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Shrimp Farmer CP Prima Works To Restore Output
Yohanes Obor | December 18, 2009

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The world’s largest shrimp producer, PT Central Proteinaprima, is working to overhaul its production processes after a year in which output was blighted by the spread of a highly infectious virus and sales were hit by a trade spat with the United States.

“We have taken gradual steps toward a recovery in shrimp production amid our multi-dimensional problems, including implementing prudent management in all aspects of the operations,” Erwin Sutanto, CP Prima’s president director, said at a public presentation on Thursday.

Erwin said the company was focused on limiting the spread of the infectious myonecrosis (IMN) virus, which has devastated the company’s shrimp production. Total harvest volumes plunged from 8,486 tons in January to 3,536 tons in September. Production at the company’s main Central Pertiwibahari farm dried up almost completely — from 5,728 tons in January to below 433 tons in September.

“We have successfully stabilized and improved the shrimp production in Central Pertiwibahari and continue to improve the methodology for preventing the IMN virus from spreading,” Erwin said.

The company’s revenue declined by 14 percent to Rp 5.2 trillion ($551 million) in the nine months to September, while net profit tumbled by 80 percent to Rp 24 billion.

Profit plummeted on lower sales volumes, especially after sales to the key market in the United States were halted in January because of allegations that the company had illegally transshipped shrimp from China.

Export volumes of the company’s mainstay, frozen shrimp products, dropped from 12,800 tons in the first quarter to only 7,300 tons in the second quarter before increasing slightly to 7,565 in the third quarter.

The US again began admitting CP Prima shrimp in mid-year after government representatives intervened on behalf of the company in April.

Profit margins were also affected by the weakening of the US dollar, which dropped from about Rp 12,000 in the middle of the year to Rp 9,500 this week, as concerns about the health of the US economy grew.

Erwin said CP Prima continued to suffer from net cash outflows in the third quarter, primarily because of lower production at its CPB farm and farmers’ impaired ability to pay for feed and fry because of he reduced pond yields.

CP Prima’s working capital rose 9 percent to Rp 2.6 trillion in the third quarter, compared with Rp 2.43 trillion during the second quarter.