Fresh Catch Belize Limited was placed into receivership in the latter half of July by First Caribbean International Bank, which had appointed Craig Waterman and Dwayne Branch of Barbados as receivers for the company.
The mono-sex tilapia farm, which had been granted Export Processing Zone (EPZ) status, had been dubbed Belize’s main producer and exporter of tilapia, with exports of whole fish to Guatemala and Mexico and fillet exports to the US. In 2008, production peaked at 4 million pounds (1,865 metric tons), netting US$3 million in foreign exchange, but dropped off the following year. The farm’s production in 2005 was a mere 260 metric tons as compared to 1,245 metric tons in 2009.
At the time the receivers came into the picture about two weeks ago, there were roughly 500,000 fish ready for the market, with another 4 million which would be ready by the end of 6 months. Production had already slowed down in 2009, and in 2010 workers were laid off as production slowed even further.
Amandala was told by sources close to Fresh Catch that the feed—comprised of corn meal, soy meal, animal protein, and fats—had incidentally run out the day after the receivership came in. It would take roughly $1.5 million to get all the fish to the market, a technical source told us.
The only production happening this week, Amandala is advised, is production for sale to the local market, and workers we spoke with say they are concerned whether they will lose their jobs. They are not certain whether the farm will stay open and some of them have children in school.
Amandala understands that without the feed, the fingerlings will not undergo the usual hormone-induced sex change. In this type of fish culture, the fish are fed with hormones before they reach reproductive age, so that no spawning takes place in the grow-out ponds. The argument for the sex change is that the fish grow faster, and get to a bigger size than the females would.
The hormone in the feed causes the female tilapia to change to males, with only 1% escaping the sex-change procedure unaltered. Ninety-nine percent are males, making the culture a mono-sex culture.
The fish farm had gotten US$10.6 million from the bank, but had serious trouble meeting payments. The bankers decided to step in, taking over the company’s management from the Mena family.
According to an employee notice that the Menas – Joe, Emile, Joseph and Bryan – had released to workers on July 23, 2010, Fresh Catch has been experiencing financial challenges for quite some time.
“This was caused by a variety of reasons, some of which were beyond our control,” the family said. “Our efforts included extensive negotiations with potential equity investors, negotiations with financial institutions seeking refinancing of the company’s debt, and a combination of debt and equity investments. We regarded the terms offered as substantially undervaluing Fresh Catch, and so we could not reasonably accept the many options we explored. The proposals would not have solved the problems.”
Generally speaking, three things can happen when the banker takes charge: the banker may decide to shut down operations and sell off the assets to try to recoup all or part of its debt; the banker can keep the company running until it reclaims its money and return it to the original owners; or the banker can retain control until a new buyer steps in.
If the bank keeps the fish farm as a “going concern,” it would help allay some of the fears of workers. Amandala has so far not received a reply from the bank to its queries.
Of note is that without the desired investment and capitalization, the farm had always operated under its capacity. We understand that 31 ponds were to be added to the 100-pond farm. At full production, it can employ about 100 employees; however, about three to four months ago—even before the receivers came into the picture—roughly 30-40 workers were laid off. With operations having cooled down even more, the workforce, we are informed, is down to under 30 laborers, mostly from Cotton Tree Village, Cayo, but also from Belmopan, St. Matthew’s Village, La Democracia and the environs. (Field workers earn around $25 a day, plant workers earn roughly $3.25 an hour.)
The farm, which spans 90 hectares or 220 acres, is about 200 meters from the Sibun River, so proper management is also an environmental and national concern. Massive mortality could affect the nearby water sources.
Speaking with an expert in the field, our newspaper was told that it is important for the fish to be fed and for the aerators to keep running at nights. The aerators pump extra air into the ponds at night to keep the algae count down and ensure the fish have a better survival rate. Leaving them to feed from natural sources would mean slow growth – which would further slash production from the farm.
We know that because of the financial trouble the Menas had been experiencing with the company, the feeding program was already challenged. We have not yet heard from the bankers on this concern.
Amandala understands the operation, located a mile off the Coastal Road’s junction with the Western Highway, includes 90 ponds for production, 5 for breeding, 5 for sex reversal, and 2 reservoirs.
Senator Godwin Hulse, who had served as advisor to the Menas, said that, “These transactions really highlight the problem with doing development using commercial funds as opposed to funds from a development bank…. We really miss the DFC [Development Finance Corporation] in this role and especially the missed opportunity to use BSSB [Belize Social Security Board] funds in a project of this sort with serious national implications.”
The bankers also took charge of Wood Depot, another company in the Mena group. According to documentation in our possession, Wood Depot has a mortgage debenture for US$10.6 million with the bankers under which freehold and leasehold properties were assigned. Our sources say the Wood Depot had guaranteed the loan of US$10.6 million of Fresh Catch from First Caribbean International (Barbados) and First Caribbean International (Cayman).
The Mena family has continued to decline our request for an interview. We were unable to determine how much of the debt to First Caribbean remains outstanding.