No breaks for Chile: AquaChile CEO steps down, ISA virus confirmed, algae blooms again, workers strike

Published on
May 6, 2016

Still reeling from the aftereffects of an algal bloom that wiped out more than 100,000 tons of farmed salmon, Chile’s aquaculture industry is facing a new set of challenges that have already toppled the CEO of one major player in the business.

AquaChile CEO Torben Petersen resigned on 28 April, according to a filing with Chile’s Superintendencia de Valores y Seguros, or Securities and Insurance Agency. Petersen had headed AquaChile, Chile’s largest salmon farming company, since 2014. AquaChile has posted hundreds of millions in losses over the past year due to the algae bloom and laid off hundreds of employees in April. According to the filing document, Petersen resigned for personal reasons and his last day as CEO was 4 May, though he will remain with the company as head of Salmones Chaicas, which is involved in biotech research on Atlantic salmon genetics.

Petersen has been replaced as CEO by Agustín Ugalde Preuss, who has worked for AquaChile for seven years, most recently as manager of operations. Preuss will have to navigate the company through at least one new potential crisis, as last week regulatory agency SernaPesca confirmed AquaChile’s 25 April finding of infectious salmon anemia virus in one of its farms in the Aysen region of southern Chile.

According to Sernapesca, the disease was detected before it became an outbreak and no signs of infection have been found in other fish. As a precaution, all of the salmon in the cage in which the disease was discovered have been harvested and the entire transit center will be monitored weekly to ensure the highly contagious disease doesn’t spread.

In addition to ISA, Chile is also confronting a new algal bloom affecting the country’s clams and mussels fisheries. Sernapesca Director José Miguel Burgos said on 29 April that the fast-moving red tide was mainly affecting the Los Lagos region – the same region hit by the previous round of algal bloom in February and March. Burgos called the reappearance of the red tide an “emergency” and “an unusually intense phenomenon.” Burgos said his agency opened a new laboratory and hired 50 samplers and analysts to perform testing and evaluation of possibly contaminated seafood, and as increased its testing, including continuous monitoring of all wellboats – or transport boats – used to move fish from farms to processing sites.

“We have launched a vast monitoring system with two basic components: the measurement of the amount of phytoplankton in the water and the levels of toxicity in (seafood) products. This mixed system provides information on oceanographic conditions, which has a good correlation with the subsequent presence of toxins in shellfish,” he said. “Therefore from the point of view of risk, it is a useful tool for decision-making.”

Leonardo Guzmán, a red tide specialist and the chief of investigations at the Aquaculture Fisheries Development Institute, said the February bloom and the current red tide are considered separate events but are both related to this year’s unusually powerful El Niño, which has warmed the seas off the Chilean coast to temperatures amenable to the microalgae responsible for the blooms.

Chile’s salmon industry is also facing a workers strike that has paralyzed business operations on the island of Chiloé and in Puerto Montt, the locations of major processing centers. According to Chilean news site Diario Financiero, shipments of salmon from Chiloé, which produces two-thirds of the Country’s salmon for export, have been held up by the protestors since 3 May.

The striking workers are demanding higher reimbursements from the government for the loss of income caused by the algae bloom. The government has offered compensation of CLP 100,000 (USD 150, EUR 132) to each of the estimated 6,500 fishermen affected by the red tide, but workers have called that amount insufficient, according to the Guardian.

Chile’s Economía y Negocios reported the strike is costing the industry USD 9 million (EUR 7.9 million) per day and quoted SalmonChile President Felipe Sandoval as saying the reputational cost to Chile would be much higher if the strike interfered with contracted deliveries to the United States.

“When you don’t supply the markets continuously, there are repercussions,” he said. “In this case, it is affecting us because we are not exporting much of the fresh product that was intended for the U.S.”

A Financial Times estimate of the financial damage caused by the algal blooms that have hit Chile this year puts total losses between USD 500 million and 1 billion (EUR 438 million and 877 million).

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