Chile keeps calm

And car­ries on grow­ing more sta­ble, says Sal­mones Aus­tral direc­tor

Fish Farmer - - Brussels – Seafood Expo Global 2019 -

PRO­DUC­TION growth in Chile over the past four years has been stronger than an­tic­i­pated, Kon­tali an­a­lyst Rag­nar Nys­toyl told the DNB/Fish Pool sem­i­nar in Brussels. He was bullish about Chile’s prospects, es­pe­cially against de­clin­ing pro­duc­tiv­ity in Nor­way, and said Chilean har­vest weights were out­strip­ping Nor­way’s.

But Chilean pro­duc­ers are more cir­cum­spect. Sal­mones Aus­tral direc­tor Jose Miguel Bar­riga Phillips, who has a long his­tory in the in­dus­try and whose father, in­ci­den­tally, was a Scot, said Chile will grow ‘step by step’.

The coun­try cur­rently pro­duces around 250,000 tonnes of coho salmon and trout, and about 700,000 tonnes of At­lantic salmon.

With the Nor­we­gians dom­i­nat­ing the At­lantic salmon mar­ket with close to 1.3 mil­lion tonnes, he said he doesn’t see that Chile can com­pete.

Sal­mones Aus­tral is a medium sized com­pany, in Chile’s top ten, with vol­umes of around 30,000 tonnes of At­lantic salmon a year, and 15,000 tonnes of cock­les.

The com­pany arose out of a merger between two old com­pa­nies in 2013, when the im­pe­tus was ‘more on sur­viv­ing’ be­cause at that time things were very dif­fer­ent, and prices were very low, said Bar­riga Phillips.

‘This was a way to find some kind of syn­er­gies to grow. To­day, the con­sol­i­da­tion is more fo­cused on the long term.’

He thinks there are good op­por­tu­ni­ties for medium sized play­ers be­cause the mar­ket is chang­ing as a re­sult of this greater con­sol­i­da­tion.

There were three or four play­ers at around 100,000 tonnes of salmon but now, fol­low­ing the merger between AgraSu­per and AquaChile last year, ‘you have a big an­i­mal in the ring with close to 200,000 tonnes’.

‘From the mar­ket point of view, if you need to move that amount of fish, the com­pany needs to in­vest in more peo­ple, more mar­ket­ing.

‘I ex­pect we’ll see that, be­cause AgraSu­per is com­ing from a protein com­pany that pro­duces poul­try and pork and they know the way to move huge vol­umes of pro­teins in dif­fer­ent mar­kets.’

Bar­riga Phillips said Sal­mones Aus­tral, head­quar­tered in Puerto Montt, is more fo­cused on the frozen mar­ket, and Chile is very com­pet­i­tive around the world with frozen fish, against the Nor­we­gians es­pe­cially.

‘If you have good op­por­tu­ni­ties you move to the fresh, but in gen­eral we’re more frozen,’ he said.

‘In the last two months we sold more fresh to the US be­cause the price was very good. But if the price goes down, you need to move to the frozen mar­ket.’

He said his com­pany tries not to sell on the spot mar­ket and its main cus­tomers for At­lantic salmon are in the US, China, In­done­sia and Malaysia, but it also looks for niche mar­kets, such as Dubai and Is­rael.

‘We try not to move into the typ­i­cal mar­kets be­cause you need a cer­tain volume for cer­tain big mar­kets, and it’s not easy to move huge vol­umes. We are very open to new mar­kets, try­ing to de­velop frozen prod­ucts, por­tions and fil­lets.’

Some of these mar­kets might have been re­luc­tant to buy from Chile in the past, be­cause of doubts over sup­plies, and pre­ferred to buy fresh fish from Nor­way.

But in the newer mar­kets, such as Is­rael and Dubai and China, Chile is tak­ing a ‘very im­por­tant role’.

‘In Rus­sia, when the Nor­we­gians moved out with the fresh, Chile took over the po­si­tion with frozen prod­ucts,’ said Bar­riga Phillips.

Air freight makes selling fresh fish too ex­pen­sive but lo­gis­tics are im­prov­ing too. With more air­lines – in­clud­ing from China and Korea- com­ing to Chile, the salmon farm­ers can shift their prod­ucts faster and are selling more fresh fish to these mar­kets.

‘Two or three years ago, it was im­pos­si­ble for any air­liner to come to Chile to take fish to China. That is a big change in the last year in the fresh mar­ket, thanks to the air­lines.’

Chilean sup­ply is also more pre­dictable and less volatile than a few years back, helped by fac­tors such as the es­tab­lish­ment of Hen­drix Ge­net­ics in the coun­try two years ago.

Dutch owned Hen­drix ac­quired Trout­lodge, the world’s lead­ing sup­plier of live trout eggs, in 2014, and, with it, a lo­ca­tion in Chile.

Hen­drix Ge­net­ics Aqua­cul­ture Chile was then formed to set up an in­de­pen­dent At­lantic salmon breed­ing pro­gramme, backed by ge­net­ics re­search.

Bar­riga Phillips, a for­mer gen­eral man­ager of Skret­ting, knew Neil Manch­ester from Hen­drix (for­merly owned by Nutreco, par­ent com­pany of Skret­ting) and Sal­mones Aus­tral started buy­ing eggs from Hen­drix’s Chile base last year.

‘I al­ways told them to start pro­duc­ing the eggs in Chile be­cause they im­ported eggs from Land­catch (bought by Hen­drix in 2010) in Scot­land.

‘To­day, it’s very dif­fi­cult be­cause af­ter the ISA dis­ease, Chile are loathe to im­port ge­netic ma­te­rial be­cause you can bring dis­ease.’

Bar­riga Phillips added: ‘From the pro­duc­tion point of view, we are more sta­ble to­day, with the vac­cines, with the ge­net­ics like Hen­drix, with new di­ets and the spe­cial ad­di­tives for the liver, for the skin, for the gills, nu­tri­tion is tak­ing a very im­por­tant role.’

On top of all this, there are new RAS hatch­eries and higher en­ergy sites, with shorter pro­duc­tion cy­cles.

‘This means to­day we can reach a good cost and a pre­dictable cost,’ said Bar­riga Phillips.

‘The sec­ond point is in the past you could see eas­ily 15 per cent mor­tal­ity for At­lantic salmon; to­day, maybe the moral­ity is closer to five.

‘That can pro­duce volatil­ity be­cause if I ex­pect to have a cer­tain volume of losses and they didn’t dis­ap­pear, it’s good for my cost but I will bring more

“We try not to move into the typ­i­cal mar­kets… mar­kets” we are very open to new

fish to the mar­ket. It’s good news but you must be pre­pared for this im­prove­ment or the other is­sue – two years ago we har­vested at 4.5kg and to­day we can har­vest at 5.5kg, that is 20 per cent more.

‘So with big­ger fish and more tonnes, you can bring more fish to the mar­ket. This is good but the volatil­ity is com­ing from this side: bet­ter per­for­mance and that pro­duces higher vol­umes.’

But it’s a good kind of volatil­ity and Bar­riga Phillips be­lieves Chile’s prospects are pos­i­tive – ‘if noth­ing strange hap­pens, this is farm­ing!

‘I think the reg­u­la­tions and our ex­pe­ri­ence shows that we need to keep more calm and grow more sta­ble.’

He is scep­ti­cal about an­a­lysts’ pre­dic­tions. For ex­am­ple, Kon­tali will fore­cast Chile growth of ‘six per cent one month, then the next month the fore­cast is growth of three per cent, then the next month the fore­cast is 10 per cent.

‘I don’t know where they get the in­for­ma­tion. We know the stock­ing of smolts in the sea gives you the next 16 months’ har­vest, the fish is not ap­pear­ing from one day to an­other. It’s im­por­tant to take care that in­for­ma­tion that looks very so­phis­ti­cated some­times has er­rors be­cause for us it’s not log­i­cal, these big changes.’

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