EMPRESAS AQUACHILE S.A. Corporate Presentation 2013
AQUACHILE
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INDEX 01 Overview
Pág. 03
02 About AquaChile
Pág. 09
03 Industry Performance & New Regulation
Pág. 28
04 Sustainability and Stakeholders
Pág. 36
05 New Developments
Pág. 40
AQUACHILE
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01
Overview
AQUACHILE
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Empresas AquaChile at a glance.
AquaChile is a Chilean company that produces and commercializes Atlantic Salmon, Pacific Salmon, Sea Trout and Tilapia.
It owns inland farms in Costa Rica and the only three farming licenses granted in the Bayano Lake in Panama to produce Tilapia. It has more than
It has operations in Chile, Costa Rica, Panama and a commercial office in the United States.
30 230 customers in countries.
It is the largest producer in Chile of Salmon and Sea Trout. It owns 150 sea licenses which provide a solid basis for its growth.
Source: Infotrade
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Empresas AquaChile at a glance. Chilean Salmon Companies by Market Cap (MUSD)*
Public since
578 283
May 19th, 2011
281
163
143
34
Market capitalization of
USD 578 millions as of October 30, 2013 Main Shareholders:
Puchi and Fischer Families
Source: Bloomberg
Shareholder’s Structure** Puchi Family 33,03%
Pension Funds 4,53% Others 33,95% Others 29,41%
Fischer Family 33,03%
Source: The Company
*As of October 30, 2013 ** As of September 30, 2013
AQUACHILE
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2012 Main Chilean Salmon and Sea Trout Exporters (Th. Net Tons)
Volume
Market Share
51.027 46.604
32.101
10,4% 9,5%
31.200
30.448 26.993 24.190
6,6%
6,4%
6,2%
5,5%
20.335
19.122
4,2%
3,9%
5,0%
Source: Infotrade Dic-12
AQUACHILE
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25 years of succesful track record.
Annual Sales InBeginnings MUSD
• 25 years of history • Merger with Salmones Pacífico Sur • Track record forming strategic alliances • Sustained growth
2006 – 2007 Period
• 3rd largest world producer • Global presence and reputation • IPO and acquisition plans
Crisis
Today
• ISA virus effects • Financial restructuring • New legal framework focused in long term sustainability • Advantages of diversification
• • • •
Diversified business model Vertical integration High growth potential Industry consolidation capacity
Revenues In MUSD
410
2012 Source: The Company AQUACHILE
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Focus in diversification for success. % of Consolidated Sales (US$ )
19%
Sea Trout
36%
20%
Tilapia
Geographic Diversification
17% X and XI Region
Pacific Salmon
Atlantic Salmon
% of Consolidated Sales (tons)
31% X and XI Region
16% X and XI Region
25%
15% Bayano Lake
Guanacaste
Source: The Company as of December 31, 2012 AQUACHILE
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02
AquaChile
AQUACHILE
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AquaChile: Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation
AQUACHILE
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Sea water: Unique, diversified and large license portfolio.
One of the largest sea licenses base and the largest presence within sanitary areas in the Chilean industry.
150* Sea licenses distributed in
29 Sanitary Areas -Geographic distribution -Organic growth capacity -Operational and productive continuity -Continuous supply to clients -Species diversification -Natural, climate and sanitary risk diversification * Include 7 brackish water licenses AQUACHILE
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Sea water: Unique, diversified and large license portfolio.
Los Lagos Region
Geographical diversification in sea licenses for Salmon and Sea Trout production.
INDUSTRY Total of 24 sanitary areas AQUACHILE 55 sea licenses in 12 sanitary areas
50% of sanitary areas of the Los Lagos Region
Aysen Region INDUSTRY Total of 34 sanitary areas AQUACHILE 95 sea licenses and 17 sanitary areas
50% of sanitary areas of the Aysen Region
Sea licenses
Sanitary areas AQUACHILE
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Tilapia Costa Rica & Panama: Large water volume and favorable climate. Costa Rica
Geographical diversification in Tilapia production
-Strategic access to large volumes of high-quality water Guanacaste
Costa Rica
-Optimal location for logistics
Bayano Lake
-21,000 tons WFE capacity
Panama
Panama -The Company has the only three tilapia farming licenses granted in the Bayano Lake -Potential to produce over 20,000 ton WFE
AQUACHILE
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AquaChile: Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation
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Fresh water: Flexibility and excess installed capacity.
Geographical diversification in fresh water.
24*
hatcheries from the IXth Region to the XIth Region, including 1 hatchery near Santiago.
14** fresh water farming licenses in the Xth and XIth Regions for Sea Trout and Coho smoltification.
1
River licenses in the XVth Regions for Atlantic Salmon smoltification.
7
brackish water licenses in the XIth Region for Coho smoltification. * Seven of them are rented under long term contract ** Two of them are rented under long term contract
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AquaChile: Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation
AQUACHILE
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Processing: Installed capacity to absorb growth. 7 plants with a total capacity of 190,000 WFE tons, including one of the largest plant in the World Current production capacity of AquaChile’s processing plants In thousands of WFE tons
50,0
34,4
36,7
26,0 21,6
Cardonal
Cailín
Hueñocoihue
Plant Type
Value Added
Whole Salmon
PAC-HACCP Certification
Yes Puerto Montt
Location
21,0
Antarfood
Calbuco
Costa Rica
Whole Salmon
Value Added
Value Added
Value Added
Yes
Yes
Yes
Yes
Yes
Quellón
Dalcahue
Chonchi
Calbuco
Guanacaste Source: The Company
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Processing: Installed capacity to absorb growth. Chile
Costa Rica
Diversity of Salmon Products
Diversity of Tilapia Products
Whole
Trim D
HG
Trim C
Trim E
Portions
Fillets
Whole
Breaded Fillets
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AquaChile: Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation
AQUACHILE
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Vertical integration troughout the value chain. INTEGRATION
AquaChile is vertically integrated in the Salmon and Tilapia business. The Company adds value to all of its productive chain, from genetics up to commercialization.
SALMON AND SEA TROUT
FRESH WATER Eggs & Smolts
SEA WATER Farming
GENETICS
PROCESSING
COMMERCIALIZATION
PROCESSING
COMMERCIALIZATION
FEED
TILAPIA
FRY PRODUCTION
GENETICS
FARMING
FEED* FEED
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Genetics: 15 years of succesfull and proven genetic development. Aquainnovo: Created to be a world class center for genetic improvement in aquaculture Increase in harvest weight of the Pacific Salmon In WFE kg
AquaChile 99,88%
∆+40%
Universidad de Chile 0,12% Source: The Company
Improvement in Tilapia conversion factor of ACI Group
Reduction in the Tilapia’s on growing cycle In number of days
Δ-36%
Δ-21%
Source: The Company
Source: The Company AQUACHILE
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Genetics: 15 years of succesfull and proven genetic development. Genetics in Salmon and Sea Trout
Genetics in Tilapia
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Fish feed plant: State of the art assets to feed our fish.
Joint venture with Biomar in Chile, one of the world’s leading suppliers of high performance fish feed.
126,000 tons of installed capacity.
Modular design allows the company to double its output capacity.
AQUACHILE
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AquaChile: Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation
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Commercialization: Global presence and reputation. AquaChile has over 230 clients in more than 30 countries in the five continents We have more than 19 years of experience in Asia and over 20 years in the fresh salmon market Destination of AquaChile’s main Salmon, Sea Trout and Tilapia sales In net tons
6.870
268
274
146
84
5.563 6.709
127
127
157
54
1.505 32
Tilapia
16.577 3.690
2.018 1.230
810 793
21 78
, 1.859
132
127 23 1.012
Salmon
867 2.094
Operations Salmon and Sea Trout sales 2012 (net tons) Tilapia Sales 2012 (net tons)
Source: The Company AQUACHILE
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AquaChile Inc: Servicing the United States from Miami.
Experienced customer service Reliability and commitment We deliver!
The only Salmon & Tilapia company with operations inside Miami International Airport Improved cold chain Less handling involved
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Our brands and our main clients.
Renowned Brands
Reputable Clients
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03
Industry Performance & New Regulation AQUACHILE
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Chilean industry Productivity performance Significant mortality reduction in the industry since 2009 Sea lice level increasing according to the increase in the industry biomass Monthly mortality rates (%)
Sea lice monthly monitoring 2007-2013 (Number of sea lice per fish)
20%
70 60
15%
50 40
10%
30 20 1,65% 1,20% 0,70%
ago-08 dic-08 abr-09 ago-09 dic-09 abr-10 ago-10 dic-10 abr-11 ago-11 dic-11 abr-12 ago-12 dic-12 abr-13 ago-13
0%
Pacific Salmon
Atlantic Salmon
Sea Trout
10
7,4 5,9 0,6
0 mar-07 jul-07 nov-07 mar-08 jul-08 nov-08 mar-09 jul-09 nov-09 mar-10 jul-10 nov-10 mar-11 jul-11 nov-11 mar-12 jul-12 nov-12 mar-13 jul-13
5%
Pacific Salmon
Atlantic Salmon
Sea Trout
Source: Aquabench, Sernapesca
Source: Aquabench
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Origin of the sanitary crisis: Sea lice monthly monitoring (Number of sea lice per fish) Sea lice Crisis 80
Ova imports with no restrictions.
60 40
Non-existence of biosecurity standards. Low-quality Smolts. Inadequate regulation. Excessive densities. Non-interrupted cycles, with no fallowing.
Consequences
20 0 mar-07
ago-07
Pacific Salmon
ene-08 Atlantic Salmon
Sea Trout Monthly mortality rates (%) ISAv Crisis
Deficient coordination among production sites.
20%
Low usage and low quality vaccines.
15% 10% 5% 0% mar-08
ago-08
Pacific Salmon Sea Trout AQUACHILE
ene-09
jun-09
Atlantic Salmon Pรกg. Nยบ30
New regulations Structural Changes in the Industry: Controlling Risk Fresh water
AS ST PS
Sea water
AS ST PS
Restrictions and new sanitary protocols on egg imports and hatchery use
✓✓ ✓
Sanitary areas
✓✓ ✓
Operating and fallowing schedules in sanitary areas
✓✓ ✓
Macrozone definition: 4 in the Xth Region and 3 in the XIth Region
✓✓ ✓
Corridors definition between macrozones (5 miles)
✓✓ ✓
Minimum distance between licenses (1.2-1.7 miles) and sanitary areas (3.5 miles)
✓✓ ✓
Re-location of licenses located in corridors
✓✓ ✓
New licenses granted for 25 years with the option to be renewed
✓✓ ✓
Sanitary zoning for diseases
✓✓ ✓
Strengthening of control powers (biomass stamping out in case of disease) and forfeiture conditions of the farming licenses
✓✓ ✓
Establishment of specific sanitary programs for ISA, Sea Lice and SRS
✓✓ ✓
Individual Screening of Broodstock
Affluent and effluent treatment
Land based hatcheries
Safe mortality disposal
✓✓ ✓ ✓✓ ✓ ✓ ✓✓ ✓
Standardization and validation of diagnostic laboratories
✓✓ ✓
Smolts: ISA free certification before transferring to the sea
✓✓ ✓
Safeguards and optimization of freshwater production
✓✓ ✓
Clear and strong disinfection protocols
✓✓ ✓
AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE
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New regulations Structural Changes in the Industry: Controlling Risk Sea water (Cont..)
AS
ST
PS
Improved adherence of legal framework regarding sanitary and environmental issues
✓
✓
✓
Coordinated programs for sea lice control
✓
✓
Safe mortality disposal
✓
✓
✓
No fish movements between marine sites
✓
✓
✓
Restrictions and new sanitary protocols for wellboats
✓
✓
✓
Application of maximum farming densities in the sanitary areas
✓
✓
✓
Standardization and validation of diagnostic laboratories
✓
✓
✓
Re-location allowed in the XIth Region
✓
✓
✓
License application suspended in the Xth and XIth Region until 2015
✓
✓
✓
Penalties increase (penalty equal to economic value of biomass)
✓
✓
✓
Increase in patents: more resources for research
✓
✓
✓
AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE
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New regulations Structural Changes in the Industry: Controlling Risk
Final steps on the legal framework : pending final decree
AS
ST
PS
Flexibility in the fallowing period of licenses • Extended fallowing periods without expiring dates • Licenses located in corridors allowed to stand by without expiring
✓
✓
✓
Density restriction per license Biosafety qualification regarding mortality records from the last productive cycle • Low mortality: maximum allowed density • High mortality: stocking restrictions
✓
✓
✓
✓
✓
✓
Density restriction per sanitary area • The sanitary area density will determine the maximum number of fish to stock in each pen, except those licenses with low mortality performance during the last productive cycle (less than 15%) • The density will be determined by: • Environmental performance (10%): Number of licenses presenting aerobic conditions at the end of the productive cycle • Sanitary performance (65%): Total mortality within the last period • Productivity performance (25%): Stocking intention in the sanitary area compared with the optimal stocking • Optimal stocking in the sanitary area depends of the mortality in the last productive cycle. • Low mortality: optimal stocking increase in 16% • High mortality: optimal stocking decrease 24% AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE
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New regulations Structural Changes in the Industry: Controlling Risk Density restriction per License
Mortality
Biosecurity Level
Next Cycle Smolt stocking
] 0% ; 15% ]
High
Maximum allowed density
] 15% ; 18% ]
Medium High
10% smolt stocking reduction
] 18% ; 22% ]
Medium
20% smolt stocking reduction
] 22% ; 26% ]
Low 1
40% smolt stocking reduction
> 26%
Low 2
60% smolt stocking reduction
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New regulations Structural Changes in the Industry: Controlling Risk Density restriction per Sanitary Area* Environmental Performance: Weight
10%
Rank (%)
Score
]75,100]
100
]50;75]
75
]25;50]
50
[0;25]
25
Score
Biosecurity Level High
Atlantic Salmon: Sea Trout: Pacific Salmon:
17 kg / m3 12 kg / m3 12 kg / m3
Medium
Atlantic Salmon: Sea Trout: Pacific Salmon:
15 kg / m3 11 kg / m3 11 kg / m3
Low 1
Atlantic Salmon: Sea Trout: Pacific Salmon:
13 kg / m3 10 kg / m3 10 kg / m3
Low 2
Atlantic Salmon: Sea Trout: Pacific Salmon:
11 kg / m3 8 kg / m3 8 kg / m3
Sanitary Performance: ] 85 ; 100 ] Weight
Rank (%)
Score
[0%,15%[
100
[15%;17%[
75
[17%;20%[
50
>20%
25
] 64 ; 85 ]
65%
] 43 ; 64 ]
Productive Performance: Weight
Rank (%)
Score
[0%,100%[
100
[100%;110%[
75
[110%;120%[
50
>120%
25
] 0 ; 43 ]
Permitted Pen Density
25%
* Apply for licenses with more than 15% mortality in the last cycle AQUACHILE
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New regulations Structural Changes in the Industry: Controlling Risk
Final steps on the legal framework : pending final decree Smoltification in lakes, rivers and brackish water • Minimum distance between smoltification sites and on growing sites / gathering sites / docks for aquaculture operations (3 miles) • Smoltification area must be located in disease free area from list # 2 with specific sanitary control program • However Sea Trout and Pacific Salmon smoltification area can be located in surveillance area from list # 2 with sanitary control program for 3 years
AQUACHILE
AS
ST
PS
✓
✓
✓
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04
Sustainability and Stakeholders AQUACHILE
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We are committed to our employees, our clients and the environment. -More than
5,100 employees in Chile, Costa Rica, Panama & United States OUR LABOR AND ENVIROMENTAL STANDARDS
-Benefits above legal requirements -On the job training -Costa Rica: ISO 14001:2004, OHSAS 18001:2007 and BAP for Global Aquaculture Alliance, the most demanding at present -Chile: Global GAP certification in progress -Social Responsibility Report available (www.aquachile.com/sustainability)
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We are committed to our employees, our clients and the environment.
-To produce quality, healthy and safe food
-To act in a proactive and respectful way towards the environment OUR CORPORATE SOCIAL RESPONSIBILITY PRINCIPLES
-To develop in a safe and healthy work environment -To benefit the communities and suppliers in the places where the company operates
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We are committed to our employees, our clients and the environment.
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05
New Developments
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Disease free eggs recirculation hatchery: Chaicas.
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State of the art research facility: Lenca.
AQUACHILE
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Harmoniously raised fish www.verlasso.com
Alejandro
Cristian
Verlasso salmon
Verlasso farms
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Fish feed in Costa Rica: association with Biomar.
AQUACHILE
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Pet food flavoring plant: association with SPF.
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obligation to publicly update any such statements in the
Note on forward-looking statements
presence of new information, future events or otherwise. This report includes forward-looking statements. These may include words like “anticipates”, “estimates”, “expects”,
This document purports to deliver general information on
“projects”,
other
Empresas AquaChile S.A. Under no circumstance does it
comparable expressions. Forward-looking statements do not
constitute an exhaustive analysis of the financial, productive,
represent past events, including statements on the beliefs
commercial and health situation of the company, and
and expectations of the company. These statements are
therefore any consideration on the advisability of acquiring
based on current plans, estimates and projections, and
or selling securities of the company would require the
therefore cannot be overrated. Forward-looking statements
interested party to conduct an independent analysis.
entail certain risks and uncertainties. The company notes
In
that a significant number of factors could result in current
AquaChile S.A. has sent its financial statements and notes to
results to differ materially from those contained in any
the Securities and Insurance Commission, which are
forward-looking statement. These factors and uncertainties
available for consultation and analysis on its webpage at
include in particular those described in the document that
www.svs.cl and also at www.aquachile.com.
“intends”,
“plans”,
“believes”
or
accordance
with
applicable
standards,
Empresas
the company submitted to the Chilean Securities and Insurance Commission (SVS), section on Risk Factors. Forward-looking statements are related only to the date when they are made and the company assumes no
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