MARSHALL ISLANDS JOURNAL: Pearl farm shuts down

After more than a decade of work to establish a viable black pearl industry, the pioneering aquaculture farming company in the Marshall Islands has officially shut down its last operation, leaving behind an “industry” that officials say will remain “unborn” without real support from the government.

Robert Reimers Enterprises’ chief executive officer Ramsey Reimers told the Journal that RRE had to shut down its Jaluit pearl farm two weeks ago mainly for financial reasons.

“A private company can’t do it alone,” said Reimers. “Over the years we’ve had to subsidize the operation from our other business but this is no longer feasible.”

A top-level manager at the Marshall Island Marine Resources noted MIMRA’s regret over the closure of RREs operation. “RRE is one of the pioneers in the sector, and it is with their growth, that MIMRA undertakes to operate the Woja hatchery, to produce and supply spat for farmers,” said the MIMRA manager.

“(We) regret to learn that RRE is closing its doors after years of successful pearl farming. (We) understand that it is not an easy task, running a pearl farm without a reliable source of spat, and working in sensitive environments, especially here in the Marshall Islands. MIMRA is also to blame for RRE taking the decision to close its farm, after all, it was MIMRA’s part to assist with spat productions.”

In the mid-1990s RRE launched a pearl oyster farm on Arno but wasn’t until the late 1990s and the early part of the new millennium that RRE started to see a financial return on its investment — albeit small in comparison to the initial investment it had made.

Because RRE proved the viability and potential of pearl oyster growing, others entered the field. Private firm Black Pearls of Micronesia was a player in pearl oyster raising for a number of years, and several local governments are currently involved through a grant from the College of the Marshall Islands Land Grant program. Black Pearls, however, shut down several years ago.
Yet even at the height of RRE’s most successful pearl harvest year in 2003 when it had two harvests at Arno and one in Jaluit, the company was already actively looking for investors to provide hatchery assistance to produce spat, the baby oysters needed to replenish and expand the supply being grown each year.

“We used to get spat from the wild but only in a small quantity,” explained Reimers.

Both RRE and Black Pearls of Micronesia were experiencing the same problems — not enough naturally occurring spat. “This is where the industry needed help in, a hatchery,” Reimers said.

BPOM used to have its own hatchery in Woja and it used to provide spat for its own operations and also to RRE. But the company ran into financial problems and had to shut it down in 2002. At the time, then co-owner Bobby Muller told the Journal that BPOM had operated the hatchery for two years and in that time they managed to have two successful spawns.

The hatchery was then picked up by the Marshall Islands Marine Resources Authority and has since been trying to spawn spat for the industry.
“The industry is still unborn,” said Reimers. “The industry needs the government’s support and cooperation and we were hoping MIMRA would manage the hatchery to make it feasible for the industry to develop.”

The financial difficulties faced by both RRE and Black Pearls of Micronesia also underscore a challenge for the still relatively new pearl operations in the RMI: the long lead-time from initial investment to financial return.

While in other South Pacific nations, private producers are netting profits from pearl growing and selling, it didn’t happen overnight or without government support.

Although RRE started its pearl farm on Arno in the mid-1990s, by the end of 2001 it established another pearl farm on Jaluit because it is the only atoll that has indigenous oysters. “But collecting spat from the wild is more expensive and time consuming,” said Reimers. “And a hatchery operation
is far too expensive for the private sector to fund.

“We’re really in a hole and we can’t keep it up. Maybe if a hatchery was established we’d consider restarting but nothing’s been produced. We waited and nothing’s happened.”

At the height of the black pearl craze in the Marshall Islands Robert Reimers Enterprises was harvesting anywhere between 1,000 and 5,000 black pearls from its Arno and Jaluit farms. This translates to $20,000 to $40,000 in the sale of individual pearls. By industry standards this is small, but for this country that lacks any real local industry, this fledgling marine industry demonstrated a real potential as RRE was producing good quality black pearls.

“This is an ideal industry for our country,” said Ramsey Reimers. “We just need more attention and interest on local aquaculture programs.”

In other islands nations such as the Cook Islands and Tahiti, the black pearl industry is a multi-million dollar business.

But the difference between them and us is the support from their government and the businesses access to low interest loans. Back in 2002 when RRE was looking for investors to maintain its pearl oyster farms on Arno and Jaluit they had noted this need citing that in the Cook Islands, the Asian Development Bank had provided low interest loans to assist farmers in the early stages of the industry’s development.

Despite some similarities in the marine environments of black pearl producing island nations, the Marshalls experience in developing a viable black pearl industry has been markedly different from some South Pacific countries. According to MIMRA spat production is intensive in terms of both cost and technical know how.

“In the case of the Marshall Islands, its not that easy,” said the MIMRA manager. “If our waters in the lagoon could sustain and produce spat naturally, oysters spawning naturally in abundance and in good health, we would not have to rely on an hatchery too much, or at all. Unlike Cook Islands where farmers can harvest spat from their natural environment, the Marshall Islands would need to breed oysters in captivity, hence the need for a hatchery.”

RRE pioneered the first privately-owned clam farm in the entire Pacific when it opened its Wau Island operation in Mili Atoll in the early 1980s. That ultimately led to the development of the Long Island clam farm that was sold to a US investor several years back. The closure of RRE’s last black pearl farm brings to an end the private sector’s role in this once-fledgling economic development.

by Suzanne Chutaro, July 6, 2007, Courtesy of Giff Johnson, Marshall Islands Journal