Benchmark is raising £19m to fund its 49% share of the breeding and genetics joint venture in Chile. Photo: Benchmark

Benchmark hatches £19m joint venture with AquaChile

UK-based Benchmark Holdings and Chile’s biggest salmon producer, AquaChile, have signed an agreement to form a £19 million breeding and genetics joint venture.

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Malcolm Pye: "World-class operation"

The company, which will be named Benchmark Genetics Chile, will produce eggs in the Chaicas high-quality biosecure land-based facilities in Chile, with back-up from Benchmark Genetic’s land-based breeding operations in Iceland and genetic technology from Benchmark’s Akvaforsk Genetics in Norway.

The deal will see Benchmark acquire a 49% stake for US $16.25 million (£12.2m) as well as a $5.4 million (£4m) loan to finance the transaction and to provide additional working capital. It relies on Benchmark raising the necessary funding from investors.

In a market statement, Benchmark said the move accelerates and de-risks its strategy in Chile, where it currently has a limited presence.

Immediate earnings

The company’s management anticipates an immediate EBITDA contribution of £1.81m in the four months to 30 September 2018, £2.4m for the first full year to 30 September 2019, and £4.1m per annum at full capacity.

In a statement, Benchmark said the joint venture is expected to supply AquaChile’s entire Atlantic salmon egg requirement and other customers. The company will also market coho salmon and rainbow trout eggs adapted for Chilean conditions.

Agustín Ugalde: "Building local capacity"

It added that the new company will combine leading-edge technology in salmon genetics and genomics from Benchmark and AquaChile to drive progress in the future on many of the key traits to the Chilean Industry, including resistance to diseases such as SRS and sea lice. 

Disease resistance

"We are very pleased to announce today’s Chilean joint venture combining AquaChile’s existing high-quality land-based production and locally-adapted genetics business with Benchmark’s leadership in salmon genetics and long-standing research in the field,” said Benchmark chief executive Malcolm Pye.

“Together, we believe we will create a world-class operation in Chile.

“Genetics provide the best starting point for production in terms of disease resistance, production efficiency and processing quality and yield. This agreement establishes a strong platform for Benchmark in Chile and we look forward to working with the industry to support its sustainable development for the long-term future.”

Solid track record

AquaChile chief executive Agustín Ugalde said: “This partnership will allow AquaChile to continue improving the genetics of our fish and, with that, the productivity and overall performance in our core salmon and trout farming business.

“We have found in Benchmark a partner with a solid track record and the right focus on the main aspects of our business, such as health, nutrition and genetics. This transaction also validates our efforts to date in building local capacity for the production of salmon eggs to the highest quality and biosecurity standards.”