Inside Camanchaca’s plans to double production, boost profitability
Following a successful year fueled by popular new product offerings, Compania Pesquera Camanchaca S.A. is hoping to generate at least USD 50 million (EUR 41 million) from an initial public offering on Norway’s Oslo Stock Exchange for its subsidiary, Salmones Camanchaca.
The Santiago, Chile-based firm, which has a large vertically integrated salmon aquaculture operation and wild-catch fishing operations for a number of species, announced the IPO last fall, saying at the time the cash influx would finance Salmones Camanchaca’s organic growth opportunities. The company recently updated the status of its IPO, reporting it expected to be finalized in the first half of 2018.
“It will bring a lot of capital and help us with our debt, and put us in an even stronger position,” Cesar Lago, president of Camanchaca’s U.S. operations, told SeafoodSource.
Lago, who was promoted to president of the supplier’s U.S. operations in April, said the infusion of capital from the IPO on the world’s largest seafood exchange will allow Camanchaca to double production in the next two years or so. As a result, Camanchaca is expected to go from producing around 70,000 metric tons of Atlantic salmon in the 2016-2017 season to around 120,000 metric tons for the 2020-2021 season.
The company has also made changes to its board of directors, adding two veterans of the industry. In November, Felipe Sandoval, former president of SalmonChile, joined the company’s board of directors. Tore Valerhaug, former financial director of Norway’s Cermaq Group, was also named to Camanchaca’s board of directors in November.
Camanchaca is well-positioned for continued growth in the Chilean farmed salmon industry, Lago said, because the company owns more than 90 concessions (farm sites where it can raise salmon), while many rival suppliers don’t have the access to additional concessions. Plus, the supplier modernized its processing capabilities around four years ago, so it can handle up to 100,000 metric tons of salmon annually, Lago said.
A previous investment in the Chilean salmon supplier last fall, when DNB Bank and Rabobank extended it USD 165 million (EUR 134 million) in new loans, allowed the company to grow its Chilean salmon business and expand into other species, as well as pay off debt.
The new funds have also helped Camanchaca debut new retail and foodservice products, which in turn is leading a boost in the company’s profitability. At last year’s Seafood Expo North America in Boston, Massachusetts, the company introduced wild Argentine red shrimp, which has been a very successful product for the company. As a result, in 2018, it is rolling out frozen, packaged Pier 33 Gourmet wild Argentine red shrimp to retail and foodservice buyers. The raw, peeled and deveined, tail-off shrimp is sold in both one-pound and two-pound bags.
“[Wild] Argentine shrimp is still very new into the U.S. market, compared to the farmed [vannamei] shrimp,” Lago said. As a result, Camanchaca’s sales representatives are spending a lot of time introducing the shrimp to independent restaurants.
“They have to knock on each restaurant’s door and talk to the manager. It’s a process, but the feedback is fabulous,” Lago said.
Retailers can either sell the Argentine red shrimp frozen, or refresh it for their fresh seafood counters, Lago said.
Despite its recent introduction into the U.S. market, Argentine red shrimp have caught on quickly, to the point where they are now featured on the menus of many major restaurant chains including Red Lobster, and at large U.S. grocery chains such as Publix Super Markets.
As a result of its growing popularity – along with the rising cost of the raw material – Lago expects Argentine red shrimp prices to rise between 10 and 20 percent this year.
The supplier is also adding two frozen, portioned, value-added salmon items: Blackened Salmon and Bourbon Glazed Salmon. Each 12-ounce package contains two salmon portions. Camanchaca is talking with major U.S. grocery chains about carrying the new seasoned, marinated salmon products, while it is primarily focusing on U.S. restaurants for its Argentine red shrimp. Lago said he expects the new Pier 33 value-added salmon products to sell well in grocery stores.
“We have gotten several acceptances already,” Lago said.
Lago said Camanchaca introduced the new products because it saw a need for more frozen value-added meals with strong and interesting flavor profiles.
“The trend at retail is that both the husband and wife work, and have less time to prepare a meal. They are looking for convenience,” Lago said. “However, a lot of frozen products don’t taste that good, so we developed value-added meals that are really good quality and great flavor.”