Moquegua, Peru

Aquaculture feasibility study

Client: Anglo American

Project feasibility

Pioneering sustainable algae
production in Peru

Starting point

An untapped business opportunity

The region of Moquegua is highly reliant upon the extractives industry – and this reliance will only increase with additional production from a new generation of mines like Anglo American’s Quellaveco. The regional government and other local stakeholders have therefore identified economic diversification as a strategic priority. Our client Anglo American has pledged to stand by Moquegua in this journey.

A comprehensive diagnosis of the regional economy identified competitive advantage in a handful of economic sectors besides mining, including high potential in aquaculture. While the region is not yet a significant player in this industry, its fertile coastal waters, climate, and established fishing culture offer natural conditions to thrive in an activity recently declared of national interest for Peru.

Various steps in seaweed cultivation and processing, taking place both inland and in the sea.

Our approach

A technical feasibility study

Ergo Strategy Group carried out a feasibility study to define a specific investment in seaweed cultivation and processing in Ilo, the coastal province of Moquegua, and to assess its commercial viability. The work started by filtering multiple possible species of algae and processing techniques, identifying Yuyo as the type of seaweed with highest local potential.

The work diagnosed the aquaculture industry in Peru and articulated strengths and weaknesses for seaweed production in Ilo. It looked at supply and demand considerations. It determined key stages of production, opportunities for local value addition, business structure, and regulatory parameters. It evaluated the financial viability of the project, including expected revenues and an estimation of capital and operating costs.

The outcome

The seeds of a new regional industry

The technical feasibility generated a fully fleshed out business model for an investment in Yuyo that aimed to balance economic, social, and environmental returns – for example, the project included supplementary funds to transfer specialist knowledge and support local skills. The modelled investment was conceived as a project unit capable of replicability, ultimately targeting the development of a whole new industry in Moquegua.

The work led to the implementation of a pilot study in Ilo to support engagement of a local fishing association and to test cultivation techniques, yields, and biological characteristics of the new local product. Critically, the study identified potential specialist partners and investors, leading to the constitution of a round table including expert businesses, regulators, and academia, to guide aquaculture expansion in the region.

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