MercoPress. South Atlantic News Agency

Uruguay's main fish processing company under administrative protection

Fripur employs 1.100 people, normally is responsible for 30% of Uruguay's annual exports and currently has liabilities in the range of 70 million dollars.

Uruguay's largest fishing and processing company FRIPUR, has requested administrative protection, or a voluntary concordat with creditors following financial problems with banks and other providers. Liabilities are over 70 million dollars of which 50 million with two banks, according to sources close to the request. The company employs 1.100 people.

 FRIPUR which is Uruguay's leading single fisheries exporting company, with markets in the European Union, United States, Africa and Asia, allegedly has been suffering financial problems since last year, and received a decisive blow when Nigeria cut imports of croaker, which had been one of the mainstays of the group. Normally on average the company represents 30% of Uruguay's annual fisheries exports and 10% of the domestic market frozen fish and precooked dinners.

The company belongs to the Fernandez family, Spanish immigrants who started as butchers and with time got involved in fisheries (1976). Currently the family's group of companies includes a container factory, real estate, and wind farms, among other activities.

The head of Uruguay's Fisheries Resources Department Daniel Gilardoni said the company has been undergoing a complex situation since the beginning of the European crisis.

However “the company is prepared to continue under current market conditions but the fishing industry overall is not going through a good moment. This dates back two/three years, but this does not mean the fishing industry is not viable in Uruguay”, added Gilardoni.

The government official pointed out that fisheries is run by a sector council made up of representatives from the government, companies and the unions, and “we are facing serious competitiveness and productivity challenges”.

Gilardoni admitted that a four months strike of the Uruguayan fishing fleet because of differences on a new contract with the unions hit the whole industry to which must be added lesser catches, lower prices and more competition.

Nigeria was the main market for Uruguayan croaker (70% of catches) but last October a fish imports ban was imposed, and partially lifted a few months later but did not include croaker.

“Besides difficulties with Nigeria, we have had lesser catches, our prices are not competitive in Europe, we have high costs, labor, fuel, so it's not the best moment for the industry” pointed out Fernando Ruiz, head of the Uruguayan Fisheries Chamber.

Even when Uruguayan fisheries exports so far this year have been higher than the same period a year ago, up 22.3%, it must also be taken into account that 2013 was the union conflict year, thus it is more appropriate to compare with 2012, and this shows a 15.2% drop. In seven months of 2014, Uruguay fisheries exports totaled 86.3 million dollars and in the same 2012 period, 101.8 million dollars.

The head of the Sea workers union, Carlos Fagundez admitted that they were aware the situation of FRIPUR was complicated, 'it was not a surprise', and the company is trying to restructure its liabilities, “but the whole fisheries sector is in trouble, both at domestic and international levels”.

Fagundez also mentioned that 'pangasius' from Southeast Asia is distorting world markets and prices, particularly in Europe, and “we have cost problems to compete with the fish farms in Asia that by the way are highly contaminated”.

The Fernandez family which is close friends of President Jose Mujica during the official Uruguayan delegation visit to China in May 2013 tried to interest investors in the company, but the efforts did not prosper.

One of the family Alberto Fernandez is quite close to Mujica and not only supported him during the 2009 presidential campaign but loaned his private plane with which the then hopeful flew to Brazil to meet with President Lula da Silva. He later paid for Mujica's embroidered presidential sash and donated 15.000 dollars for the taking office celebrations in March 2010.

However it must also be remembered that back in 2007 when Mujica was Minister of Agriculture and Fisheries, FRIPUR was caught with a shipment to Europe that did not comply with regulations and the EU consequently imposed a several months fish produce import ban on Uruguay. The company should have received a hefty fine from the Uruguayan government for having triggered the ban, but with Mujica's intervention the fine turned into “a slap in the wrist”, according to congressional members from the opposition.

Also in the 2005/2010 period when Mujica was minister of Agriculture, Livestock and Fisheries, the head of the Fisheries Department wife was secretary to the Fernandez brothers.

FRIPUR back in 2004 was involved with the Holberg in commercial gathering scallops for the European market in the Falkland Islands. The Falklands partners of the operation at the time Hanswell Maritime Ltd.

According to a report from the time, Hanswell's Bob Fiddes said that of the 920 tons hauled on board, 100 tons of saleable scallops emerged from processing. They are initially processed on board the Holberg, then taken to Montevideo in Uruguay, from where they are marketed around the world as Falklands produce with the participation of FRIPUR.