Company visits in Chile

Noah Gall | February 01, 2023

As an active investment manager in a niche sector, we believe it is essential to visit companies ourselves. Direct contact with management and employees, a deeper understanding of the processes and challenges as well as the inspection of the existing assets help us to make well-founded company analysis and investment decisions. Further, Chile's fish&seafood sector is sparsely covered by analysts. The Bonafide research team therefore undertook a two-week trip through the country at the end of 2022 and visited seven different companies of the Global Fish Fund portfolio. Below are some impressions of the trip through an extremely attractive region.

Cluster concentration

Chile stretches over 4,000 kilometers along the Pacific coast of South America. It is therefore surprising that industrial fishing and salmon farming are concentrated in a few locations. While the wild fishery is mainly located in Concepcion (450 km south of Santiago), Puerto Montt is the center for salmon farming.

The first stop on the trip was Concepcion, whose agglomeration still comprises one million people and thus forms Chile's second most important economic region. With Camanchaca, Blumar and Foodcorp Chile (a subsidiary of the Norwegian Austevoll Seafood), several companies from the Global Fish Fund portfolio are active in this port. We already reported on the wild catch during the trip (see blog). In summary, our view that regulation of catch quotas is working was confirmed, and fishermen also realized that sustainable fishing is financially attractive in the long term. Jack mackerel fish stocks have recovered very well after exploitation around the turn of the millennium, and schools are now swimming much closer to shore again. Fishing boats have to travel shorter distances as a result, saving time and money.

After these positive visits we drove with the rental car through the impressive south of Chile. Passing volcanoes and lakes we finally reached Puerto Montt, the heart of the Chilean salmon industry. In the following pictures we take you along the value chain of salmon farming.