Report: Turtle Farm gets $30M over three years

Cayman-Islands-Turtle-Farm-Lead

The Cayman Turtle Farm is budgeted to receive a little more than $30 million by the end of government’s current fiscal year in “equity injections” – largely subsidies or money paid to retire debt – according to financial statements completed for the 2011/12 budget year.  

An audit completed by accounting firm KPMG and reviewed by the Cayman Islands Auditor General’s Office put the government’s equity injection during the 2010/11 year at $9.85 million and $9.7 million for the 2011/12 year.  

The projected equity injection for the current 2012/13 budget year is set at $10.5 million, although it’s not certain yet whether the farm will spend all of that cash through the end of the year on 30 June, 2013.  

The massive amount of government funding required to sustain operations at the Turtle Farm was a subject of “going concern”, according to auditors. 

“Cost overruns of the development of the park, lower than projected visitor numbers and operating costs in excess of initial budgets have given rise to significant business risks that cast uncertainty over the company’s ability to continue …” according to the auditor’s review.  

The issues referenced by auditors resulted in the farm being unable to discharge its obligations without access to lending facilities or government equity injections.  

“Furthermore, operational results subsequent to 30 June, 2012, indicate that the company continues to generate significant losses from operations and experience cash flow difficulties,” auditors noted.  

It’s a problem Turtle Farm Managing Director Tim Adam knows well and has spoken about on previous occasions.  

Over the past four government budgets, including the current 2012/13 spending plan, the Cayman Islands government has spent or plans to spend an average of $9.775 million each year in “equity investments” for the continued operation of the Turtle Farm.  

That works out to about $175 dollars per year for each resident of the Cayman Islands, using a population figure of 56,000.  

The payments, according to Turtle Farm Chief Financial Officer Phillip Fourie, are mostly to pay off debt accumulated by the farm during a redevelopment and expansion effort that was undertaken between 2001 and 2004 and other loans that were taken since.  

For instance, this year Mr. Fourie said about $6 million of the $10.5 million will be paid from the government subsidy to retire the principle and pay off interest on that debt. The other $4.5 million will go to making up operational costs of the farm that its revenues cannot support.  

The majority of the remaining facility debt, about $31 million as of the end of October, will be paid off by 2019 or earlier, according to farm officials.  

However, it is doubtful, and Mr. Adam would not give a date for when, the tourism facility might come close to breaking even – much less make any money – within the next several years.  

“I’m not going to make any promises I can’t keep,” he said.  

To just “break even”, Mr. Adam estimates the facility would have to draw twice the number of visitors it draws now per year – 460,000 people – or about one-quarter of Cayman’s yearly total visitors, counting both cruise ship and stay-over tourists.  

That number is not likely to be reached unless Grand Cayman can install a new cruise ship berthing facility in George Town and/or a berthing facility at the West Bay Public Beach, Mr. Adam said. When the Turtle Farm was expanded in the early part of last decade, the business model called for the construction of a cruise dock at the public beach.  

“In the current scenario, where we don’t have a cruise dock … we have to bear in mind that about 70 per cent of our revenues come from the cruise business,” Mr. Adam said.  

He also said an aggressive tourism marketing campaign targeted at stay-over visitors is under way, but that alone won’t create the numbers the farm needs to be solvent. 

Cayman-Islands-Turtle-Farm-Story

Visitors get snap shots of the turtles at the Cayman Turtle Farm in West Bay.
Photo: Jewel Levy
0
0

17 COMMENTS

  1. 10 MILLION per ANNUM for the Turtle Farm – 10 MILLION per ANNUM for Cayman Airways, and what is the annual cost of the financing for the restoration of Pedro Castle – are any financial statements produced to show whether it is a viable going concern ? These are all businesses which, in the real World, would long ago have been put into liquidation.
    Dreams are wonderful things, and each of these entities was, at some point, somebody’s Dream – but each was a Dream without a workable Business Plan and, in consequence, they have all become Cayman’s financial NIGHTMARES.

    0

    0
  2. With the WSPA negative publicity I think the cruise berthing pier will not solve the problems at the turtle farm.
    It surprised me that more revenue was not made from the sale of turtle meat. It is my understanding that more turtles are harvested for turtle meat than released each year.

    0

    0
  3. If we could sell turtleshell and leather products we could easily kill that subsidy. If we could make products like soaps,skin medicine, perfume and other products from turtle oil we wouldn’t be having this conversation . We needed to compromise when we were signing the tax treaties (you sign ours we sign yours). But no one was thinking about our revenues back then.
    We are literally throwing away millions of dollars worth of potential profits and employment because of environmentalists who won’t have a job when its proved in the nearby future that turtle farming is a good thing like cattle ranching. Three acres of land to produce one cow, please get with the future. The leatherback turtle is no longer an endangered species. Nicaragua has been taking turtles from their beaches and their numbers are rising.
    Remember what environmentalists said about the west indian ducks? They were extinct!! Well try not to run them down when you inspect your car ok.

    0

    0
  4. 4dafuture, Do you really believe that natural resources and every live creature on earth exist for economic exploitation of just one group dominant species?

    0

    0
  5. What a scam. Many folks lining their pockets with this enterprise. This is one more of many government ops that just wreaks of……………..

    0

    0
  6. 4dafuture – yes, you’re right, we could make so much money from turtleshell products and leather goods. I just need some turtle leather boots to go with my rhino-hide jacket and lion skin gloves.

    Citing countries like the economic and low-corruption powerhouse that is Nicaragua doesn’t really help either.

    It is a crappy attraction, that is shoddy in many parts, in no way mimics how turtles live in the sea and costs a ridiculous amount to run.

    If it is needed for conservation and meat, run it as that, on a much smaller scale.

    0

    0
  7. They need to turn the Turtle Farm back into a CONSERVATION FARM and release at least a 1000 turtles every quarter!

    Yes… kick out the tourism and government policies and influences. Those who want to use the farm profiteering! That is why the turtles are not receiving the attention like they should! Too much money and government influence involved!

    0

    0
  8. The equity investment will disappear quicker than it arrived. Government should learn a key lesson to good investing and maintaining one’s capital is to know when to cut one’s losses. Stop chasing bad money with more money. Hand the turtle farm over to DART, a private enterprise, and they’ll a profit in about a week’s time.

    0

    0
  9. So the CIG pays US 52 for every tourist to visit the farm? A somewhat unconventional approach to grow arrival numbers, pay the tourists to come. Perhaps if government simply handed out the cash when one arrived they could get to the 460,000 visitor figure they need to break even. I wonder why the politicians haven’t thought of that yet?

    0

    0
  10. The continuing poor financial management of Government assets is not insurmountable. In the commercial world one calls in a company doctor. These people are renown for turning companies around or stating mission impossible.
    Can the Government not reach out to these people otherwise we are eternally doomed.

    0

    0
  11. Ok here is my take:

    As a conversation facility the farm should be run by scientists carrying out research and releasing significant numbers of turtles (hundreds or thousands) to the ocean each year. Clearly this is not a conservation facility. If this is the route we want to go, then we need to downsize it, hire some scientists and keep subsidizing it. We may have some tourists come in and visit, ask them for a donation in the name of conservation.

    As a typical farm the facility is way too large for the demand we have. The land and buildings need to be sold. No trails, pool, aviary, discusting snorkeling lagoon experience, water slides and dirty shark tank are needed. Close all of it down and just sell meat through a front window.

    As a tourist facility the place is not up to par. We’re asking North American tourists to visit this tourist attraction when these tourists have most likely gone to sea world or other North American facilities which are incomparable and far more superior. Govt does not have the money to bring it up to par and the amount of tourists may not justify the investment.

    So what is this place? It clearly cannot be all of the above. The problem is that no one has thought of what it’s purpose should be. Once you figure out its purpose then you can design it to meet that purpose.

    That’s my take anyway like it or not.

    0

    0
  12. Totally agree that this is way too big. The snorkelling pool is dirty and should be shut.

    Don’t need the trails either.

    Need to get the number of turtles down by 50% or more. Thi would reduce the feeding costs and make the ponds less crowded.

    Re-start charging people 100 to release a turtle. And let them have a tag on it saying Released by XXX

    Anyone looked at the restaurant price of a turtle steak recently? It is about the same as filet mignon. No wonder they don’t sell many.

    Make the restaurant and pool a destination for a weekend afternoon. Look how the new Georgetown Yacht Club at Baccadera is packed.

    Selling turtle products is a great idea but the Turtle Farm would need an export waiver from CITES. Such as the Crocodile Farm near Bangkok Thailand has.

    0

    0
  13. I say to you all the turtle farm can be made into a profitable company. Cosmetic oil is high in demand. In the 80’s a 55 gallon of turtle oil was sold for 350,000 a barrel.
    Yes people would buy turtle products the leather is very soft and pliable you could make all kinds of products with it.
    Check Dennis Smith when he used to make costume jewelry in the 70-80’s.Ask him how many employees he had working. Also ask him how much of it was being sold before the environmentalists stop the farm. We had 100,000 turtles at the farm .
    If we were truly conservationist we would pick animals that would create the largest yields per acre of land. If you want to stop a grossly produce animal stop cattle. It takes 3 acres of land to produce one cow. In three acres of land you could produce hundreds of turtles and the profits would astound you.
    We should of gotten the waiver when we signed the agreements on tax treaties. Green sea turtles have been around for 400 million years. Everything that was in the sea and the land has gone extinct not the turtle!! Wise up people explain why the King of England from the 1800’s said the turtles were going to be endangered and it hasn’t yet gone so. One frigate bird (man-o-war) can eat 100 baby turtles in a day. All we have to do is not allow the turtles to go to sea before the turtle shells get hard then the birds can’t eat them. Why haven’t the experts told people that ?
    We have iguanas on this island that the experts say we need to cull them?? You mean kill them ? OMG what happen ? Did they make a mistake? Come on people what about the sea urchins don’t you remember? What about the west indian whistling duck we were told by an expert throughout the caribbean NO more ducks. What happened are you all sleeping ?
    We are on a small island we need a product to sell off this island that we have some expertise in . We need to cut expenses bring down the cost of living.Do you all have a better idea? You’re quick to tear apart something that was working and because people can’t think without an expert giving you all advise you think they are better then your own eyes . Travel to Nicaragua and the rest of central america and tell them the sea turtle is endangered. I’m sure you will hear a very different story if you go.
    Didn’t we have the most amount of turtles nesting in cayman last year? Beaches around cayman and the turtle farm?
    We signed treaties all over the world and are losing banking . We had 625 banks now we have 425 ?? All I hear from tourists everyday is this is where they hide the money. Its what they said on TV and other programs. Money laundering drug money etc.
    Then why does the USA have tax sheltering now in delaware? OOH so bad cayman . Why did they open up ? Because people like you can’t see the future. One day I may be dead and gone , A large country will open a turtle farm and sell everything I’m telling you here. But it will be too late for cayman good luck.

    0

    0
  14. @4dafuture
    Of course there is a good market for turtle products.

    Of course keeping the baby turtles until they are big enough not to be eaten by frigate birds makes environmental sense.

    The problem is that CITES has refused to give the Cayman Island Turtle Farm an exemption to allow them to export these farmed products.

    CITES can do this. Crocodiles are also endangered but if you buy a belt, shoes or ladies purse made from farmed crocodiles in Thailand you get an export certificate so you can legally import them into other countries.

    But, they have refused to give the Turtle Farm this exemption.

    Meanwhile, how about making and selling belts, wallets and purses made from green iguana skin?

    0

    0
  15. Two articles in one day — 1. the Turtle Farm is receiving 30 million per year from the government and 2. The Afterschool Program for local at-risk youth may be forced to close due to a lack of government funding. Do you not see the problem with this? Time to get your priorities straight, Cayman. The amount of money being wasted when it could be used to serve your people and your children is downright shameful.

    Editor’s note: While we don’t necessarily disagree with the sentiment, the story reported that the Turtle Farm had received $30M in government funding over a period of three years.

    0

    0

Comments are closed.