November 3, 2022
By Lynda Kiernan-Stone, Global AgInvesting Media
Cargill and its existing partner Naturisa S.A. forged an agreement with Skyvest EC Holdings S.A. to establish a new joint venture that will bring another shrimp feed production facility under Cargill’s management, expanding supply of high-quality feed to the country’s farmers.
It was back in 2012 when farmed seafood production surpassed global beef production in terms of output tons for the first time. That year, global beef production hit 63 million tons, while global fish farming topped 66 million tons.
Three years later, in 2015, Cargill entered Ecuador’s shrimp feed industry for the first time through its joint venture with Naturisa – the second largest shrimp producer and fourth largest exporter in the country at the time.
Through this venture, the partners agreed to build a $30 million shrimp feed facility under the name Aquacargill del Ecuador near Guayaquil with the capacity to produce 130,000 tons of feed per year.
“Since that time, the Ecuadorian shrimp farming industry has continued to grow, and there is a need to meet the increased demand for high-quality feed,” said Helene Ziv-Douki, president, Cargill’s aqua nutrition business.
Through this new joint venture with Skyvest, Cargill will own and operate the shrimp feed production facility currently owned by Skyvest in the same city of Guayaquil. Originally built in 2018, the plant employs more than 200 people and has a production capacity of 156,000 tons.
“Through this joint venture, Cargill will nearly double its production capacity, and we will improve our capacity to serve our customers and partners,” said Angel Gomez, managing director of Cargill’s aqua nutrition business in northern Latin America.
“We will invest in this facility and expand our offering of shrimp feeds under the Cargill’s Aquaxcel brand to meet increasing demand for feed among our customers.”
Swing Your Partner
The pandemic was hard on Ecuador’s shrimp industry. China, which accounted for three-quarters of Ecuador’s shrimp exports, began restricting imports from the country on fears that COVID-19 could be transferred on frozen seafood packaging.
But last year, the outlook began to turn as Ecuador put energy toward diversifying and strengthening its export prospects. By April 2021, China accounted for 49 percent of Ecuador’s total shrimp shipments – however, this was compared to 82 percent one year prior, in April 2020.
At the same time though, shrimp exports to the U.S. soared by 352 percent in volume and 347 percent in value at 36.2 million pounds worth $92.2 million.
This was largely due to the fact that India, the traditional main supplier of shrimp to the U.S. market, was severely hobbled by COVID-19, negatively affecting that country’s shrimp export volumes.
Seeing an opportunity, the Ecuadorian government began working with Lighthouse Finance, a financier specializing in the seafood industry, with the goal of gaining greater market share in the U.S.
And Cargill is not the only one expanding shrimp feed capacity to take advantage of the situation. Earlier this year Vitapro announced it will invest $80 million in a new shrimp feed plant in the country that will boost output for its Nicovita business by more than 40 percent. This investment brings total capital invested by Vitapro in the country to nearly $200 million, as Nicovita works toward its goal of feed production of 1 million tons in the near future.
“We are proud to announce the investment of more than $80 million destined to expand approximately 45 percent of our production capacity, thus consolidating the Guayaquil plant as one of the largest production centers in the world in relation to balanced feed specialized in shrimp,” said Fabricio Vargas, general manager, Vitapro Ecuador at the time.
This project, and the one just announced by Cargill, are both being driven by ongoing, and expected continual growth for Ecuador’s shrimp farming industry.
“Our joint venture with Cargill has been a big success and a driver of growth for both organizations,” said Francisco Sola, president, Naturisa. “We have established an excellent working relationship and we are excited to participate in this expansion to increase our production capacity of high-performance feed that will continue supporting the growth of the Ecuadorian shrimp industry.”
~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@
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