El Rosario S.A.

Project Description: The proposed US$37 million aquaculture project consists of (i) an expansion of El Rosario ("ERSA" or "the Company") shrimp farm operation from 3,796 net hectares (ha) to 4,196 net ha of grow-out and nursery ponds in response to the growing demand for aquaculture products; (ii) the provision of a bio-security program to the Company to better address disease risk and increase overall productivity; and (iii) improve production efficiency and achieve environmental upgrades in ERSA's processing plants. The project is timely for its contribution to a leading operator in a key export sector (foreign revenues of US$900 million FOB-based in 1998). The expansion will allow ERSA to (i) increase reliance on its own raw shrimp supply; (ii) improve survival rates and achieve better quality control; and (iii) take advantage of economies of scale and vertical integration in the current business chain/structure by increasing capacity utilization of its hatcheries and processing and feedmill plants. The biosecurity component will allow the Company to (i) develop a breed for disease resistance in the larval rearing facilities; (ii) screen diseases with Polymerase Chain Reaction (PCR) technology; and (iii) rehabilitate ponds thanks to the improvement of water quality through chlorination and recirculation.



IIC will be assisting pioneering sponsors who have demonstrated resilience and a capacity to adapt to emerging problems and issues in the shrimp industry. The project's environmental upgrades and bio-security component will (i) have a demonstration effect on the overall direction of traditional shrimp farming in Ecuador and other Latin American countries on the Pacific coast; and (ii) complement sponsor's initiative in widening and disseminating a stock-resistant breed program as a key element in the strategic defense against shrimp viral disease.