The Shrimp business EXPOSED in Ecuador

"How could someone with so much damn money be so ignorant of Marketing?" I thought...

...as I watched a wealthy Ecuadorian friend struggle to fill a hotel she had in Ecuador. The hotel was a nice little hotel, great location, and good value for the price compared to other nearby options. But it was empty. Due to lack of marketing.

"She's never had to market anything, she got rich from the Shrimp business in Ecuador, where all you do is produce and the buyers hunt you out!" My friend responded.

He was right.

Man, what a great business when all you have to do is produce and buyers will come knocking at your door. No sales, no marketing, no customer service needed.

Shrimp farming is big business in Ecuador, and one of the top export products of the country.

Many of the wealthy locals are into it, and it's an interesting opportunity most foreigner investors in Ecuador don't even consider.

Shrimp farming is done up and down the coast of Ecuador. All the way from Esmeraldas (where it's big) to the Peruvian border.

The Shrimp are harvested in a series of salt water pools. Shrimp grow best when the salinity of the water matches that of the ocean. And to cut down the harvest cycle its best to use incubator pools and grow the shrimp in steps, so you're "always harvesting", as one colleague of mine who owns a 120 hectare shrimp farm proudly proclaimed.

First off you have to acquire the farm. Shrimp farms in Ecuador go for around $15-20k per hectare. It makes sense to have at least 25-30 hectares, if you have less your fixed costs will still be the same but you'll be making less money.

But as my colleague who owns the shrimp farm admitted, "you can make your money back in 2-3 years in the Shrimp business, sometimes less." That's on the low end a 50% annual return.

The harvest cycle.

The harvest cycle is every 3-4 months. And you'll need about $2000 of operating capital for variable costs per hectare of farm per cycle. But remember, with multiple pools you'll always be harvesting.

You'll also need one employee per 12 hectares of farm to whom in Ecuador owners pay roughly $350 a month.

The most efficient farms produce 3000-5000 pounds of shrimp per hectare per cycle, and depending on the size of the shrimp sell for $2 per pound on the open wholesale market.

So on the more conservative end, you're looking at $4000 of profit (3000 lbs x $2= $6000 - $2000 operating costs) per hectare per cycle. So for a 30 hectare fully producing farm you'd be looking at $120,000 of net profit every 3 months.

And did I mention you don't have to deal with any whiny-little-brat customers?

The sales/export process:

Simple. American shrimp wholesale buyers prefer to buy headless shrimp, while Europeans will buy the whole shrimp from you (and the head makes up 33% of the net weight of the shrimp!).

Most farmers in Ecuador simply sell to an exporter at the prices listed above who then handles the international clients and the whole export process.

Dom Buonamici
Entrepreneur, Traveler, Manager