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Russ Allen

 

On May 12 & 13, 2000, I visited Russell Allen, president of the United States Shrimp Farming Association and a shrimp farming consultant, in Okemos, Michigan, USA.  I asked Russ about his history in shrimp farming.  When I turned off the recorder two hours later, I had captured a great story and some important historical information on the development of shrimp farming in the Western Hemisphere.

 

In 1970, while sailing around the world, I arrived in the Galapagos Islands, liked it there, and stayed six months.  A couple of years later, in 1973, after graduating from the University of Michigan with a degree in fisheries biology, I returned to Ecuador, bought a 70-foot sailboat and began running chartered tours in the Galapagos Islands.  Peter Shayne operated a shrimp processing plant in Guayaquil, Ecuador, and we frequently bumped into each other socially.  Peter played a pivotal role in the development of Ecuadorian shrimp farming!

 

In 1976, after running tours for three years, I leased my boat to a travel agency and suddenly found myself with a nice income and nothing to do.  Peter hired me as a biologist at $400 a month.  He was building his first farm in Balao, on the eastern side of the Gulf of Guayaquil, about midway between Guayaquil and Machala.  He hired two other biologists: Terry McCarthy, an American, and Juan Villegas, a Colombian (neither currently associated with shrimp farming).

 

In the mid-1970s, Ecuador exported eight to ten million pounds of shrimp a year, 99% of it boat-caught.  Farms produced 50,000 to 100,000 pounds.  Empacadora Nacional, owned by Harry Graham, another member of the small American community in Guayaquil, was the biggest processor.  Harry had a huge shrimp fishing fleet, probably more than fifty boats, in a country with a total fleet of around a hundred boats.  Empacadora Shayne had four boats.  Peter realized that the only way to beat the competition was to farm shrimp.

 

Although there were a few shrimp farms around Machala and Guayaquil, we were the first group to promote the development of shrimp farming in Ecuador.  Peter wanted to create a system that would supply his plant exclusively.  The biologists—Terry, Juan and I—got the Balao farm up and running, and then we tried to learn something about feeding shrimp.  We communicated with Yoshe Hirono and Bill MacGrath (currently shrimp farming consultants) at Ralston Purina, USA, because Purina wanted to run feed trials in Ecuador and compare the results with trials from its shrimp farm in Panama, which, at the time, had only 13 acres in phase-one development.

 

We went up to Agromarina de Panama for a couple of weeks to learn how they did things, and Yoshe taught us how to run the feed trials.  That’s when I first met Bill More, who became general manager of the farm, one of the largest and most successful in the Western Hemisphere—certainly, one of the oldest.  David Drennan (currently managing a shrimp hatchery in the Dominica Republic), Harvey Persyn (currently a successful consultant who, at the time, was working for Purina in Crystal River, Florida), Ron Staha (currently manager of a large hatchery in Panama) and Joseph Mountain (who had a long career at Granjas Marinas San Bernardo in Honduras, now the largest shrimp farm in the Western Hemisphere) were all working for Purina.

 

Later, using Purina feeds, our group introduced the first commercial shrimp feeds in Ecuador.

 

After we built the Balao farm and brought it into production, we used it as a demonstration project to expand shrimp farming in Ecuador.  We trained the first postlarvae collectors, not with push nets out in the ocean but with canoes and dip nets in the local estuaries.  We didn’t know about the coastal postlarvae resource.  We taught the collectors where to look for postlarvae, how to judge their quality, how to identify them, how to count them, how to acclimate them, and how to stock them.  In the beginning, that was ninety percent of our job.  The other farms in Ecuador pumped water into their ponds and grew whatever postlarvae came in with the water.

 

Peter made a deal with Purina to import and sell feeds.  Once a week, the biologists would visit the farms, check growth rates, set feeding schedules, and help the farmers resolve problems.  At harvest, we would make sure the shrimp got to Peter’s plant, pronto.

 

While the farms were getting started, the processing plant needed more shrimp to run efficiently.  Peter’s Ecuadorian partner, Carlos Vélez, hired people to go out at night in canoes to buy shrimp from Empacadora Nacional fishing boats, pay off the captains, and bring the shrimp back to Empacadora Shayne.  Peter would pay them a good price, process it and export it.  Soon Empacadora Shayne processed almost as much shrimp as Empacadora Nacional, which had to deploy a patrol boat to protect its fleet from the canoes.  War-like conditions existed between Empacadora Nacional and Empacadora Shayne, Hatfield and McCoy stuff, in boats, at night, off the coast of Ecuador, just a few degrees south of the equator.

 

Back then, farmers were getting up to $6 a pound for 31-35 count tails.  That was big money, and the reason the industry grew so fast.  In 1977, the shrimp farming industry was so profitable and we were developing so many farms that Peter divided the country into three sectors.  Terry got Machala; Juan got Guayaquil; and I got Manabi, on the central Ecuadorian coast.  Peter and I flew up there for one day to check things out, and I didn’t return for six months.  There was so much to do and so much interest that I designed, built and advised most of the farms in Bahia.

 

Because of the rapid growth of the industry and the processor’s bidding war, Peter started to pay too much for shrimp.  His credit line at the Bank of America in Guayaquil began to deteriorate.  To get the company moving in the right direction would take some new capital.

 

I was in Peter’s office the day Ken Morrison, an agribusinessman from Nebraska, USA, walked in and began negotiating a deal for part of the operation.  Peter, Ken and I spent about three days together—dinners, tours of the farms—discussing potential arrangements.  Peter owned the majority of Empacadora Shayne; Carlos Vélez, a minority.  Morrison bought Vélez’s share and infused new capital into the operation.  Peter got money to build Granmar, a big new farm near Salinas, and Semaqua, the first shrimp hatchery in Ecuador, but he did not have an ownership positions in them.

 

Peter, always the pirate, kept a big commission on the money that was supposed to go Vélez, so Vélez, who had planned to get out of the shrimp business, bought a derelict processing plant in Guayaquil and went into competition with Empacadora Shayne.  Since it was Vélez who had established most of Empacadora Shayne’s business with the Ecuadorian farmers, it was easy for him to grab business from Shayne.

 

By this time, the other biologist and I had made a deal with Peter for a commission on the production from the farms, but, after the deal with Morrison went through, Peter refused to pay.  So, in one day, we moved the entire team of biologists from Empacadora Shayne to Marfrut, Vélez’s new company.  When we left, Peter hired Craig Emberson on the pond side and David Curri in the hatchery—both still active in shrimp farming.

 

We negotiated a deal with Marfrut and went into competition with Empacadora Shayne and Empacadora Nacional.

 

Later, Morrison bought Peter’s share of Empacadora Shayne and changed its name to Frescamar, S.A.

 

It wasn’t long until Marfrut was the biggest exporter in Ecuador.  Vélez decided he wanted a farm as well.  In order to staff it, we needed an another biologist.  On one of my trips home to Michigan, I visited an old professor at the University of Michigan and interviewed two of his prize students: Alexander “Zandy” deBeausset (currently manager of a large shrimp farm in Guatemala) and Mark Rosenblum (currently president of the Super Shrimp Group, one of the largest shrimp farming operations in the world).  Mark got the job.  Eventually, Carlos’s pirate skills got the best of him, our deal with Marfrut ended, and I decided to leave Ecuador in 1979.

 

My wife, Liz, and I packed up all our stuff, got rid of our apartment, and bought tickets for the United States.  As we were leaving for the airport, the phone rang.  Like a fool, I answered it.  It’s Diego Ribadeneira, a big money guy in Guayaquil, saying he had someone at his house who just flew in from Hawaii that wanted to do a shrimp farm.  He talked me into to canceling the flight.  A couple of hours later, I’m in Ribadeneira’s house having lunch with Art Lowe, an American who owns a freshwater prawn (Macrobrachium rosenbergii)  farm in Hawaii.  He wants me to stay and do this big new project in Ecuador, but I insist on going back to the States.  I’m outta Ecuador.

 

A week later, back in my home state of Michigan, I start getting calls from Art, who had sealed a shrimp farming deal with Ribadeneira, saying: “You’ve got to help me with the farm.”  Art had a lot of experience with freshwater prawns, but, at the time, the farm in Hawaii, Lowe Aquafarms, had never grown marine shrimp.  Joe Tabra (now with the Oceanic Institute in Hawaii), Jeff Peterson (now working of a shrimp project in Georgia, USA) and Nick Carpenter (now with Belize Aquaculture) worked for Art in Hawaii, but they were all freshwater prawn guys.  Ed Scura, a specialist in marine shrimp farming (currently running a shrimp hatchery in Florida), was their consultant and helped start Lowe Aquafarms.

 

Anyway, Art offered me a deal I couldn’t refuse, so I went back to Ecuador and designed and built Aquaspecies, a big farm, near the Taura River, about twenty miles southeast of Guayaquil.  I managed Aquaspecies from 1979-1981.  The design incorporated most of what I had learned about shrimp farming over the previous three years.

 

When I left in early 1981, Joe Tabra (currently manager of technology transfer at the Oceanic Institutre in Hawaii) became general manager and Jerome Thompson (currently a shrimp farming consultant in Florida) became farm manager.  Later, Jeff Peterson (currently a shrimp farming consultant in Florida) replaced Thompson as farm manager.  I had finally had enough of Ecuador and I wanted to go where I could do my own project, somewhere new and exiting.

 

During my time in Ecuador, I designed and built, and in some cases managed, approximately 100,000 acres of semi-intensive shrimp ponds.

 

While still working for Aquaspecies and on vacation in Michigan, I again visited my old fisheries professor at the University of Michigan in Ann Arbor.  He said a buddy of his named John Snell was interested in shrimp farming.  Snell lived in Lansing, home of Michigan State University, so I paid him a visit.  He had 8,000 acres in Belize and wanted to do a big shrimp farm.  On our way back to Ecuador, Liz and I stopped in Belize to check out the site.  Sure it was different from Ecuador, but I didn’t see any reason why semi-intensive shrimp farming couldn’t be done there.

 

Liz and I went back to Guayaquil and packed our bags for a final three-month stay in the Galapagos before heading off to Belize.  I then signed a 50/50 deal with Snell.  To get the project started, we each put up some money; he supplied the land, and I supplied the expertise.  In 1982, I built four, one-acre pilot ponds to test local conditions, the first semi-intensive ponds in Belize.  Liz and I spent a year there, lived the first five months in a tent with no running water, no electricity, no refrigeration, right in the middle of the boondocks, no neighbors, no nothing, except lots of bugs!  We never saw Snell.  I got postlarvae from Aquaspecies in Ecuador, stocked the ponds, grew them out, and proved that it could be done.  The plan for the next phase of development was a 100-acre project.

 

Then Snell showed up with his own plan.  Instead of using the growth rates and production figures for vannamei in Belize,he plugged in figures for monodon production in Taiwan.  I told him that he didn’t have to fiddle with the numbers to make it work, but he insisted that the project be presented to investors with his numbers.  We parted ways.  He went on to develop a 300 to 400-acre project with $10,000 to $20,000 investments from people in Michigan.  You can talk to people around here today that were burned by Snell.  He dumped millions and millions into the project and lost every penny because he just would not listen to anybody.

 

In 1983, after splitting with Snell, I got involved with Barry Bowen, currently president of Belize Aquaculture, one of the most advanced, environmentally-friendly, shrimp farms in the world.  In fact, in 1997, I designed and built that farm, too!  But that’s another story.

 

Information: Russell Allen, Aquatic Design, Ltd., 3450 Meridian Road, Okemos, MI 48863 USA (phone 517-347-5537, fax 517-347-4999, email shrimpone@aol.com).

 

Source: Russell Allen, Interviewed by Bob Rosenberry, Shrimp News International on May 12 and 13, 2000. Published on October 4, 2000.

 

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