Cost Advantages Reshape Industry Chain: Paraguay Takes Over Argentina Shrimp Processing

May 19, 2026 — According to Freezing Products Guide, the regional supply chain of Argentine red shrimp in South America is shifting. Multiple enterprises are moving their processing operations to Paraguay, a landlocked country with no coastline or marine shrimp resources. Low tax rates, low electricity prices, and cost advantages are rewriting the division of labor in this sector.

South Atlantic Company (Wofco‑Conarpesa Group), backed by Spanish capital, plans to build a red shrimp processing plant in Hohenau Industrial Park, Paraguay, with a total investment of about $35 million. The plant will have a daily capacity of 25 tons and create more than 500 jobs, mainly exporting to the United States, Canada, and Europe. Raw materials will be transported overland from Argentina. Conarpesa had previously set up a processing platform near Asunción, marking an early case of industrial relocation.

The key driver is Paraguay’s Maquila (inward processing) regime, which allows foreign companies to import raw materials, process them locally, and re‑export. Export‑oriented projects enjoy very low taxes: some activities are subject to only 1% VAT on processing, plus tariff exemptions and VAT rebates.

Red shrimp processing is labor‑intensive and highly dependent on cold chain, power, and labor, making costs critical. The gap between the two countries is substantial:

Industrial electricity price: about $41/MWh in Paraguay vs. $92/MWh in Argentina

Average monthly manufacturing wage: about $700 in Paraguay vs. over $1,200 for registered workers in Argentina. Corporate income tax and VAT also differ significantly.

Compared with re‑processing in Asia, intra‑South American transportation is shorter, more predictable, and easier to manage. Paraguay is emerging as a new regional processing hub.

Although Argentina retains advantages in fishing grounds, fleets, and ports, processing jobs, cold‑chain operations, and export profits are moving abroad, raising industry concerns. For seafood processing, profitability now depends less on resources alone and more on low‑cost commercialization.

As enterprises recalculate taxes, power, labor, and logistics costs, the Argentine red shrimp supply chain continues to restructure. Landlocked Paraguay, with no marine resources, has entered the global export chain through processing.