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June 13, 2013

Colombia

Cartagenera de Acuacultura Shuts Down

 

Colombian shrimp farm Cartagenera de Acuacultura is looking for investors to revive the company after a failure to refinance debt caused it to close down in February 2013.  Founded in 1983, Cartagenera produced nearly 6,000 metric tons of Penaeus vannamei in 2012.  The family-owned farm has been struggling with cash issues for the past two years, in part due to the market, but also due to the constant re-valuing of the Colombian peso, said its sales manager, Juan Sole.

 

“Colombia’s economy has been doing really well in the last six to seven years, but one of the side effects is that the peso has been revalued every year, and exports are no longer a good business.  With the European and USA markets also depressed in the past two years, all the export margin has been eaten up by the currency rate,” Sole said.

 

There were five to six shrimp farms in Colombia when Sole first joined Cartagenera 11 years ago.  Now, there are only two: Cartagenera and Oceanos.  The latter is owned by Empagran, a large Ecuadorian company that produces more than 8,000 metric tons of shrimp a year in Ecuador.

 

When Cartagenera tried to refinance debt at the start of the year, the banks refused to cooperate.  “Cartagenera needed only $2-3 million, not that much, but the banks didn’t believe in it, and we had to stop production in February,” said Sole.  “There are no shrimp in the ponds.”

 

Based in Barcelona, Spain, Sole has been selling shrimp on behalf of Cartagenera for 11 years.  His main customers are in France and Spain, and he has also opened up a market in Russia, where he sold 600 tons in 2012.

 

It seems incredible that banks would not refinance a company at a time when the shrimp market is in full bull mode, with prices continuously climbing to record highs, said Sole.

 

Cartagenera’s troubles could not have come at a worst time.  Sole said, “The talks started just before the market became really bullish, and no one expected prices to keep climbing as they have; the market has been crazy.  ...I keep getting requests for products from my clients that I can’t fulfill.”

 

Cartagenera, he said, is hoping a strategic investor will help it resume operations.  “One idea is to find a partner or investor, who could bring in some money.  The farm itself is very good.  The company made a huge investment in the farm, and it’s one of the best because everything was integrated with the hatchery and the plant.”

 

As Cartagenera explores its alternatives, Sole is also exploring his.  If Cartagenera finds new owners, he would love to continue working with the company.  “I know the business very well and have the market already set up for it.  We have a market for cooked head-on shell-on shrimp in Russia that took two to three years to open; we also work with some of the most important cookers in France and Spain.”

 

If that does not work, he said, “I’m thinking about becoming a shrimp sales agent for specific suppliers.  I’ve been talking to a few people…  I have solid customer relationships, but I’m very clear that I don’t want to sell just two to five containers… I want to represent one or several producers for the long-term, on an exclusive basis, as I did with Cartagenera.”

 

Source: Undercurrent News.  Editor, Tom Seaman (undercurrent@undercurrentnews.com).  Colombian shrimp producer shuts shop, looks for investors.  Eva Tallaksen (eva.tallaksen@undercurrentnews.com).  June 12, 2013.

 

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