punto10 Pharmaq Newsletter Second fortnight of August

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Allison Hudson
5 years ago
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1 Pharmaq Second fortnight of August

2 1 Brazil, an opportunity for Chilean salmon In the current economic turmoil, Brazil could become a future market for Chilean salmon. It is still not as important as the United States or Japan, but if the US fails to manage its imminent economic crisis and Brazil continues to grow at current rates, it might become the most important market for Chilean salmon, or a plan B for Chilean exporters. Regarding the sharp growth of Chilean salmon in the Brazilian market in the last five years, in that period alone exports to that giant South American country soared by an average of 38% from US$47.6 million as of November 2005 to US$225.2 million as of the same month in A top industry executive commented that this sharp increase is due to various factors, mentioning the operative advantage of being close to that market and that products from Norway (Chile s main competitor) are mostly not available in that country. On the other hand, the same source said the large Asian community in Brazil should also be considered, which drives strong demand for seafood products. There is also the fact that Brazil does not have the right conditions for salmon farming, which reduces restrictions on salmon imports. Concerning consumption, the largest demand is in the big cities in Brazil, especially Sao Paulo and Río de Janeiro, whose middle class has been rising in the last few years. Whole and fileted salmon are what consumers most want. The large penetration of Brazil by the Chilean salmon farming industry took place from 2005 to 2006 when exports soared 87%, explained by the growth of Atlantic salmon, coho salmon and trout. It is estimated that one of the main factors explaining this steady increase is the Chilean brand in Brazil. It is commented that this is a very important issue, as Chile is a less known brand in the United States but quite the opposite in Brazil. Made in Chile is well known and renowned, giving it greater importance. Industry sources add that tuna, widely used to make sushi, will most likely be declared an endangered species in extinction, which could further boost demand for Chilean salmon. The importance of Brazil According to SalmonChile s figures, by November 2010 Brazil was the third most important export market for the Chilean salmon farming industry, accounting for 12% of the revenues (US$225.2 million). The United States was ahead of it with revenues of US$339.7 million and accounting for 18% of the total exports. Japan was the top market with revenues of US$737.8 million, accounting for 40% of the exports amounting to US$1.843 billion as of November 2010.

3 2 Chilean salmon farmers probe banks to start negotiations on loan maturity in 2012 As Chile s financial newspaper El Diario Financiero reported, 2012 will be a key year for the Chilean salmon farming industry. Loan maturities, which will start in 2012, already have many companies in the sector getting ready for renegotiations, and the banks too. Up to now, contact has been made by companies like Salmofood and Fjord Seafood (now Marine Harvest Chile), which have held meetings with local banks to secure new financing to consolidate their liabilities, a senior banking executive said. One of the issues salmon farmers are anxious to resolve is to reduce the number of financial institutions with whom they have debt. In fact, the timescales of the long-term and short-term company loans were extended to an average of eight years. However, there is also the fact that many salmon producers are not happy with the covenants imposed in the loan renegotiations in 2009, as they entail creditor approval whenever they want to launch their growth and investment plans. Another factor companies in the sector want to achieve in the renegotiations is at least one extra grace year. Carlos Odebret: "Fines must be hefty" Fisheries Under Secretary Pablo Galilea announced this week that a bill will be submitted, which includes increasing fines on salmon farming companies that fail to comply with sanitary rest periods. He said that "we believe it is essential to raise fines so they are a real deterrent and thereby prevent any kinds of breaches of the regulations. There are companies, who due to their size can easily figure out an easy way round this difficulty and include the fines in their flows, with it being more beneficial for them to pay the fine and endanger the environment. The message we want to transmit is really drastic." Concerning this initiative, SalmonChile CEO Carlos Odebret said that "besides increasing fines, in our opinion when someone breaches the regulation, which has large neighbourhood effects, fines must be hefty." He said that "punishment, when there is infringement, must be sufficiently severe to prevent someone from committing the same offence again. I also believe it is important to give incentives and this is a pending issue to be able to make progress with the regulation." Cultivos Marinos Chiloé registers shares in the SVS As part of its stock market listing, Cultivos Marinos Chiloé registered US$14 million, divided into 350 million non-par value cash shares of the same and single series, in the Chilean Superintendency of Securities and Insurance (SVS). As the Chilean financial newspaper Estrategia reported, the share placement price in the pre-emptive right period will be US$0.04 per share, and the share price offered to third parties will be decided by the company board of directors, although it will not be lower than the pre-emptive price. If this operation goes through, Cultivos Marinos Chiloé will be the sixth Chilean salmon farming company to be listed and the third this year.

4 3 Environmentalists slam the sustainability of the Chilean salmon farming industry An editorial in The New York Times attacked the Chilean salmon farming industry, claiming the current production model is "unsustainable." Salmon farming companies are now moving to fjords in the Magallanes Region, described by The New York Times as "taking industrial pig farms to virgin prairies." This attack echoes the vision of various Chilean environmental leaders, like Flavia Liberona, CEO of the NGO Terram. She told Radio Bío-Bío that "the unsustainability of Chilean salmon farming companies has not been resolved." Sara Larraín, a former presidential candidate and current director of Chile Sustentable (Sustainable Chile), agreed with what Liberona said and stated that "Chilean companies have not been able to operate with a sustainable salmon farming model." Manuel Baquedano, president of Instituto de Ecología Política, claimed that "it is necessary to clearly determine the sustainability of companies to verify if they will just pollute new seabeds in Chile." "Super food" could replace the Chile as a Food Power slogan in international markets After it came to light that the government is analysing whether to change the Chile as a Food Power slogan, it was revealed that one of the ideas is to modify the concept, mainly its English translation, to a name that might be "Super Food." As El Diario Financiero reported, this change, which was discussed in the Advisory Council to the Chilean Food Industry, will help to make a more direct impact of the campaign in the international arena, due to the degree of "urgency" expressed by some participants for Chile to position itself in new markets like Asia. Sources related to the process told El Diario Financiero that the Chile as a Food Power slogan has been evaluated well, and "it has been an inspiring slogan for the industry and has guided the sector." Nevertheless, they said it "is legitimate for the Chilean Trade Commission ProChile, as a food export promoter, to propose other slogans for use abroad." Chilean aquaculture export revenues soar 44% in 1H2011 driven by salmon farming recovery According to the figures released by Chile s Under Secretariat of Fisheries (SUBPESCA) in its most recent fisheries and aquaculture report, the Chilean aquaculture sector had export revenues of US$1.633 billion up to May this year, which was a 44.5% increase on revenues of US$1.130 billion in the same period of last year. That is explained by the sharp increase of the salmon farming industry in Chile exported 268,966 tonnes of aquaculture products in 1H2011 against the 215,865 tonnes in 1H2010 (+24.6%). SUBPESCA said that rainbow trout was the top export product, accounting for 35.4% of the total revenues and surging 38% on 1H2010, with revenues of US$578.1 million. It was followed by Atlantic salmon, with revenues climbing from US$347.9 million in 1H2010 to US$515.4 million in 1H2011. Coho salmon was in third place with revenues of US$339.8 million, which was a 56.1% increase on revenues of US$217.7 million in 1H2010. The main processed lines of the subsector, i.e., frozen, fresh refrigerated and smoked products, had increases on 1H2010. This growth was driven by the frozen area, with revenues and volume increasing 48.1% (amounting to US$1.106 billion) and 28.2% (181,998 tonnes), respectively, compared to 1H2010.

5 4 Chile s top aquaculture export market was Japan, which accounted for 38% of the sector s total revenues. Then came the United States, Brazil and Russia, "which also had positive revenue results and jointly accounted for 34.6% of the revenue and 27% of the volume of the farmed product sector," said SUBPESCA. Official programme is already out for the GOAL 2011 international conference There are still just over two months to go before the start of the Global Outlook for Aquaculture Leadership (GOAL) Chile 2011 international conference, to be held from 6-9 November at the Grand Hyatt Hotel in Santiago (Metropolitan Region), and on Tuesday 23 August the organisers delivered the official programme for this event. Wally Stevens, the CEO of The Global Aquaculture Alliance (GAA), will open the conference on Monday 7 November (Sunday 6 November will be for receiving participants) with his welcoming speech. The "production sessions" will then commence, which will provide a review of the shrimp industry, to be given by James Anderson of the World Bank and Diego Valderrama of the University of Florida (United States). Ragnar Tveteras of the University of Stavanger (Norway) and Ragnar Nystoyl of Kontali Analyse will focus on fish and salmonid production, respectively. When the "production sessions" have ended, the "sanitary management panel" will start. This will be moderated by GAA President Dr. George Chamberlain, and presentations will be given on aquaculture production in emerging economies and production trends of different species and how that will affect global markets. The sanitary management of land species will also be analysed to include those experiences in sea farming. The sessions will end with Adolfo Alvial Asesorías CEO Adolfo Alvial giving a presentation about the work of a committee of experts on the recovery of the salmon farming industry after the infections salmon anaemia (ISA) virus. The "global investment in aquaculture" session on Monday 8 November will be moderated by Dr. Jeff Fort, an economist and member of the GAA board of directors, and Gorjan Nikolikel of Rabobank Holland will give the key speech on: "Will the aquaculture industry find the capital needed to double its output in a decade? Then, based on Nikolikel s speech, Víctor Hugo Puchi, the chairman of the board of Empresas AquaChile, will give his experience as a businessman and investor in the salmon farming industry. This panel will also address the new diets in farming hydrobiological species and how their formulation is related to energy efficiency and the carbon footprint. These issues will be presented by Jonathan Shepherd (United Kingdom) of the International Fishmeal and Fish Oil Organisation (IFFO) and Dan Lee of the GAA. The session on the "marketing and sale of aquaculture products" will be held on the last day of Wednesday 9 November, which will be moderated by Peter Redmond, member of the GAA and former senior executive of Walmart. Retailers and food and fast food service suppliers will participate, and they will analyse the demand and expansion of current and forecasted markets, regulatory restrictions and innovation for the farming of new species. Presentations will also be given by Albert Zeufack of the World Bank, Chris Brown of ASDA (United Kingdom) and Roger Bing of Darden (United States).

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EMPRESAS AQUACHILE S.A. RESULTS FOR 1 TH QUARTER May 2015

EMPRESAS AQUACHILE S.A. RESULTS FOR 1 TH QUARTER 2015 May 2015 1. About Empresas AquaChile S.A. 03 2. Quarterly Summary 04 3. Analysis of Results 06 4. Balance Sheet Analysis 13 5. Cash Flow Analysis 15