Posted on: Tuesday, March 29, 2005

Kaua'i shrimp farm goes bankrupt

By Sean Hao
Advertiser Staff Writer

Ceatech USA Inc. has filed for Chapter 11 bankruptcy protection raising doubts about the future of the once-promising aquaculture farm on Kaua'i.

In its filing last week Ceatech Director Ernest Dias said the move was made after a review of the company's financial condition and pending litigation. As a result the company would be unable to pay its debts, Dias wrote. He was unavailable for comment yesterday.

Ceatech, which trades on the Over The Counter Bulletin Board, has not filed financial statements since 2003. In its bankruptcy filing, the company reported assets of between $500,000 and $1 million and debts of $1 million to $10 million. The company's stock last traded on March 14 at 8 cents.

The company, which went public in 1997, sells white shrimp for consumption and broodstock for shrimp breeding. Last spring Ceatech shut down operations and buried

20 million dead shrimp after an outbreak of the white spot syndrome virus at its Kekaha farm.

John Corbin, manager for aquaculture development for the state Department of Agriculture, said Ceatech was once one of Hawai'i's biggest aquaculture operations. However, it was unclear whether the company ever resumed operations after dealing with last year's virus outbreak.

"The farm has been given a clean bill of health and they're challenge was to restart," Corbin said. "My understanding is that they didn't — it was a capital issue. It's a disappointment."

Overall aquaculture has been a success in terms of diversifying the state's agriculture sector. Aquaculture, which includes sales of seaweed, shrimp and abalone, was the fastest-growing agriculture sector in 2003 with farm sales of $27.7 million, Corbin said.

It's hoped the sector will continue to grow if Ceatech is unable to emerge from bankruptcy proceedings.

"We'll see," Corbin said. "Hopefully, we'll continue to grow."

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.