As of 7 April, Cermaq Chile has decided to close two of its salmon processing plants located on southern Chile’s Chiloé Island in the Los Lagos Region (X Region).
The closing of the Ancud and Dalcahue plants is "mainly due to the various legal modifications that have been adopted in the country in recent years, [and as a result] Cermaq has lowered the volume of production significantly in the X and XI regions," according to a release from the company.
As such, Cermaq is looking to adjust its processing capacity in the X Region, in accordance with the company’s actual production and responding to projections for the coming years, while also streamlining its operational structure “that will allow us to maintain the operation of the company over time.”
“In the last year, Cermaq has used less than 60 percent of its processing capacity and it is not expected that the regulatory framework will change in the future, so we do not see it possible to recover previous production levels in the medium-term, which forces us to make this adjustment,” it added.
According to local paper Diario Financiero, the company’s decision was brought on by legal modifications implemented in Chile in 2016, under the salmon farming reduction program (PRS, according to the initials in Spanish). In years prior to that, high industry growth brought health and environmental issues, and the PRS program looked to regulate salmon farming expansion.
In Cermaq’s case, growth plans were drawn up prior to the regulatory changes being implemented, which ultimately prevented the company from developing as expected, the paper quoted industry sources as saying.
“Changes in regulations for the salmon industry have made it more costly and difficult to produce higher volumes. There have been many changes ... in our case, production has decreased in the last two years due to changes in the sites where we operate,” General Manager Steven Rafferty said in a letter sent to Cermaq employees.
Cermaq Chile has four plants in the X Region, three of which were located on Chiloé: Quemchi, Ancud, and Dalcahue, with the fourth located in Chinquihue, near the city of Puerto Montt. Total processing capacity for the four plants is 120,000 metric tons (MT) a year. With the closure of the two plants, capacity will be reduced to 80,000 MT, “which is sufficient for production volume,” according to Rafferty.
The company did not refer to the current COVID-19 pandemic that is affecting Chile’s salmon sector. Given its citing of issues during the past two years, it would appear that the crisis did not come largely into play in Cermaq’s decision to close the plants.
However, the fact that the island of Chiloé has been cordoned off to try to prevent the spread of coronavirus – with salmon workers refusing to work, residents blocking trucks from delivering key supplies or transporting salmon from the island, and salmon companies scaling down operations – may have been taken into consideration.
