CENTRAL PROTEIN PRIMA: SHRIMP BUSINESS

As Gunawan Taslim, Director of PT Central Protein Prima, flew from Jakarta to Lampung in June 2009, he thought about the decision he must soon make on CP Prima’s strategic action to some problems from declining orders affected by global crisis, rejection from US Custom for their 37 containers contained frozen shrimp product,  accusation from Shrimp Club Indonesia (SCI) that the company would re-sell the rejected product into domestic market while the frozen shrimp product should be exported to overseas market, to a failure of shrimp harvest caused by virus disease. He was due to attend a meeting with Board of Commissioners in early July 2009. Gunawan thought, “The good news is the sales increased almost 39% in the last September comparing to last year. The bad news is we still can not find the market to re-sell our rejected 37 containers from US Custom.”

This was a critical decision for Gunawan and CP Prima. An increasing leverage and rupiah depreciation caused by global crisis would affect cash flow position. The declining cash flow position could lead a default on debt covenant. The default could lead a declining rating on CP Prima obligation position.