Pioneer winds down

Salmones de Chile, formerly known as Salmones Unimarc and one of the pioneers in the Chilean fish farming industry, is downscaling, due to the high production costs and low prices faced by the Chilean industry in the international market.

The move mirrors the plans of other companies, such as Marine Harvest, which will halve its production in the country next year.

With over 30 years in business, Salmones de Chile - together with companies like Invermar and Aquachile - were pioneers in the Chilean salmon industry.

According to El Mercurio, the company has already dismissed two-thirds of its employees - about 600 people.

The company, which has been producing coho salmon and rainbow trout, ran a 15 farm operation in the region of Los Lagos. But now, sources say the company will only keep two coho sites running, while its last farm with trout will be harvested this summer.

Salmones de Chile decided years ago to stop producing Atlantic salmon. However, the trout business has not been profitable either and the company is still losing about US$ 0.5 per kg, while their coho business has suffered from the exchange rate.

"This industry has no further room. Chile is producing salmon at a cost of one dollar higher than in Norway, which means that when Norwegians do not make money, Chile loses 20 per cent, and when Norway earns 20 per cent, our country breaks even. It is a structural problem of the industry," explained one industry insider.

Given this scenario, Salmones de Chile has instructed the stockbrokerage house BTG to find potential buyers.