November 12, 2010

Chile's salmon industry loses US$2 billion due to ISA virus

Chile's salmon industry has incurred losses of around US$2 billion between 2007-2009, due to the Infectious Salmon Anemia (ISA) virus, said José Gago, Vice President of the Association for the Chilean Salmon Industry (SalmonChile).

Gago said, "We have had the Infectious Salmon Anemia (ISA) virus and perhaps we will have a few new isolated cases in the future, because like any disease, it comes and stays."

"All this led to a brutal loss of around US$2 billion between 2007-2009, which is more or less the assets that had been formed in the 25 years that the industry has existed," he said.

Gago, who is also Managing Director of Acuinova Chile and Nova Austral, said, "We do not want subsidies nor money from the state. We want clear and effective regulations, monitoring and sanctions."

Some companies lost 10% of their assets and others are in negative equity, he said. However, the executive noted that the salmon industry and related businesses are recovering.

"We made a radical change in the way of producing salmon in Chile. First, we implemented 44 health measures from SalmonChile. Then there is the issue of the districts, which are areas of greatest health management involving coordination of production between firms. And finally there is the law that provides sanctions," he said.

With regard to the possibility of investing around US$1 billion to restore salmon, Gago said, "I think it is exaggerated. What is missing here is working capital, about US$750 million. Another US$150 million would be for investments in machinery. Companies have many assets left, but with little biomass."

Meanwhile, the National Fisheries Service (Sernapesca) stated that there has been an ISA virus outbreak at a fish farm in the region of Magallanes.

In compliance with biosafety regulations in force, after receiving notification, the owner, Salmon Magallanes, must remove its facilities which presumably contain contaminated fish.

The company will harvest or remove the fish cages if the outbreak declared. In the first case, Salmon Magallanes has a maximum of 15 days, and the second, seven.