Case Name :      Shrimp Farming in Ecuador

Authors :           David W. Conklin

Source :             Ivey Publishing

Case ID :            97H005

Discipline :        Business & Government Relations

Case Length :    05 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In 1997, Xavier Kayser operated an extensive shrimp farming business in Ecuador. He had introduced several significant technological advances in order to overcome the susceptibility of shrimp to disease, a problem plaguing shrimp farms in Asia. The shrimp value chain consisted of many activities that culminated in the preparation of a wide variety of frozen appetizers and dinners. In order to increase profitability, Xavier faced the challenge of moving up the value chain. Meanwhile, global consumption of shrimp value-added products was increasing rapidly. Foreign food processors and retailers had an interest in guaranteeing supply by integrating backwards into the shrimp farming business. A joint venture might offer benefits to both Xavier and a foreign corporation. This case raises issues of concern from the perspective of both potential partners. Ecuador had just emerged from a political revolution, interest rates and foreign exchange rates were unstable, financial institutions in Ecuador were charging extremely high interest rates, and labor unrest caused fear of work stoppages. In such a rapidly changing business environment, how should Xavier plan for his economic future?