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November 18, 2013
Pescanova's Shrimp Farms in Latin America Lose $27 Million
According to Deloitte, the largest financial consulting firm in the world, between 2007 and April 30, 2013, Pescanova, the troubled Spanish seafood giant that has filed for bankruptcy, invested around $490 million in 10,465 hectares of shrimp farms, hatcheries and processing plants in Latin America. The shrimp farms—Promarisco (Ecuador), Camanica and Serviconsa (Nicaragua), Nova Guatemala and Nova Honduras—had combined losses of $27 million for the first four months of 2013. According to Deloitte’s bankruptcy report, Pescanova’s Latin American shrimp subsidiaries currently have total debt of $401 million, owed to companies within the Pescanova group and to external parties.
Promarisco in Ecuador
Pescanova acquired Promarisco, which currently has a shrimp processing plant with a capacity of more than 400 tons a day, a hatchery and farms with 3,255 hectares of ponds, in 2008 and invested $192 million in the business.
In the first four months of 2013, Promarisco, reported a loss of $12 million, compared to a net profit of $1.4 million for the whole of 2012, which was itself a huge drop from $6.7 million in 2011.
The drop in 2013 was largely due to a collapse in shrimp production, which fell to 4,218 metric tons in the first four months of 2013, generating sales of $35 million. This compared to 32,892 tons worth $237 million for the whole of 2012, and 32,755 tons worth $240 million in 2011.
High mortalities in the second half of 2012 and the first four months of 2013 were partly to blame for the drop.
The workforce at Promarisco has been reduced from 3,276 in 2012 to 2,178 in the first four months of 2013, a 33.5% reduction. This was due to the sale of farm sites—such as Josefina I and Josefina II—to the owners of rival processor Songa. The sale of Josefina I and Josefina II—both valued at $19 million—had a negative impact in the company’s turnover of around $6.7 million.
The main asset of the company is its processing plant in Duran, Ecuador, valued at $79 million. After the sale of the two farms to Songa, Promarisco had 3,255 hectares of shrimp ponds, valued at $41 million. The laboratory-hatchery is valued at $5.3 million and other assets at $1.9 million.
On April 30, 2013, Promarisco’s debt amounted to $151 million.
Camanica in Nicaragua
In Nicaragua, Camanica has 3,530 hectares of shrimp ponds and a processing plan. It had a loss of $8.4 million in the first four months of 2013, compared to net income of $12.3 million for the full year 2012 and $177 thousand for the whole of 2011.
Production decreased because funds were not available to buy feeds, leading to slower growth rates and disease in the ponds.
In the first four months of 2013, Camanica sold 1,008 metric tons of shrimp valued at $7.1 million. In 2012, sales were 7,821 tons valued at $50.6 million and, in 2011, sales were 4,511 tons valued at $30.5 million. Its processing plant is valued at $49.4 million; its hatchery at $15.9 million; its shrimp farms at $77.6 million; and other assets are valued at $135 million.
On April 30, 2013, its debt equaled $129.8 million.
Pescanova owns 66% of Serviconsa, which has 1,450 hectares of shrimp ponds in Nicaragua. The rest of the company is owned by Serviconsa’s management team. In the first four months of 2013, Serviconsa produced 963 tons of shrimp, valued at $4.7 million, a growth in production, but a drop in value. The drop in valued—22% less than in 2012—was due to the need for funding in the first months of the year that forced the company to sell un-processed, small shrimp at low prices.
Serviconsa’s shrimp farms represent 42% of its assets and are valued at $17.1 million.
Nova Honduras had losses of $1.9 million in the first four months of 2013, while net income in 2012 and 2011 were $221 thousand and $172 thousand, respectively.
Sales in 2012 totaled 2,812 tons, worth $18 million, up by 28.4% from 2011.
Nova Honduras sold 201 tons of shrimp through March 2013, compared to 2,081 tons in all of 2012 and 1,732 tons in all of 2011.
Nova Honduras’ main assets are its farms, valued at $29.3 million. Through 2011, investments of $41.2 million were made in its 1,050 hectares of shrimp ponds.
In 2011, Nova Guatemala’s 217 hectares of shrimp ponds registered losses of $1 million, after an investment of around $39 million.
In 2012, its farming and processing operations were profitable, showing net income of $517 thousand. In the first four months of 2013, however, it had losses of $5.3 million.
Nova Guatemala sold 984 tons of shrimp valued at $7.2 million in the first four months of 2013. In 2012, it sold 5,078 tons of shrimp valued at $51.5 million, and in 2011, it sold 3,817 tons valued at $49 million.
At a cost of $8.5 million, Nova Guatemala is implementing a new production strategy of intensive farming on a small scale. Management does not foresee profit in 2013.
The company has reduced its workforce from 1,383 employees in 2012 to 872 employees in 2013, a 36.9% drop.
Source: Undercurrent News. Editor, Tom Seaman (firstname.lastname@example.org). Pescanova Shrimp Ops Racked Up $30m Losses in Four Months. Alicia Villegas (email@example.com). October 29, 2013.
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