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CORRESP
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      Margo Caribe Correspondence November 18, 2005

        [Letterhead
          of Margo Caribe, Inc.]

        November
          18, 2005

        VIA
          FAX
          (202) 772-9368

        AND
          EDGAR
          SYSTEM

        Mr.
          Karl
          Hiller

        Ms.
          Lily
          Dang

        United
          States Securities and Exchange Commission

        Division
          of Corporation Finance

        100
          F
          Street, N.E.

        Washington,
          D.C. 20459-7010

        RE:   Margo
          Caribe, Inc. (the “Corporation”)

        Form
          10-KSB for Fiscal Year Ended December 31, 2004

        Filed
          March 31, 2005

        Form
          8-K/A

        Filed
          May
          5, 2005

        File
          No.
          000-15336

        Dear
          Mr.
          Hiller and Ms. Dang:

        We
          hereby
          acknowledge the receipt of your letter dated October 19, 2005 (the “Comment
          Letter”).
          Management has carefully reviewed your comments to the referenced reports
          filed
          the Corporation. We hereby respond to each item included in the Comment
          Letter,
          following the same order and reference number as in your letter.

        We
          have
          responded to your comment regarding the Corporation’s Form 10-KSB for the fiscal
          year ended December 31, 2004 by including language in Note 13 to the unaudited
          financial statements included in the Corporation’s Form 10-QSB for the quarter
          ended September 30, 2005 (the “3Q05-
          10QSB”).
          The
          Corporation intends to include such a statement in the notes to its audited
          financial statements to be included as part of its Form 10-KSB for the
          fiscal
          year ended December 31, 2005.

        While
          management believes that the incorporation of the Commission’s comments will
          enhance the quality of the Corporation’s disclosure relating to its acquisition
          of substantially all the assets of State-Line Bark & Mulch, Inc., we believe
          the issues identified in the comments are not sufficiently significant
          to
          require amendments to the previously filed reports.

        United
          States Securities and Exchange Commission

        November
          18, 2005

        Page
          2

        As
          mentioned above, the Corporation has incorporated your comments in its
          3Q05-10QSB as detailed in our responses below.

        Form
          10-KSB for the Year Ended December 31, 2004

        Financial
          Statements

        Note
          22 - Subsequent Events, page F-26

                  1.

                  We
                    understand that you acquired substantially all of the assets
                    and assumed
                    certain liabilities and the operations of State-Line Bark & Mulch,
                    Inc. on February 16, 2005 in exchange for $2,600,000 in cash.
                    However,
                    based on disclosures in the Form 8-K/A that you filed on May
                    5, 2005, it
                    appears you may have also acquired some assets and liabilities
                    that did
                    not belong to this entity.

        Response:

        Effective
          February 16, 2005, Margo State Line, Inc. (“Margo
          State Line”),
          a
          wholly-owned subsidiary of the Corporation, acquired substantially all
          the
          assets and liabilities of State-Line Bark & Mulch, Inc. (“SLBM”),
          which
          included all the assets presented in SLBM financial statements as of such
          date.
          In addition, real estate consisting of a building and a parcel of land
          of
          approximately 100 acres was acquired from SLBM related parties in connection
          with the transaction.

        While
          the
          legal owner of the above-referenced real property were Mulch Masters Inc.,
          a
          company controlled by the stockholders of SLBM (collectively, the “Affiliates”),
          the
          truth is that the stockholders of SLBM did not maintain proper segregation
          of
          assets and liabilities between their companies. This is primarily because
          SLBM
          was organized as a Sub-Chapter S corporation, and as such, all the revenues
          and
          expenses of all controlled entities were combined on the stockholders’ personal
          income tax returns. Frankly, the stockholders of SLBM ran SLBM and their
          other
          controlled entities as “Mom and Pop Operations.”

        In
          connection with the SLBM acquisition, an asset purchase agreement was executed
          among SLBM, the stockholders of SLBM and Margo State Line (the “Asset
          Purchase Agreement”).
          Schedule 1.7 — Purchase Price Allocation of the Asset Purchase Agreement listed
          all the assets acquired and the liabilities assumed in connection with
          the
          transaction. As set forth in Schedule 1.7, the purchase price of $2,600,000
          included, $450,000 and $200,000 allocated to Land and Building, respectively.
          Two separate Agreements for the Purchase and Sale of Real Property, dated
          as of
          February 9, 2005, were executed among Mulch Masters, Inc., the stockholders
          of
          SLBM and Margo State Line, to formalize the purchase of the real property.
          All
          of these agreements we filed as exhibits to the Corporation’s Form 8-K, filed
          with the Commission on February 23, 2005.

        United
          States Securities and Exchange Commission

        November
          18, 2005

        Page
          3

        For
          the
          3Q05-10QSB filing, we have revised the disclosure relating to the acquisition
          as
          follow:

        Note
          13 - Acquisitions (Excerpt)

        On
          February 16, 2005, the Company, through its wholly-owned subsidiary, Margo
          State
          Line, Inc., acquired substantially all the assets (except for real estate)
          and
          assumed certain liabilities and the operations of State-Line Bark & Mulch,
          Inc. (SLBM), a Georgia corporation, pursuant to an asset purchase agreement.
          Real
          estate consisting of a building and a parcel of land of approximately 100
          acres
          was acquired from SLBM related parties in connection with the
          transaction.
          The
          results of operations of SLBM have been included in the Company’s consolidated
          results of operations beginning February 17, 2005. SLMB was engaged in
          the
          manufacturing and sale of bark and premium cypress and pine mulch, as well
          as
          several composted and potting soils. SLMB products were primarily marketed
          within the United States.

        …

        At
          the
          date of the purchase, out of the total purchase price due to the Sellers,
          the
          Company deposited $740,000 in two escrow accounts to cover any contingencies
          and
          expenses related to potential environmental issues affecting a portion
          of the
          acquired land (less than 10%) is subject to and to cover the final purchase
          price of the Sellers’ real property. On September 3, 2005, the Company completed
          the acquisition of the Sellers’ real property used in SLBM’s business,
          consisting of approximately 100 acres. Therefore, $640,000 held in the
          escrow
          accounts was released to the Sellers as the purchase price of the real
          property.

        Please
          refer to pages 15 - 16 of the 3Q05-10QSB for the full text of Note 13.

        United
          States Securities and Exchange Commission

        November
          18, 2005

        Page
          4

        Form
          8-K/A Filed May 5, 2005

        Exhibit
          99.1

        Independent
          Auditor’s Report

        Financial
          Statements of State-Line Bark & Mulch, Inc.

                  2.

                  We
                    note that State-Line’s independent auditor issued a qualified opinion as a
                    result of State-Line’s departure from U.S. GAAP for matters described in
                    Note D. Please be advised that qualified auditor’s opinion and financial
                    statements not prepared in accordance with U.S. GAAP are not
                    acceptable in
                    SEC Filings, as explained in SAB Topic 1:E.2, for purposes of
                    complying
                    with regulation S-B Item 310.
                    Accordingly,

                  (a)

                  Please
                    amend to present the financial statements of State-Line in accordance
                    with
                    U.S. GAAP, which should reflect only assets and liabilities that
                    State-Line owns, and income and expense items for which State-Line
                    is
                    accountable.

                  (b)

                  Please
                    revise the State-Line Statement of Income to reflect depreciation
                    expense
                    attributable to cost of goods sold in its gross profit
                    measure.

                  (c)

                  In
                    conjunction with the foregoing, you will need to obtain a new
                    audit of
                    State-Line’s amended financial
                    statements.

        Response:

        SLBM’s
          financial statements have been amended as you requested. The Corporation
          will
          file an Amended Form 8-K to present the audited financial statements of
          SLBM for
          the years ended December 31, 2004 and 2003.

        Exhibit
          99.2

        Unaudited
          Pro Forma Financial Information

                  3.

                  Please
                    review your pro forma financial statements to reflect adjustments
                    that are
                    necessary to comply with the preceding comment. If you also acquired
                    the
                    assets and liabilities that the auditor indicates do not belong
                    in the
                    State-Line financial statements, you should include separate
                    adjustments
                    for these items, as well as a narrative describing the terms
                    of the
                    additional transaction. Please disclose the amount and form of
                    consideration conveyed, and the nature if the additional items
                    acquired.

        United
          States Securities and Exchange Commission

        November
          18, 2005

        Page
          5

        Response:

        Please
          refer to Exhibit to Comment #3 for a copy of the revised pro forma disclosures.
          In addition, the Corporation will file and Amended Form 8-K to present
          the
          revised unaudited pro forma financial information as of December 31,
          2004.

        *****

        The
          Corporation hereby acknowledges that (i) it is responsible for the adequacy
          and
          accuracy of the disclosure in its filings; (ii) staff comments or changes
          to
          disclosures in response to staff comments do not foreclose the Commission
          from
          taking any action with respect to the filings; and (iii) the Corporation
          may not
          assert staff comments as a defense in any proceeding initiated by the Commission
          or any person under the federal securities laws of the United
          States.

        If
          you
          have any questions on the responses above or need any additional clarification
          please do not hesitate to contact the undersigned.

        Sincerely,

        /s/
          Luis
          R. Carrasquillo

        Luis
          R.
          Carrasquillo

        Senior
          Vice President and Chief Financial Officer

        c:
          Audit
          Committee Members

          Exhibit
            to Comment #3

          UNAUDITED
            PRO FORMA FINANCIAL INFORMATION

          The
            following unaudited pro forma consolidated statement of income for the
            year
            ended December 31, 2004, as well as the unaudited pro forma consolidated
            balance
            sheet as of December 31, 2004, were prepared to reflect the estimated
            effects of the acquisition of substantially all of the assets of State-Line
            Bark
            and Mulch, Inc. (“SL”) and certain other additional assets (primarily real
            estate) acquired from a related party of SL (collectively, the “Acquired
            Assets”) by Margo Caribe, Inc. (“Margo”), through a newly created wholly owned
            subsidiary, Margo State Line, Inc. Accordingly, the pro forma balance
            sheet
            assumes that the Acquired Assets and the liabilities assumed will be
            consolidated into Margo, the holding company, as required by generally
            accepted
            accounting principles, and that this acquisition occurred on December 31,
            2004. Certain adjustments were made to reflect the fair value of the
            Acquired
            Assets as of the acquisition date.

          The
            unaudited pro forma consolidated statement of income assumes that the
            acquisition occurred on January 1, 2004. In addition, the unaudited
            pro
            forma consolidated balance sheet was prepared to reflect the funds borrowed
            from
            a major stockholder of Margo in February 14, 2005 in connection with
            the
            acquisition. Based on all of the above, actual results may differ from
            those
            presented in the attached pro forma consolidated unaudited financial
            statements.

          Under
            the
            purchase method of accounting, the total purchase price, as further described
            in
            Note 1 to these unaudited pro forma consolidated financial statements,
            is
            allocated to identifiable tangible and intangible assets acquired, based
            on
            their estimated fair values as of the acquisition date. Differences may
            arise
            based on the amount of net assets acquired as of December 31,
            2004, the
            date of these pro forma financial statements, and February 16,
            2005, the
            date of this acquisition. The related adjustments are presented in the
            column of
            adjustments and eliminations.

          The
            unaudited pro forma financial information presented is derived from the
            audited
            financial statements of SL as of and for the year ended December 31,
            2004.
            The unaudited pro forma financial information should be read in conjunction
            with
“Management’s Discussion and Analysis of Financial Condition and Results of
            Operations” and the consolidated financial statements of Margo, including the
            notes thereto, appearing on Form 10-KSB for the year ended December 31,
            2004.

          The
            unaudited pro forma financial information does not purport to be indicative