Rich Like Frank Heurich

Inventor of the Gregor Jonsson Shrimp Peeling Machine

In Rich Like Them, one of the first books published in 2009, author Ryan D’Agostino interviews rich people all over the United States to determine how they made their money.  Using a rather unorthodox approach to get the interviews, he knocked on five hundred doors in nearly two dozen of the most affluent towns in America and interviewed fifty regular (though very rich) men and women who built their wealth in fifty different ways and asked the question: How did you get rich?

One of the people he interviewed was Frank Heurich, the inventor of the Gregor Jonsson shrimp peeling machine.  How did Frank make his money?  When D’Agostino asked him that question, he answered: “I started a company called Gregor Jonsson Shrimp Peeling Systems with a guy who had a retail fish business in Highland Park, Illinois.  We make and lease machines that peel and devein shrimp.”

After which, D’Agostino wrote, “I stared at him, unmoving, for probably too long a moment.  I glanced outside at the huge lawn and the shimmering lake beyond.  I looked back at Frank Heurich and asked.”

“Shrimp peeling machines?”

“Yeah”, he said.

After another moment, D’Agostino said, “Wow”.

Gregor Jonsson, a family friend, was much older than Heurich.  At his fish store, Jonsson and his small staff peeled shrimp by hand, which at the time was the only option.  One day an employee stood hunched over the shrimp table, peeling away, and muttered, “They should make a machine to do this.”

It was one of those light-bulb moments.  Jonsson grabbed a shrimp by its pleopods, held it in place with a paper clip, cut it down the back with scissors, and got the veins out with an ice pick.  Then, for the next fourteen years, he worked on making a machine that could do the same thing.

Meanwhile, Heurich had been off getting an undergraduate business degree with a concentration in marketing from the University of Illinois and an MBA from the University of Chicago.  By the time Heurich finished school, Jonsson had almost perfected his shrimp-peeling machine, and he needed a business-minded partner, someone better at accounting, hiring and turning a profit.  He called Heurich.

The pair came up with an unusual business model: they wouldn’t sell the machines; they would lease them.  The company assumes 100 percent of the risk, but the machines generate income for as long as they are operational.  “Gregor just thought we could make more money that way,” Heurich said.  “So we do a month-to-month lease.”  For more than fifty years now, his company has been collecting money off month-to-month leases.  Other companies have tried to replicate Gregor Jonsson’s product, but none have matched it.  One key advantage, which no one has been able to mimic, is that Heurich’s machines do not require the shrimp to be of uniform size.  “There’s another company that does what we do, but they squeeze the shrimp and pinch the meat out,” Heurich said.  “We do it totally differently.  With us, size differences from shrimp to shrimp are not an issue.  We can do shrimp of all different sizes.  We can peel it completely or leave the tail on.  We can butterfly it, whatever.  We have patents, but our protection is mostly that it’s very expensive machinery to produce.  It would be difficult for someone to do what we do.”

“That business model makes sense for us because we have a very small, niche market, and by leasing and replacing the machines on a schedule, we can offer the best products and service,” he said.  “When we started out, the machines were not always perfect, and by leasing them, we could afford to keep updating and improving them and replacing them with new ones.  The way our leasing program works, there’s no long-term obligation for the customer.  We take all the risk.  This has several advantages: The first is that we don’t need as big a sales effort, which is expensive to have.  And we don’t have any of the legal expenses that you need to collect on defaults and things like that.  We’re a very small company, so we need to operate efficiently.  By assuming all the risk, we’re announcing that we have confidence in our product and that we can keep the customer happy.”

“We haven’t expanded very far because we felt there would always be opportunity in our business.  Shrimp is a huge market.  So we stayed in the area of what we thought we knew best.  We do have a new product we’re bringing out soon, which is for working with coldwater shrimp.”  He paused for a moment before shrugging and adding, “But it’s still shrimp.”

The company has a great video on its website that shows how the machines work.

Information: Beth Dancy, Gregor Jonsson, Inc., 13822 Laurel Drive, Lake Forest, Illinois 60045, USA (phone 847-247-4200, fax 847-247-4272, email sales@jonsson.com, website http://www.jonsson.com).

Source: Rich Like Them.  Ryan D’Agostino.  Chapter Two.  Luck Doesn’t Exist.  Once You Find Your Calling, Persevering Is Easy.  Page 89.  First Edition, January 2009, $25.99, Little, Brown and Company, Hachette Book Group, 237 Park Avenue, New York, New York 10017, USA (website http://www.hachettebookgroup.com/books_9780316021463.htm).

Country Reports

Bangladesh

USA Shrimp Importers Refuse Shrimp Unless Price is Lowered

Buyers in the USA and Europe are pressing Bangladeshi exporters to reduce the price of their shrimp in the wake of the deepening financial crisis.  Some buyers have even refused to accept the shrimp without a reduction in price.  Kazi Belayet Hossain, president of the Bangladesh Frozen Foods Exporters Association (BFFEA), says, “I made a shipment to the USA last month, but the buyer asked me to renegotiate the price, without which he refused to receive the goods.  If we don’t reduce the price, buyers threaten to shift their orders to other countries.”

In late 2008, the price of shrimp was $1 per pound lower than in late 2007.  In fiscal year 2007–2008, the price of 16/30 count shrimp, which accounts for around 65 percent of Bangladesh’s shrimp exports, ranged between $5.20 and $5.50 a pound, but now it is as low as $4.00 a pound, a 30-32 percent decline, the BFFEA president said.

The USA, European Union and Japan are the three main markets for Bangladesh’s shrimp, with the EU and the USA accounting for 48 and 40 percent, respectively.

Some 10 million people are directly and indirectly involved in the shrimp farming business, mostly in southwest Bangladesh.

Source: The Daily Star.  Recession fears loom over shrimp exports.  Sajjadur Rahman (sajjad@thedailystar.net).  January 19, 2009.

India

Kerala—Common Pre-Processing Center

To enhance the quality of shrimp exported from India, the Marine Products Export Development Authority (MPEDA) plans to set up a world-class pre-processing center in the Alappuzha District of Kerala (a state on India’s southwest coast) in partnership with the Seafood Exporters Association of India (SEAI).

Currently, the district has 137 small peeling sheds, but unhygienic conditions in them (and the collection centers that supply them) need to be improved because rejections of Indian shrimp on quality issues are on the increase, especially by the European Union.

The new pre-processing center will have rooms for:

• changing clothes

• going to the bathroom

• chilling and storing raw and finished product

• purifying water

• storing chemicals

• testing products

• making ice

• crushing ice

The facility will employ up to 600 women and cost approximately $623,000.  MPEDA will provide $51,000; SEAI, $71,000; and the federal government, $501,000, through a program that invests in state infrastructure development and exports.  Construction on the facility was scheduled to begin on January 18, 2009.

Source: Business Standard. New facility to improve shrimp quality.  George Joseph.  January 16, 2009.

Indonesia

CP Prima and Transshipments

In mid-January 2009, CP Prima, the largest shrimp farm in the world, got the chance to prove to USA Customs that the shrimp it sells in America come from its farms in Indonesia and not from farms in China, as Customs has charged.

Susan Kohn Ross, trade counsel for CP Prima, said, “To its credit, Customs is getting off the dime and sending folks to Indonesia to pull samples from the ponds.  Hopefully, that translates into a validation of country of origin.”  If that happens, Ross said the company’s immediate problem will be resolved; if not, it will continue for some time.  “If that’s the case, it’s definitely going to cut supply because that’s what it’s already done,” said Ross, who works for the law firm Mitchell, Silverberg and Knupp.  “Nobody wants to purchase product if they don’t know what the obligations to Customs is going to be.”

In early January 2009, CP Prima said it would cut exports to the United States by 10 to 15 percent.  Previously, the USA received around 58 percent of the company’s shrimp exports.

Between 30 and 40 containers of CP’s shrimp are being held by Customs at the Port of Los Angeles in California, and, so far, the cost to the company and its customers has been estimated at $1 million, said Ross.

In Indonesia, samples will be taken and sent to a lab for testing.  Ross said, “We’ve been told it could take five days to do the testing, but we don’t know how quickly the samples will get there, or how quickly testing will commence....  Therefore, we don’t now how long the agency may need...to decide its next step.”

CP Prima spokesman, Fajar Reksoprodjo, said, “We are convinced that CP Prima will pass inspection.”  He said CP has documents that prove the company never transshipped shrimp products from China to the USA.

Source: 1. The Wave (an online, subscription-based news service published by IntraFish Media, Norway).  Editorial Director, John Fiorillo (phone 206-282-3474, extension 25, cell 206-963-5732, fax 206-282-3470, email john.fiorillo@intrafish.com).  U.S. Customs to inspect CP Prima shrimp farms.  January 16, 2009.  2. Tempointeractive.  A Shrimp Exporting Company Ready to be Investigated.  Bunga.  January 20, 2009.

Indonesia

CP Prima Shrimp Exports to the EU Suspended, then Reinstated

The Indonesian Government slapped a six-month ban on CP Prima exports to the European Union after antibiotics were found in its shrimp products.  CP Prima, however, said the suspension was lifted after it proved that a mistake had been made, adding that it had been allowed to resume exports on January 12, 2009, after just one week of suspension.

Source: Seafood.com (an online, subscription-based, fisheries news service).  CP Prima gets one week suspension of shrimp exports to EU from Indonesian government.  Editor and Publisher, John Sackton (phone 781-861-1441, email jsackton@seafood.com).  January 20, 2009.

Japan

Hokkaido—King Crab Larvae Produced

More than 100,000 king crab (Paralithodes californiensis) larvae have been hatched at a prefectural fish farming laboratory on the island of Hokkaido.  The goal of the program is to release juvenile crabs into the sea to aid the recovery of king crab stocks.  King crabs take approximately six years to reach breeding size.  The king crab catch in Hokkaido was 235 tons in 2006, about half the level of 1997, and king crab imports from Russia are shrinking due to the stock depletion there.

Studies to date have clarified the temperatures at which the eggs are hatched and the type of the feed that larvae like to consume.  Mature crabs eat squid, sandfish and capelin.

Source: Seafood.com (an online, subscription-based, fisheries news service).  Japanese have high hopes for king crab propagation technology in Hokkaido.  Editor and Publisher, John Sackton (phone 781-861-1441, email jsackton@seafood.com).  January 14, 2009.

Korea

Remarkable Antimicrobial Activities

Abstract: In this study, researchers explored the feasibility of using two strains of bacteria (Lactobacillus) for the removal of pathogenic bacteria and nitrogen from shrimp ponds.  Both strains demonstrated remarkable antimicrobial activities against Vibrio parahemolyticus, V. harveyi and Edwardsiella tarda.  After four minutes of exposure to the two Lactobacillus strains, scanning electron microscopy revealed perforations and irregular rod shapes with wrinkled surfaces on the V. parahemolyticus, V. harveyi and Edwardsiella tarda bacteria.

Source: Aquaculture.  Removal of pathogenic bacteria and nitrogens by Lactobacillus spp. JK-8 and JK-11.  Chae-Woo Ma, Yun-Seok Cho and Kye-Heon Oh (kyeheon@sch.ac.kr, Department of Biotechnology, Soonchunhyang University, P.O. Box 97, Asan, Chung-Nam 336-600, Republic of Korea).  Volume 287, Issues 3-4, Page 266-270, February 18, 2009.

Malaysia

Kedah—Blue Archipelago

A shadow of doubt has been cast on the planned acquisition of a 400-hectare shrimp farm in Kedah by SKS Ventures, Sdn., Bhd., after Blue Archipelago revealed on January 14, 2009, that it holds a 30-year contract to operate and manage the farm and has spent $5.5 million to repair and upgrade it.

Source: TheEdgeDaily.com.  Status of prawn farm sale in the air.  Fong Min Hun (fd@bizedge.com).  January 15, 2009.

Myanmar (Burma)

Junta Destroying Shrimp Farming

According to a shrimp farmer from Rathidaung in the state of Arakan, “The major business in our state is the shrimp industry, and the state’s income from shrimp enterprises is big, but we have not been able to work in the industry freely.  In the last few years, 2,000 acres of shrimp farms in our township were confiscated by the Burmese army.”  He added, “Army Battalions 537 and 538 worked at least two years on the shrimp farms after confiscation, but the army was unable to continue the shrimp husbandry at the farms.  So now the army has abandoned the shrimp farms.”

The shrimp farmer said that many shrimp farms have fallen fallow after being abandoned by the Army.  Even though they are unable to maintain the farms, the Army has not returned the shrimp farms to their original owners.  “The shrimp enterprise in our state is lucrative and many people including workers and shopkeepers were able to earn high incomes from the business in the past, but the Burmese authority has killed the business in Arakan,” said the shrimp farmer.

Source: Narinjara (founded by a group of Arakanese in exile in Bangladesh).  Burmese Junta Destroying Arakanese Businesses, Says Shrimp Farmer.  January 16, 2009.

Northern Mariana Islands

• Saipan SyAqua Sells Shrimp to USA Military on Guam

• Saipan SyAqua Sells Broodstock to Vietnam

Northern Mariana Islands is a commonwealth in political union with the United States.  In December 2008, Anthony Pellegrino, owner of Saipan SyAqua, a shrimp farm on the main island of Saipan, began exporting fresh, chilled shrimp to the USA Air Force and Navy commissaries on Guam.

Rommel G. Catalma, the farm’s manager, said Saipan SyAqua sells the shrimp for $11.95 a pound, almost $3.00 a pound more than it gets on Saipan.  He said shipping costs were the primary reason for the higher prices on Guam, adding that the commissaries were just the beginning.  “If Guam really opens up, we can...branch into...stores and hotels on Guam.”  Furthermore, Guam’s commissary is just one of 14 USA commissaries in the region.  Others exist in Japan and Korea.

Catalma said the one big thing going for Saipan SyAqua is the fact it’s an American company, and products from the Marianas carry the “Made in the USA” label.  “The USA military commissaries prioritize American-made products...and that’s why it’s very interested in our shrimp because they’re made in the USA—that’s our main strength.”

Saipan SyAqua also sells shrimp to markets on Saipan.  The company just closed a contract with Palms Resort Saipan for 1,000 pounds of shrimp a month.  Saipan World Resort is also buying on the average 40 pounds a day, said Pellegrino.

Catalma said with the increased demand for the shrimp, the company has no choice but to increase its production.  “Production now is about 6,000 pounds a month.  We’ve got to expand....”

Broodstock Sales: Saipan SyAqua’s broodstock must pass quarterly disease checks by the University of Arizona.  After exporting shrimp broodstock to Indonesia a year ago, Saipan SyAqua sold 1,100 broodstock (Penaeus vannamei) to Vietnam in December 2008, through its sister company in Thailand.  Pellegrino said the company also has requests from India, Iran and Indonesia for 1,100 broodstock each at the end of January 2009.  Currently, Saipan SyAqua is the only shrimp farm outside of Hawaii that exports Pacific white shrimp broodstock.

Sources: 1. Saipan Tribune.  Local shrimp farm penetrates Guam military commissaries.  Mark Rabago.  January 16, 2009.  2. Saipan Tribune.  Local shrimp farm exports to Vietnam.  Mark Rabago.  January 20, 2009.

Philippines

Freshwater Prawns

In 2009, the Philippine Bureau of Fisheries and Aquatic Resources will embark on a program to encourage freshwater prawn farming in the Davao Region of Mindanao, a huge island at the southern end of the Philippine archipelago.

Source: Philippines News Agency.  BFAR Davao reiterates to intensify freshwater shrimp this year.  January 15, 2009.

Thailand

Thai Union Receives Three Stars from ACC

On January 18, 2009, Thai Union Frozen Products announced that it was Thailand’s first shrimp producer to earn three stars from the Aquaculture Certification Council.  Each star indicates that it has received ACC certification for a particular phase of its business.  Thai Union received one star for its hatcheries, one for its farms and one for its processing plant.

In the first nine months of 2008, Thai Union’s shrimp group reported a 29 percent sales increase compared to 2007.  Shrimp represents 19 percent of the group’s total sales.

Source: SeafoodSource.com.  Thai Union Earns ACC’s Three-Star Certification.  January 19, 2009.

Thailand

Government to Spend $57 Million to Prop Up Shrimp Prices

The government of Thailand has announced that it will allocate up to $1.8 billion in agricultural price supports to be spread over 11 commodities in 2009.  Shrimp farmers will receive about $57 million, and the government also intends to request an additional budget of $57 to $86 million to finance agriculture marketing activities that will include shrimp.  The government also pledged to introduce shrimp as the fifth product traded on the agricultural futures market in Thailand.

Source: Seafood.com (an online, subscription-based, fisheries news service).  Thai government to spend $60 million propping up shrimp prices as part of $1.8 billion ag plan.  Editor and Publisher, John Sackton (phone 781-861-1441, email jsackton@seafood.com).  January 16, 2009.

United States

Alabama—Wanted, Original Shrimp Art

The Alabama Gulf Coast Area Chamber of Commerce is seeking artists to submit original artwork for consideration in the 38th Annual National Shrimp Festival poster contest.  The winning design will become the official 38th Annual National Shrimp Festival poster and the official logo for all festival merchandise.  The selected artist will receive a payment of $1,000.  The words “38th Annual National Shrimp Festival” and “2009” must be on the poster, and it must carry the theme of food, music—and shrimp.  The poster must not exceed 18 inches horizontally by 24 inches vertically, and only one submission per person is allowed.  Submission deadline: March 13, 2009.

Information: Megan Smith, Gulf Shores Chamber of Commerce (phone 251-968-7220, email events@alagulfcoastchamber.com).

Source: BaldwinCountyNow.com.  Shrimp festival poster artist needed.  January 17, 2009.

United States

Illinois—Is the Chitosan That’s Used to Clarify Wine Allergenic?

Some small-scale wine makers use chitosan, made from the shells of crustaceans, to clarify their products.  One of the wine makers asks, when chitosan is used to clarify wine, could it cause a reaction in people who are allergic to crustaceans?

Ray Ruthenberg, from Woodbine, Illinois, answered: Though I’m no medical doctor, from what research I was able to pull together, if I personally had a shellfish allergy, I would feel comfortable using chitosan products to clarify my wine.  I will let you make up your own mind (in consultation with your physician of course), but from what I understand, seafood allergies derive from proteins in crustacean flesh, not from materials in their shells.  During the manufacturing process for chitosan, only the shells (no fleshy protein bits) are used.

Source: Wine Maker.  Chitosan, dry climate grapes: Wine Wizard.  Alison Crowe.  June/July 2008.

United States

Missouri—Job, Aquaculture Nutritionist for Fish and Shrimp

Novus International, Inc., has a position open for an aquaculture nutritionist.

Salary: Commensurate with experience.

Closing Date: March 15, 2009.

Qualifications: Candidates should have a PhD in Aquaculture Nutrition (or related field or equivalent experience) and a track record of demonstrated research capabilities.  Research experience and communication ability documented by publication and presentation record is required.  Candidates should have experience with development of formulations and production of feeds for experimental trials with aquatic animals.  At least two years prior experience working with commercial aquatic feed industry and successful international research collaboration is preferred.  Candidates will be expected to develop statistically sound experimental designs, oversee feeding trials with fish and shrimp, analyze data and produce reports, presentations and publications.  Candidates who have a demonstrated ability to translate research results into practical applications for improving profitability and sustainability of international aquaculture are encouraged to apply.  At least two years prior experience working with commercial aquatic feed industry and successful international research collaboration is preferred.

Novus International is a leading developer of animal health and nutrition programs for the poultry, pork, beef, dairy, aquaculture and companion animal industries.  Based in St. Louis, Missouri, Novus has more than 25 locations around the world and clients in over 80 countries.  It employs more than 50 PhDs.

Information: Send a letter of interest and resume via email to Craig Browdy (phone 843-793-7610, email craig.browdy@novusint.com).

Source: AquaNic (The Aquaculture Network Information Center, a gateway to the world’s electronic aquaculture resources).  Jobs Directory in cooperation with the WAS Employment Service.  Search jobs.  Aquaculture Nutritionist (http://aquanic.org/jobs/jobinfo.asp?jobid=3041).  Date Posted: January 23, 2009.

United States

Washington, DC—How to Become a Third-Party Shrimp Certifier

The Food and Drug Administration (FDA) has announced new guidelines for third party certifiers.  Titled Voluntary Third-Party Certification Programs for Foods and Feeds, it describes general guidelines for a third-party certification programs.

Submit written requests for single copies of the guidelines to the Office of Policy, Office of the Commissioner, Food and Drug Administration, 10903 New Hampshire Avenue, Building 1, Room 4337, Silver Spring, Maryland 20993-0002, USA.  Include one self-addressed adhesive label to assist in the processing of your requests.  You can also get a copy of the guidelines by calling 1-301-796-4840, or by going to http://www.fda.gov/oc/guidance/thirdpartycert.html.

Information: Sharon Lindan Mayl, Food and Drug Administration, 10903 New Hampshire Avenue, Building 1, Room 4337, Silver Spring, Maryland 20993-0002, USA (phone 301-796-4840).

Source: TMCnews.com.  Guidance for Industry on Voluntary Third-Party Certification Programs for Foods and Feeds; Availability.  January 16, 2009.

United States

Washington, DC—2009 Seafood Safety Legislation Introduced

On January 6, 2009, Senator David Vitter, a Republican from Louisiana, introduced the Imported Seafood Safety Enhancement Act of 2009, legislation that would ensure the safety of seafood and seafood products being imported into the USA.  The bill has been referred to the Senate Health, Education, Labor and Pensions Committee.

Source: Seafood.com (an online, subscription-based, fisheries news service).  Sen. Vitter introduces Imported Seafood Safety Enhancement Act.  Editor and Publisher, John Sackton (phone 781-861-1441, email jsackton@seafood.com).  January 19, 2009.

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