Investing In Farming Pearls May Be Risky

No one doubts that investment in precious gems such as pearls is a sound long-term strategy. However, investing in pearl farming is a much riskier proposition. For example, look at the case of Robert Reimers Enterpises in the Marshall Islands.

Ramsey Reimers, company chief executive officer, told The Marshall Islands Journal in July 2007 the company was shutting down its 10-year effort to establish a viable black pearl industry for financial reasons.

Reimers said the company's other businesses were subsidizing the pearl farm "but this in no longer feasible."

The main problem with the black pearl farming operation involved the lack of spat, baby oysters used to grow the pearls. Without a reliable source of new stock, any pearl farming operation is destined for failure.

Spat is available in the wild in the Marshall Islands but only in limited supply.

A private hatchery owned by the now-defunct Black Pearls of Micronesia provided some spat for the Reimers operation, but it closed in 2002. The Marshall Islands Marine Resources Authority and has since been trying to spawn spat for the industry, with limited success.

Since operating a hatchery is an expensive proposition, the help of the government is required. The multimillion-dollar black pearl operation in the Cook Islands and Tahiti is heavily subsidized by the government and low-interest loans are available.

For the Marshall Islands to have a successful farming operation producing pearls, government assistance is required.

This assistance to the growing of pearls would greatly help in the biggest challenge facing any new pearl operations, which is the amount of time between initial development and financial return.