PERU fishing with guts to report…
Paradoxes of business. Two years and eight months ago, and Mario Alberto Montanari brothers sold Dionisio Romero, Peru's richest man, the production of fish feed Salmofood. And now is the Lima who runs one of the keys to successful Chileans to declare the tender offer (OPA) on its troubled salmon INVERMAR.
All because Salmofood became the largest provider of food for INVERMAR and in that condition today leads the bank along with the list of major creditors of the firm, whose difficult financial situation forced the Montanari to put it on sale.
In mid-February, Alimar -which is controlled by the fishing businessman Roberto Izquierdo- launched a takeover bid for 100% of the shares of Invermar and, according to the documentation presented to the Superintendency of Securities and Insurance (SVS), the success of the operation is subject to this firm reaching an agreement with its bank creditors and SALMOFOOD, "To regularize the status of the contract to supply food for fish currently in force". The offer has a term of 30 calendar days, which ends on March 19, and besides INVERMAR considers Ostimar, a subsidiary dedicated to the production of oysters.
Know the business say that while INVERMAR negotiations with banks are on track, need to know the reaction of Peruvians. According to market estimates, receivables from Salmofood amount to between $ 27 million and $ 28 million. "It's a major creditor, who must agree to a payment plan. Part of the conditions for Alimar take effect OPA "Says an executive at both the process. "Salmofood Peruvians are sold with a contract for the supply of long-term food INVERTEC. Today they sell them 100%, but in the past INVERMAR had more suppliers, "adds an industry executive.
How are seeing the issue from Peru? Ian Lozano, Manager Salmofood, anticipates that the firm "I look forward to the purchase negotiation of Alimar and Invermar, since we are their balanced feed suppliers, but we have not had any approach to date with Alimar", warns.
When asked about it, the brothers chose Montanari no opinion.
Unica provider
In July 2012, through an essential fact sent to the SVS, INVERMAR reported sales Salmofood Alicorp at $ 62 million. Over the years, the company located in Castro, Chiloe Island (Lakes Region), became the sole provider of this input to the salmon of Montanari.
Today, the production of the firm equals about 8% of the food market for salmonids in Chile, and although at one time its weight was lower -ostentaba about 5% of the torta-, in recent times has remained at around 8% and 10%.
Salmofood is a subsidiary of Alicorp, a true giant food at home and growing presence in Latin America.
The animal nutrition business Alicorp's is led by the VITAPRO subsidiary, which was formed in 2014 and is principally engaged in the production of food for shrimps.
According to the latest unaudited financial statements of the firm, available on the Superintendency of Securities Market Peru, Alicorp turnover in 2014 about US $ 2,100 million approximately. This result strengthens the business consumer, industrial products and animal nutrition. The latter area represents about 20% of total company revenue.
Of all sales of Alicorp in 2014, 8.5% were Chile. Of that, a significant part was due to Salmofood, but also to other products that the company exported to the country as milk, sweets and industrial products.
The Project Director of the rating agency Peruvian Support & Asociados, Elke Braun says that sales of animal nutrition Alicorp grew 45.8% in 2014. "It is worth noting that in Ecuador came to run an animal feed plant in 2013, so we expected a better sales performance", Need Braun.
The Analyst adds that Alicorp's animal nutrition line has been growing in recent years, but that the bulk of this firm's business is still in mass consumption, “And the impact of wheat and soybeans are the most relevant elements. Animal nutrition is doing very well and Ecuador is strong, without diminishing the importance of its presence in Chile, but the drive for business and development came from the demand from the northern country, a market in which Alicorp has been present for several years," holds.
How important is the operation of Chile within the business group? "It is important, because it opened the door to Alicorp in Chile and because the animal nutrition industry is very important for Chile"Delves Elke Braun.
Lizbeth Walqui, research analyst Inteligo SAB, a brokerage Peruvian Stock Exchange, agrees that the operation in Chile has brought good results for Alicorp. "In 2014 I had an important contribution to sales of the company and served as a support to the fall in Argentina, especially through the production of fish feed."
He adds, this continues to gain share of total annual sales of the group, showing expansion of 33% with respect to 2013 and 174.19% compared to 2012. "Although growth has been slowing down, we believe that it will maintain the positive trend in the coming years," Walqui projects.
All in all, Alicorp's profit has fallen in 2013 and 2014 due to the exchange effect, "Since they had as international bond debt in dollars and the currency has been rising"Explains the analyst. Make the biggest impact comes from the exchange rate during 2014 and therefore significant portion of the debt was restructured to replace debt in foreign currency to local currency.
Past experience
Not the first time a food company Fish plays an important role in the process of buying and selling a salmon farming company. "In BioMar we supported the process for companies to get ahead"Says Martin Leon, General Manager of the company.
A second chapter EWOS, the Chilean subsidiary of Norwegian origin of the same name, which is dedicated to the production of food for fish globally wrote. With a 32% market share, has its operations from the Biobío Region south.
The firm was a creditor, with a debt around US $ 30 million, Nova Austral salmon and bought 100% of the company in 2014. With a presence in the Magallanes Region, Nova Austral was Acuinova subsidiary controlled Fishing Chile. At the time the transaction was completed, the group of companies was bankrupt and was controlled by the Spanish Pescanova.
The operation, for $ 183 million, was unprecedented in the salmon industry in Chile, as EWOS entered the salmon farming in the country. The company currently sells more than US $ 500 million a year and is a leader in the industry of feed for salmonids.
For years, EWOS Chile was part of the Cermaq Group, a consortium of Norwegian capital. But in 2013 the company was acquired globally by investment funds English and Nordic Altor and Bain Capital. Today has operations in major producing countries Salmon and Trout: Norway, Canada, Scotland and Chile
In total, the Chilean fish feed market there are six major players, considering both companies sold to third parties such as those that produce to supply their own operations. In the first group are Salmofood, BioMar, EWOS and Skretting, while in the second set Antarctic Salmon (the Japanese group Nissui) and Fjords (AGROSUPER).
With an annual output of 1,200,000 tons of food, sales of this industry in the country around US $ 1,800 million.
This is a business that follows the course of the salmon stream: she pressed after the crisis of ISA virus and then rebounded recovery. "Today there is a strong demand for food explained by the increase in Biomass and the decrease in mortalities", says Andres Tagle, General Manager EWOS.
This has led to a growth in sales in recent times. “The price of feed has increased due to the higher cost of raw materials. We are at the historical top of sale price and volumes. Regarding prices, these should drop over the course of the year,” concludes Tagle.
SOURCE: Aqua.cl
