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Frustrated out of business - American investor locks down shrimp farm and heads home
Published: Friday | December 6, 2013 19 Comments
Tameka Gordon, Business ReporterPlagued by thieves and water contamination, owners of the marine shrimp farm Trans-Global Aquaculture Limited have placed the company in liquidation after a dozen years of fighting to stay afloat.
Trans-Global, whose operation sits at the mouth of the Rio Minho in Clarendon, says it has suffered from theft of both equipment and its stock since inception.
The Jamaican operation is owned by an American company, Trans-Global Products Inc, which poured US$6 million into the company at start-up to sell shrimp to markets in the United States, Canada, Taiwan, Japan and Europe.
Its production target was 10-12 million pounds of shrimp per year.
At the time of its start-up, its parent company held contracts in the US that required between five and 10 million pounds of shrimp annually, with Europe, specifically Spain and France, targeted as secondary markets.
Unprofitable
"They did produce quite a bit, (but) even at that highest stage of production they were not profitable because of the issues," former Trans-Global Aquaculture Manager Noel Thompson told the Financial Gleaner.
"The two major problems they had were praedial larceny and water quality issues, which mainly had to do with the dumping of dunder by the Clarendon distillery into the river. There was theft of the shrimp, equipment and other things like electrical cables," said Thompson.
Trans-Global Aquaculture operated from a 1,600-acre property leased from the Government. The company's business plan had envisioned expansion to utilise more of the property.
"They reached a stage where they put in roughly 700 acres in ponds — 400 acres of pond would have occupied between 600 to 700 acres of land because of the infrastructure which accompanied the ponds such as reservoirs and drains and they were hoping to expand to cover the entire 1,600 acres, but when they met upon these problems they had to pull back," said Thompson.
Marine shrimp farms use a mix of salt and fresh water, which is pumped into the ponds housing the stock. The aquaculture project was located at the point where the Rio Minho meets the sea.
"You have to pump that mix of sea and fresh water into the pond, but use screen mesh to prevent fish and other marine life from entering the pond," said Thompson.
The river water was not treated, he said, which resulted in the death of the shrimp from the dunder released by the distillery.
"In the dry season, when the water level is low and there is not enough fresh water to dilute the dunder, that's when it does significant damage. The dunder depletes the oxygen supply in the water, so the shrimp are starved of oxygen and die," he explained.
What should have been a strategic location in the establishment of the company's operations turned out to be to their detriment as thieves entered the unfenced property by sea and helped themselves to as much as 4,000 pounds of shrimp per night, Thompson said.
"The stealing took place continuously, they employed several different security companies but none was able to fully control the problem and they had limited success using the police," he said.
"I can't put a total to it because so much was stolen but I remember persons would tell me they had up to 2,000 pounds of shrimp in their freezers."
Thompson said he was brought into the company in the latter two years of operation to help curtail its financial haemorrhage. Trans-Global has had some success in having thieves prosecuted but the praedial larceny persisted despite convictions.
"They would hold up the security guards and just take what they want. After awhile the owner got so fed up he refused to come back to the island," the manager said.
And as Trans-Global haemorraged stock, it also bled red ink. The last assessment, he said, showed "losses of roughly $12 million to $15 million".
The company has advertised its final meeting of creditors and members to be held on December 16.
Liquidator Vitus Evans says Trans-Global Aquaculture has current assets of $49 million but owed related parties $174 million as of July 31, 2013.
"At the time when I took over the liquidation process they had already paid all their creditors and made their staff redundant, since it was a voluntary liquidation. They did all their payments before it came to me," Evans said.
The greater portion of the company's assets which included pumps, processing plant equipment and tractors were sold to overseas entities, the manager said.
Trans-Global employed 250 people directly between the farming operation and the processing plant, the latter of which ran on two shifts. The final 32 workers were cut a year ago when the company collapsed from the weight of its losses.
The 50-year lease on the land was also terminated, Thompson said.
When contacted for an overview of the issues concerning the local shrimp farms, acting chief executive officer of the fisheries division in the Ministry of Agriculture, André Kong said: "The truth is we don't have any legal mandate at this time to manage and monitor the aquaculture industry. We are aware that there are issues to be dealt with É but we don't have any influence over it."
The Ministry's contact with Trans-Global has largely related to collection of production data, Kong said.
"The parent company got in to production here because they basically wanted to stabilise the supply and get it closer to the market they serve as they were mainly importing from Asia," Thompson said.
Trans-Global Aquaculture was incorporated in September 2000 but construction of the hatcheries was done in 2002. Its directors, Mac Chen and daughter Irene Chen, could not be reached for a comment.
Parent Trans-Global Products Inc has been in business since 1982. The company has "agents and employees who purchase seafood throughout the world," as noted by its website, and currently specialises in pasteurised crabmeat and a variety of frozen fish fillets.
tameka.gordon@gleanerjm.com
Published: Friday | December 6, 2013 19 Comments
Tameka Gordon, Business ReporterPlagued by thieves and water contamination, owners of the marine shrimp farm Trans-Global Aquaculture Limited have placed the company in liquidation after a dozen years of fighting to stay afloat.
Trans-Global, whose operation sits at the mouth of the Rio Minho in Clarendon, says it has suffered from theft of both equipment and its stock since inception.
The Jamaican operation is owned by an American company, Trans-Global Products Inc, which poured US$6 million into the company at start-up to sell shrimp to markets in the United States, Canada, Taiwan, Japan and Europe.
Its production target was 10-12 million pounds of shrimp per year.
At the time of its start-up, its parent company held contracts in the US that required between five and 10 million pounds of shrimp annually, with Europe, specifically Spain and France, targeted as secondary markets.
Unprofitable
"They did produce quite a bit, (but) even at that highest stage of production they were not profitable because of the issues," former Trans-Global Aquaculture Manager Noel Thompson told the Financial Gleaner.
"The two major problems they had were praedial larceny and water quality issues, which mainly had to do with the dumping of dunder by the Clarendon distillery into the river. There was theft of the shrimp, equipment and other things like electrical cables," said Thompson.
Trans-Global Aquaculture operated from a 1,600-acre property leased from the Government. The company's business plan had envisioned expansion to utilise more of the property.
"They reached a stage where they put in roughly 700 acres in ponds — 400 acres of pond would have occupied between 600 to 700 acres of land because of the infrastructure which accompanied the ponds such as reservoirs and drains and they were hoping to expand to cover the entire 1,600 acres, but when they met upon these problems they had to pull back," said Thompson.
Marine shrimp farms use a mix of salt and fresh water, which is pumped into the ponds housing the stock. The aquaculture project was located at the point where the Rio Minho meets the sea.
"You have to pump that mix of sea and fresh water into the pond, but use screen mesh to prevent fish and other marine life from entering the pond," said Thompson.
The river water was not treated, he said, which resulted in the death of the shrimp from the dunder released by the distillery.
"In the dry season, when the water level is low and there is not enough fresh water to dilute the dunder, that's when it does significant damage. The dunder depletes the oxygen supply in the water, so the shrimp are starved of oxygen and die," he explained.
What should have been a strategic location in the establishment of the company's operations turned out to be to their detriment as thieves entered the unfenced property by sea and helped themselves to as much as 4,000 pounds of shrimp per night, Thompson said.
"The stealing took place continuously, they employed several different security companies but none was able to fully control the problem and they had limited success using the police," he said.
"I can't put a total to it because so much was stolen but I remember persons would tell me they had up to 2,000 pounds of shrimp in their freezers."
Thompson said he was brought into the company in the latter two years of operation to help curtail its financial haemorrhage. Trans-Global has had some success in having thieves prosecuted but the praedial larceny persisted despite convictions.
"They would hold up the security guards and just take what they want. After awhile the owner got so fed up he refused to come back to the island," the manager said.
And as Trans-Global haemorraged stock, it also bled red ink. The last assessment, he said, showed "losses of roughly $12 million to $15 million".
The company has advertised its final meeting of creditors and members to be held on December 16.
Liquidator Vitus Evans says Trans-Global Aquaculture has current assets of $49 million but owed related parties $174 million as of July 31, 2013.
"At the time when I took over the liquidation process they had already paid all their creditors and made their staff redundant, since it was a voluntary liquidation. They did all their payments before it came to me," Evans said.
The greater portion of the company's assets which included pumps, processing plant equipment and tractors were sold to overseas entities, the manager said.
Trans-Global employed 250 people directly between the farming operation and the processing plant, the latter of which ran on two shifts. The final 32 workers were cut a year ago when the company collapsed from the weight of its losses.
The 50-year lease on the land was also terminated, Thompson said.
When contacted for an overview of the issues concerning the local shrimp farms, acting chief executive officer of the fisheries division in the Ministry of Agriculture, André Kong said: "The truth is we don't have any legal mandate at this time to manage and monitor the aquaculture industry. We are aware that there are issues to be dealt with É but we don't have any influence over it."
The Ministry's contact with Trans-Global has largely related to collection of production data, Kong said.
"The parent company got in to production here because they basically wanted to stabilise the supply and get it closer to the market they serve as they were mainly importing from Asia," Thompson said.
Trans-Global Aquaculture was incorporated in September 2000 but construction of the hatcheries was done in 2002. Its directors, Mac Chen and daughter Irene Chen, could not be reached for a comment.
Parent Trans-Global Products Inc has been in business since 1982. The company has "agents and employees who purchase seafood throughout the world," as noted by its website, and currently specialises in pasteurised crabmeat and a variety of frozen fish fillets.
tameka.gordon@gleanerjm.com
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