Chile’s aquaculture industry has seen a spate of deals within a week that carry a combined value of nearly $500 million.
AquaChile, the top salmon company in the country, has signed a deal to acquire Salmones Magallanes and Pesquera Eden for $255 million. The transaction will give AquaChile a foothold in the salmon farming sector in the southern Magallanes region of the country, a cold-water location known for being ideal for raising salmon.
Together, Salmones Magallanes and Pesquera Eden bring a total of 26 fish farms, including a recirculating fish farm and a processing plant located in Puerto Natales. Through these assets, Salmones Magallanes produced 22,900 tons of Atlantic salmon last year, however, the company has the capacity to expand this output to 40,000 tons in the medium term, reports Undercurrent News.
“This acquisition is a big step for our company, since it allows us to enter the Magallanes region with the appropriate scale, […] thus increasing the geographic diversification of our business and making it possible to make better use of the concessions we already have in that region,” said Agustin Ugalde, general manager, AquaChile.
AquaChile has been awarded three new licenses for the Magallanes region, and has the area targeted for further development of a sustainable aquaculture industry. Currently the company owns four processing facilities and one tilapia processing facility with a total combined capacity of 166,000 tons per year. Last year, the company posted sales of $632.7 million, reflecting a 2 percent increase year-on-year.
Meanwhile, Agrosuper, the parent company of Los Fiordos, bested a field of rival bidders including AquaChile, Blumar, Los Fiordos, Australis Seafood, and Invermar, to acquire Piscarola Hornopiren and Salmones Frioaysen for $229 million.
This deal, which is expected to close in the third quarter of this year, will give Agrosuper additional licenses to support 40 salmon farms in the Aysen region of Chile.
Friosur owners, Jose Luis Del Rio Goudie and his brothers, Sebastian and Bárbara, decided to put the salmon business on the market in the early months of this year in order to focus on their fishing business, and it was a general assumption among the industry that AquaChile would be the buyer due to the two companies having a long standing joint marketing agreement to sell fish across the U.S. and Canada, according to Undercurrent News.
Hot Spot
Given a combination of climbing widespread consumer demand and the development of technologies that enable companies to scale up fish farming operations in a sustainable manner, various players have been maneuvering to increase their presence along the farmed salmon value chain.
AquaChile and Agrosuper are not the only companies with their eye on Chile’s Magallanes region. In June of last year, Blumar announced its target of investing $150 million in salmon farming operations in the region.
At the end of May 2017 the company’s board approved plans for an Atlantic salmon farming project that would include a processing plant, which is expected to produce five million smolts per year by the third quarter of this year, with an eventual output of 21,000 tons by 2020.
-Lynda Kiernan