MercoPress. South Atlantic News Agency

Record private credit for Chilean salmon farming

Cultivos Marino Chiloé one of the top ten salmon farming industries in Chile managed to obtain a record syndicated loan of 61 million US dollars. The operation is considered a turning point for the industry which for the last twenty years has had private credit access difficulties.

According to the Chilean press the "erratic price performance" of the industry generated certain "mistrust" among financial institutions in spite of the continuous expansion of salmon farming. However since 2002 when the worst "prices crisis" was over and overall the salmon industry managed to survive, banks approached the industry again with a more positive spirit.

"Relations with banks are more fluid because prospects have improved and so have prices. However, I believe the greatest advance has come from the industry which now commercializes a product with greater added value", said Sergio Martinez Production Manager for Cultivos Marino Chiloé.

Actually the cyclical prices evolution forced "companies to improve management, cut costs, increase efficiency and generate a concentration process which means more regular and stable performances, contrary to the turbulences of the past".

The banking system on the other hand has also advanced and learnt how to interpret the salmon farming industry, make a better assessment of the risks involved and has a better idea of positive and negative cycles.

"There are always risks involved but when an industry manages those factors efficiently this is acknowledged by investors and the banking industry", said Victor Hugo Puchi from Aqua Chile another important salmon farming industry.

"The industry has annual growth rates of 12 to 14% just two years after the crisis. It has become the fourth exporting sector of Chile with annual overseas sales of over 1,3 billion US dollars and big corporations are interested in joining the industry", remarked Cristian Gazabatt Corporation Credit Manager from one of the six syndicated banks participating in the record loan.

Some financial analysts also underline that the greater flexibility of Chilean banks can be interpreted as a consequence of the high liquidity.