MercoPress. South Atlantic News Agency

Chile's salmon industry catching on number one Norway

Chilean Salmon

Low production costs, free trade agreements and a growing health food craze are giving Chilean salmon companies an edge over their Norwegian competitors.

Six of the world's ten biggest salmon producers are Chilean, representing 37% of all the salmon produced worldwide. The remaining four firms are Norwegian, and though Norway controls 40% of the salmon market, Chilean salmon companies are expected to grow nearly three times as fast as their Scandinavian competitors this year. The Chilean salmon giants are AquaChile, Camanchaca, Multiexport, Antártica, Los Fiordos and Cultivos Marinos de Chiloé. These six firms are expected to up their production by 22.9% this year, while the four Norwegian companies – led by world salmon leader PanFish – are expecting an increase of just 8.6% in 2007. Together, the ten companies produced 890,000 tons of salmon in 2006, and are expected to up that number to more than 961,000 tons this year. Chile's chief advantage over Norway is its low production cost: slightly more than 80 cents per pound of Atlantic salmon. Chile's free trade agreements with the United States, Europe and Japan – the world's top salmon consumers – also help, as does increased fish consumption by health-conscious eaters. Labor in Chile is also cheaper than in Norway, and higher ocean temperatures allow salmon to grow more quickly. Chile continues to struggle with several disadvantages, however. It faces high export costs due to its distance from major markets: Chile's fresh salmon export cost is 56 cents per pound, while Norway's is just 12 cents. Farmed salmon mortality rates are also much higher locally than in Norway. Chile's biggest salmon company – ranked third internationally – is AquaChile, which recently announced its decision to enter local and international stock markets last week. The firm began to grow rapidly in 2004 through acquisitions, most recently with its purchase of the Robinson Crusoe Salmon Company. AquaChile expects to see an 18.3% increase in production this year; last year the company grossed 600 million US dollars. The Santiago Times