Fashion
In 2014, the venture already exceeded the expectations of its partner companies. The JV’s sales volume target for the year was originally 2,000 metric tons, but it had already hit 3,000t as of Nov. 6 last year.
So far this year, the company has sold about 5,000t of salmon to China, of which 70% was frozen and 30% fresh, Eduardo Goycoolea, executive director of the New World Currents venture told Undercurrent News.
“We have increased our sales 40% year-on-year already and we’ll keep growing in China. Chilean salmon has become an attractive alternative after the conflict between Norway and China,” Goycoolea said.
Norway’s salmon exports to China have been fraught with difficulties since the 2010 Nobel peace prize. In March this year China delivered another blow to Norwegian producers: it announced it would ban all imports of whole head-on salmon from three Norwegian counties — Nordland, Troms and Trondelag.
Although China and Norway agreed on a new certificate formula that meant exports of salmon to China could be maintained a month later, Chile has benefited from Norway’s difficulties for trade into the Asian country.
“Fresh salmon account for 30% of our total sales volumes to China, and we want to send more fresh product as we are working to improve our logistics for air freight shipments,” Goycoolea said.
New World Currents has done freight shipments from Chiloe once per week, but due to higher demand of fresh salmon from China, the JV has began to send salmon through additional flights out of Buenos Aires, Argentina, from October 1.
The venture is also looking to export more value-added products in China’s retail segment, Goycoolea said.
The commitment of the venture with China’s market is clear, as it has already two sales offices in the country, one in Shanghai and another Shenzhen. By the end of November, the JV plans to open a third sales office in Qingdao, Goycoolea said.
“By the next three years we want to sell about 10,000t to China, as consumption in this country is growing,” he said.
Despite salmon falling prices, China is a “very interesting market”, as it consumes the largest sizes, which are more profitable as they have higher prices.
New World Currents represent about 25% of salmon production in Chile, and it is having requests from other Chilean companies to join the venture, although it wants first to consolidate its brand and ties with local distributors before expanding, Goycoolea said.
China’s growth potential
Chile’s salmon farmers aim to double sales to China within the next five years, taking advantage of its potential market growth.
The Chinese market for salmon has significant prospects for growth not only because the country has more than 1.3 billion population, but also because salmon consumption is still low, leaving space for further market penetration.
In 2014, Chilean salmon exports to China totaled $147 million, which was up by 4.18% year-on-year. China, however, represents just 3.37% of total salmon exports from Chile.
Chilean salmon companies export to more than 65 markets, but just three countries — the US, Japan and Brazil — account for 68.2% of total exports.
