December 23, 2008

Indonesia's PT Central Proteina Prima (CP Prima) will reduce shrimp exports to the US by 10-15 percent over transshipment issues.

CP Prima Director Gunawan Taslim said shipments to the US were affected as the company was suspected of transshipping shrimps from China.

The US customs had detained CP Prima's 40 shrimp containers since October, but had released 31 so far.

Taslim said the quantity of containers held is not significant but they carry headless shrimps that could still be exported to other markets under different packages.

CP Prima is now looking to increase exports to Europe and Asia, and to seek buyers for 434 tonnes of shrimps worth US$3 million that were rejected entry by the US.

The US, now represents 40-45 percent of CP Prima's shrimp exports after the reduction, said company vice president Patrick Yip, adding that they will wait to see if the situation with the US will improve while trying to expand into alternate markets.

CP Prima and the Indonesian government were still waiting for clarification of the detainment from the US customs, while a sample of chemical analysis had been sent to the US to prove the origin of the shrimps. 

In addition, the company has decided to reduce its spending for 2009 from IDR500 billion (US$45.7 million) to IDR400 billion (US$36.5 million). As a result, plans to revitalise PT Aruna Wijaya Sakti (AWS) have been suspended.

Taslim said the weaker rupiah exchange rate against the US dollar had increased CP Prima's debt-to-equity ratio, which may lead the company to break its long-term contracts and declare for default.