim Brock, Hawaii State Aquaculture Development Program
Robert Bullis, The Oceanic Institute
This article was
written as part of the work for the project titled “Disease Management for
Hawaiian Aquaculture, Year 7,” which was funded in part by the Center for
Tropical and Subtropical Aquaculture under a grant from the U. S. Department of
Agriculture Cooperative State Research, Education, and Extension Service.
Introduction
The
aquaculture of freshwater ornamental fish, food fish, marine fish and shrimp
has received increased attention for commercial development in recent years in
Hawaii. Disease losses have
traditionally been high in some groups of fish, particularly those that are
emerging species of importance. One
potential problem threatening the continued expansion of aquaculture in Hawaii
is infectious diseases, specifically those caused by pathogenic viruses. Increasingly, new diseases of probable viral
origin have been growing in groups of marine fish and ornamental freshwater fish
imported into Hawaii causing severe losses.
These new viral diseases threaten existing fish-farming industries in
the state. Recent examples include high
mortalities of cultured guppies due to a putative viral infection of the liver
and a pernicious form of gill disease that affected imported batches of
juvenile koi.
Viruses
are known to be important pathogens to many species of aquacultured fish and
often cause mass mortality of affected species. Unlike other microorganisms, which can be readily grown in
artificial nutrient medium, viruses are obligatory intracellular pathogens and
their isolation and propagation are totally dependent on the availability of a
live host, such as permissive cell cultures.
In addition, most viruses are host-specific and tissue-specific, and
they can only be isolated and propagated using cell cultures established from
tissues of the same host species.
In addition, trends
in case submissions indicate a pressing need for fish diagnostic virology for
aquaculture producers in the State of Hawaii.
A susceptible cell culture system is the most important laboratory tool
to grow, isolate and characterize, and identify new viruses for the detection
of pathogenic fish viruses. However,
cell lines currently do not exist for most of the marine and freshwater
ornamental fish undergoing aquaculture development in Hawaii. The lack of appropriate cell culture systems
hinders the development of preventive strategies for viral diseases and the
inspection of batches of juvenile fish for health classification. Thus, appropriate cell lines necessary for
the cultivation and isolation of pathogenic viruses from aquaculturally
important fish species in Hawaii need to be developed. These cell cultures will become an essential
first line of defense for the detection and surveillance of pathogenic fish
viruses and will be important to the fish health assurance program of the
aquaculture industry in Hawaii.
In
this report, we describe our initial attempts at establishing in vitro
cell cultures from different species of fish that are economically important to
Hawaiian aquaculture for the diagnosis and study of pathogenic fish viruses.
Materials
and Methods
Fish Sources and Treatment
Four
species of fish were used in this study, including goldfish (Carassius
auratus), grey mullet (Mugil cephalus), green swordtail (Xiphophorus
helleri) and angelfish (Pterophyllum scalare). Young-aged fishes that appeared healthy were
collected. Prior to the experiment,
donor fish were disinfected with diluted bleach, and then rinsed with 70%
alcohol.
Growth
Media
Several
amino acid-enriched commercially available media for animal cell cultures,
including minimum essential medium (MEM), Medium 199, Leibozitz-15 (L-15) and
RPMI-1640, were used to support initial growth of fish cells. Media were supplemented with 20% fetal
bovine serum (FBS) and various antibiotics, such as penicillin (200 U/ml),
streptomycin (200 µg/ml), gentamicin (50 µg/ml) and amphotericin B (5.0 µg/ml).
Organ and
Tissue Selection
Two
external tissues and selected internal organs were obtained from donor fish
using aseptic techniques. Fins, snout,
head soft muscle, kidney and spleen were excised in succession from donor fish and immersed immediately in antibiotic incubation medium
(AIM), containing 5x concentrated antibiotics compared to the growth media,
prior to cultivation (Lu et al. 1990).
Primary
Cell Culture
Following
incubation in AIM for 2 hours, tissue/organ specimens were minced into 1-2 mm
pieces using sharp sterile scalpels. Primary cell cultures were initiated using
the explant method (Wolf 1976, Lu et al. 2000) in that approximately 20
fragments of each tissue were seeded uniformly into Primaria-brand 25-cm2 tissue culture flasks.
Following 2-hour attachment, tissue pieces were fed with 5 ml of growth
medium supplemented with serum and antibiotics. The cultures were incubated at appropriate temperature (20-28°C)
and cell growth was monitored daily for the appearance of newly formed cell
colonies and increased size using phase-contrast microscopy.
Subculture
and Passage
After
the formation of confluent cell monolayer, tissue fragments were dislodged from
the flasks. The monolayered cells were
harvested using 0.25% trypsin solution, and resuspended in fresh medium plus
filter-sterilized conditioned medium.
The cell suspension was distributed into two flasks. Subsequent subcultures were performed every
7-10 days at a cell-split ratio of 1:2 to 1:3.
Culture medium was changed weekly using 40% conditioned medium and 60%
fresh medium. Beginning at passage 5,
conditioned medium was not included in further subculturing and the
concentrations of serum and antibiotics were halved after 10 passages (Lu et
al. 1990).
|
Cell Line* |
Morphology |
# of Passages |
|
GFCF |
fibroplastic |
10 |
|
GFSN |
epithelial |
8 |
|
AFCF |
fibroplastic |
13 |
|
AFSN |
epithelial |
15 |
|
AFM |
fibroplastic/ epithelial |
9 |
|
GSSN |
epithelial |
3 |
|
GSCF |
epithelial |
8 |
|
MTSN |
epithelial |
1 |
|
MTCF |
fibroplastic |
1 |
|
MTKD |
epithelial |
1 |
|
MTSP |
fibroplastic |
1Ą |
|
* GF = Goldfish CF = caudal fin SP = spleen AF = angel fish SN = snout GS = green swordtail M = muscle MT = mullet KD = kidney |
||
Table 1.
Cryopreservation
Fish
cells at the logrithmic growth phase were harvested using 0.25% trypsin
solution. Following low-speed
centrifugation, cell pellets were resuspended in cell-freezing medium
containing 20% FBS and 10% DMSO and dispensed into 1-ml plastic vials. Vials were stored at –70°C for 24 hours in a
cryogenic controlled-rate freezing container and then transferred in liquid
nitrogen for long-term storage.
Results
and Discussions
Since the
initial attempts at establishing cell lines from aquacultured fish in Hawaii,
we have developed an in vitro cell culture protocol for successful
establishment and cultivation of cells from different species of fish
commercially important in Hawaii.
We
have established primary cell cultures from all four fish species in our
initial trial. As shown in Table 1,
primary cell cultures derived from goldfish, angelfish and green swordtail
exhibited active growth kinetics and these cells have been subcultured up to 13
times since their initiation in August 1999.
By contrast, cells derived from grey mullet grew very slowly and were
not successfully subcultured.
A
comparison of the initial growth of different tissues from the four fish
species was conducted. Our preliminary
data showed that fin and snout tissues were readily cultivated while kidney,
spleen and heart were difficult to grow.
It is an advantage to establish cell cultures from external tissues
since fins and snout tissues are more accessible for sampling. However, it should be noted that external tissues had a higher risk of bacterial and fungi
contamination and thus it is necessary to decontaminate the external surface of
donor fish before tissue sampling (Wolf 1979).
We have found that diluted bleach together with 70% alcohol were
effective in reducing microbial contamination while not affecting the viability
of the cells.
Morphological
examination of newly established fish cell cultures indicated that except for
cell cultures derived from angelfish head soft muscle showing a mixed
morphology, which contained both epithelial- and fibroblastic-like cells
(Figure 1), other cell cultures appeared either epithelial-like or
fibroblastic-like (Table 1, Figure 1).
Several
media were employed in the initiation of primary cultivation of these fish
cells. Although all of these different
media supported cell growth, Medium 199 and L-15 medium appeared superior to
the other two for initiating primary growth of fish cells (data not shown).
These
cell lines are currently being characterized in terms of their optimal growth
conditions (growth temperature, serum requirement and CO2 content), chromosomal number, plating efficiency and
susceptibility to viruses isolated from fish and other aquatic animals
according to previously described methods (Early 1975, Freshney 1994, Lu et al.
2000). The cells will be used for the
isolation and propagation of viruses that affect these fish species.
In
addition, we are currently establishing cell cultures from other species of
fish cultured in Hawaii, including clownfish (Amphiprion ocellaris), sea
horse (Hippocampus erectus), awa (Chanos chanos), snakehead (Channa
striatus) and moi (Polydactylus sexfilis). Once these cell cultures and cell lines are established, they
will be essential to the success of the Hawaiian aquaculture industry. Cell cultures can vary greatly in their
sensitivities to different viruses. If
a virus is inoculated into an insensitive cell culture, the virus will not be
able to replicate and a negative result will be obtained. When small amounts of virus are present in a
specimen such as an early viral infection, a positive result may be obtained
only when the most sensitive cell culture system is used. Therefore, successful establishment of cell
lines from various fish economically important to Hawaii aquaculture will
improve diagnosis of viral disease and prevention and also facilitate an
improved quality control program for live fish shipment.
References
Earley,
E.M. 1975. Chromosome preparations from monolayer cell cultures. TCA Manual 1:31-35.
Freshney,
R.I. 1994. Culture of Animal Cells, A Manual of Basic Technique. New York.
486 pp.
Lu,
Y., C.N. Lannan, J.S. Rohovec and J.L. Fryer.
1990. Fish cell lines
establishment and characterization of three new cell lines from grass carp (Ctenopharyngodon
idella). In Vitro Cell Dev. Biol.
26:275-279.
Lu,
Y., A.A. Aguirre, C. Hamm, Y. Wang, Q. Yu, P.C. Loh and R. Yanagihara. 2000.
Establishment, cryopreservation, and growth of 11 cell lines prepared
from a juvenile Hawaiian monk seal, Monachus schauinslandi. Methods In Cell Science 22:115-124.
Wolf,
K. and M. C. Quimby. 1976. Primary monolayer culture of fish cells
initiated from minced tissues. TCA
Manual. 2(4):445-448.
Wolf,
K. 1979. Cold-blooded vertebrate cell and tissue culture. Methods in Enzymology. LVIII:466-477.
“Growing the business” in Micronesia
By C. L. Cheshire
This is
an excerpt taken with permission from a report written by Dr. C.L. Cheshire
entitled “Business, Family and Business Development in Micronesia” based on Dr.
Cheshire’s personal interactions with business owners and leaders in
Micronesia. Dr. Cheshire is the Senior
Business Development Manager for the Pacific Business Center Program at the
University of Hawaii at Manoa.
There are
several obvious advantages to starting small in Micronesia, but starting small
does not mean that a business owner in Micronesia can only look forward to
having a small operation. Several of the business owners that I spoke to
started small, but their businesses are now quite large, demonstrating that it
is possible to grow a large business on a small island. But, growing a large
business on a small remote island in Micronesia is not easy. In many ways it is
analogous to trying to make water run uphill due to the many barriers that
limit business growth in the Western Pacific.
A
business owner in Micronesia who focuses on the local market is limited because
the local market is very small.
Regardless of what the product or service is, the market is soon
saturated. The only exception to this that I am aware of is betelnut, and here
the limiting factor is not demand, but supply.
If
the business is a small export business, it is difficult, if not impossible, to
expand it gradually because the existing transportation system cannot
accommodate gradual growth. Continental
Airlines, the only air carrier in the FSM, has limited cargo space which is not
always available even for small volume shippers. PM&O, the only surface carrier for parts of the FSM requires
that the shipper ship in container loads. A twenty -foot container holds twenty
thousand to thirty thousand pounds which has to be full or almost full before
the per pound shipping costs are economical.
Going
from a couple of thousand pounds per shipment to twenty to thirty thousand
pounds is a big leap and it cannot be accomplished without radically changing
the structure and the nature of the business. In other words, the difference
between a small exporter and a large exporter in Micronesia is more than size.
They are two different businesses requiring different personnel, different
facilities, different infrastructure and different markets and buyers.
The
FSM governments, both the National and the State governments, have tried to
address the problem of size by financing the start-up and operation of several
large fishery (fresh tuna) and agricultural (coconut soap) ventures. None of these operations, however, has ever been
turned into a self-supporting, profitable business. They exist more as
government departments, run by government appointed managers and dependent on
the government for some form of subsidy, than they do as independent
businesses.
The
business owners that I spoke to told me that the solution to the problem of
small island markets is not large scale export businesses but diversification
into an array of related goods and services.
Some of the following examples have already been mentioned, but it is
useful to list them here to show how diversified some of these businesses are:
· One business owner went from a travel
agency and car rental to a multi-unit apartment building, to a twenty-five room
hotel and restaurant. They have recently added a bar, and a dive shop is
planned for future expansion.
· Another business owner went from selling
cigarettes out of the back of a van to a general retail clothing store, to a
hardware store, to a construction company, to developing land for a multi-unit
housing complex.
· Yet another business went from
stevedoring , to construction, to sand dredging and concrete blocks, to a
hardware store, to propane distribution.
Several
other examples could be added; diversified businesses are so common in
Micronesia their existence hardly needs to be pointed out. What is not fully appreciated is how large
some of these businesses are. Some have
monthly gross sales in the hundreds of thousands of dollars. Of course, these same businesses have
comparably high monthly expenses, but even if their net profit is only five to
ten percent, they are making profits of several thousand dollars every month.
The other measure of a company’s size, number of employees, is also
impressive. Some of these same
diversified companies have between fifty and one hundred people working for
them.
Successful
diversification in Micronesia follows two basic rules or principles.
First, diversification works only if
the initial core business is successful. The business owners I spoke to said
their core business was initially quite successful and provided the capital for
further expansion. Second, diversification is most effective as a growth
strategy when the business diversifies into businesses that complement and
enhance the competitiveness of the core business. For example, a construction business is complemented by the
ownership of a hardware store. For one
business owner in Micronesia there was a similar complementary relationship
between construction, commercial buildings and commercial businesses. The
business owner, who owned a small construction company, used his employees and
equipment (when he did not have a contract to build a building for someone
else) to build a commercial building for himself with spaces for small
storefronts on the ground floor and rooms for rental apartments and hotel rooms
on the second floor. Some of the storefronts he rented to local businesses, but
some of them he kept for himself to use to open his own businesses. The upstairs apartments and rooms he rented
out to construction crews and business travelers.
Diversification
can give the Micronesian business owner a significant advantage over his local
competitors since it is relatively inexpensive for him to use the personnel,
equipment and facilities of the core business to start and operate an array of
other businesses. This advantage is
easy to see when one compares a general retail business (which is, in effect, a
specialized — one product — retail
business that has diversified into several products) with a specialized retail
business. If a new specialized retail
business opens and introduces a new product, it does so at a significant cost
and risk. If the new business is successful, all the general retail business
owner must do is clear some room on his shelves to add the same product. In most cases, the general retail business
is not required to find a building to operate out of, nor does it need to add
employees or equipment to sell the new product. As a result, his overhead costs
(the costs involved in selling a product other than the cost of the product
itself) for selling the new product are almost nothing compared to the overhead
costs of a specialized retail business.
If
the situation is reversed and the diversified general retail business wants to
introduce a new product, the same advantage applies. Unlike his one product
competition, a diversified business owner can afford to experiment with the
introduction of new services and products with little risk or fear of
competition because his costs to introduce a new product or service are so low
compared to the costs of his non-diversified competitors. In many instances,
the diversified business does not need to borrow money or take on investors
either of which can be a major additional cost to the business. Because its costs relative to its competitors
are so low, a diversified, general retail business can afford to sell a new
product at the lowest possible price and still make a profit. Consequently, it
is very hard for anyone to compete with them.
Proposal process update
On October
9-10, 2001, CTSA’s Technical Committee met for its annual meeting at the
East-West Center in Honolulu, Hawaii.
Representatives from research, education, and extension institutions
traveled to discuss the 13 proposals submitted to CTSA for Year 15 funding
consideration. Project work groups were
then given specific issues to address in their revised proposals due back in
mid-November. CTSA is currently
reviewing the revised proposals and will be taking them to the Project Review
Delegation meeting on December 11, 2001 at The Oceanic Institute. From there the proposals will be compiled
and submitted to the Board of Directors as the Plan of Work with
recommendations for each individual proposal.
Upon their endorsement, CTSA will forward the Fifteenth Annual Plan of
Work to the U.S. Department of Agriculture for approval.
