Eduardo Goycoolea recounts New World Currents endgame

Published on
November 28, 2022
Former New World Currents Executive Director Eduardo Goycoolea

China's zero-COVID policy caused its imports of Chilean salmon to plummet, and indirectly led to the downfall of New World Currents, a joint venture formed between five Chilean salmon firms jointly targeting the Chinese market.

New World Currents was founded in 2013 to enable Australis, Blumar, Camanchaca, Yadran, and Marine Farm to work jointly to market salmon in the world's most-populous country. But when the COVID pandemic hit China in 2019 the government responded with heightened COVID inspection protocols. In mid-2020, Chilean salmon exports crashed after health authorities found the virus on fish chopping boards in Beijing’s Xinfadi seafood market, which was initially blamed by Chinese authorities on the virus piggybacking into the country on imported salmon.

According to former New World Currents Executive Director Eduardo Goycoolea, at its apex, the joint venture sold over USD 100 million (EUR 96.8 million) of salmon annually in China, accounting for one out of every 10 salmon consumed in China. But the COVID-10 pandemic caused extreme disruption to trade, with the number of commercial flights declining and health authorities stepping up inspections or blocking entry of products into the country over fears of COVID transmission. In some cases, Chinese clients refused to receive the shipments they had ordered, Goycoolea said.

“With this level of uncertainty, the industry wouldn’t take the risk of sending product there,” Goycoolea told SeafoodSource. “Production began to be redistributed to other countries, with each company doing it separately, and when the rest of the world – the U.S., Europe, Brazil – was reactivated in terms of people returning to restaurants, China continued with rigid control, demanding that the plants be certified at origin to prove they didn’t have COVID. The producers began to get tired. When you have an organization that sells little, you still have fixed costs. Despite the fact we made it more efficient with minimum staff in China, the fixed costs were still there and the producers didn’t see the value in it.”

Before working to bring Chilean salmon to China, Goycoolea was the sales and marketing director for El Golf, and then Blumar, for more than 20 years. He is a founder of the nonprofit IFFO, The Marine Ingredients Organization, serving as co-president during its first year of existence and as president in 2018 and 2019. He has also worked with Exapesca, a Chilean fish oil producers joint venture, and represented the Global Salmon Initiative (GSI) in the Aquaculture Stewardship Council Steering Committee, which developed ASC's aquafeed standard. And he served on the board of the aquafeed certification program MarinTrust.

The Chinese market remains challenging for Chilean salmon exporters, Goycoolea said. Restaurants, where most salmon had been consumed in China pre-COVID, have mostly remained closed in China and demand from foodservice companies has dropped significantly.

But the pandemic wasn't the only reason for the downfall of New World Currents. The organization faced internal issues after Chilean farmer Australis was bought by the Chinese conglomerate Joyvio in 2019 and backed out of the joint venture in favor of using Joyvio's own distribution network. In April 2020, Camanchaca made the strategic decision to withdraw from NWC in favor of operating independently with its own brand.

“We had sufficient critical mass to continue, but during the COVID pandemic, the Chinese treated the salmon sector very poorly. They found COVID in the fresh fish, in the boxes of frozen fish, they put us in quarantine. Doing that to fresh fish, stopping you and holding the product up for three to four days while they run tests reduced the shelf-life of the product significantly,” Goycoolea said.

By the end of 2021, the remaining NWC members decided to wrap up the joint venture and leave China.

“I think this decision was understandable but mistaken, and I told them that,” Goycoolea said. “China will be consuming a lot of salmon, and you have to be there, and NWC had done a wonderful job of getting set up in the country. It’s very difficult to get businessmen [competing in other markets] working together, with joint production and all.”

Now Norway, Chile’s biggest competitor in the salmon market, will have an advantage in China, Goycoolea said.

“The Norwegians have gained more space there because they have the advantage of direct flights," he said. "Chileans need two flights to get to China.”

Chile's salmon industry has long targeted China as a primary market of interest for expanding and diversifying its exports. But according to the Q3 2022 trade figures from Chile’s Salmon Council, Chile exported USD 73 million (EUR 70.7 million) of salmon to China, a tiny slice of Chile's overall salmon export value of USD 1.5 billion (EUR 1.45 billion). During the quarter, Chile exported 9,535 metric tons (MT) of salmonids to China, just 5.8 percent of its total salmon exports of 164,730 MT. 

China should once again be in Chile's crosshairs once it begins to relax its zero-COVID policy, according to Goycoolea. 

“Since China’s president [Xi Jinping] was recently reelected for another five years, he will probably begin to loosen up restrictions,” he said. “Chinese authorities can now rest a bit easier in that there is no more political risk with the reelection of the president. And it’s been proven that the zero-COVID policy doesn’t make much sense and it’s not feasible. We’re going to have to learn to live with [COVID] for another 20 years. So I think they will start to loosen the restrictions and I think Chilean salmon will have a significant market in another two to three years.”

In the meantime, Chile has an advantage to the U.S. and Brazil and the country should do everything it can to maximize that edge, Goycoolea said.

Photo courtesy of Eduardo Goycoolea

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