Aug. 27, 1:00 pm PET
The feed sector and the food sector
Pesquera Diamante Commercial Manager Diana Guzman has a passion, but we'll get to that in a minute.
Her first mandate is to represent the sales of, among other products, the massive volumes of fishmeal and oil that Diamante produces each year from its eight dedicated factories.
It's not the easiest job – she has to deal with some very powerful customers including the "Big Three" of Skretting, Ewos and BioMar, as well as fast-moving Chinese traders.
Diamante controls 8.5 percent of the industrial anchovy quota with 35 vessels, and has ridden the rocketing prices up over the past year where they sit now, in wait of the next quota announcement from Peru's ministry of production (likely in October or November).
The fishmeal market is far more complicated to track than just watching the quota, however. The market drivers outside of aquaculture have become a huge factor that sits outside of this industry's radar.
China is perhaps the biggest factor.
Chinese feed traders such as GC Luckmate, Teampower and Coland typically sit on around 120,000 metric tons of inventory, Guzman said, but stockpile volumes in ports during the high aquaculture seasons of May, June and July, and buy more in November to fatten up piglets for the Chinese New Year.
China is the only country that consumes more pork than chicken, Guzman noted, and most daily dishes contain the meat.
Naturally, customers there have been following the El Nino developments and looking to stockpile more again, putting pressure on volumes out of Peru. At the same time, larger aquaculture players continue to demand more and more.
With the market being what it is, only around 30-35 percent of Diamante's feed is on contract.
With the bigger players, volume commitments are made, but on intervals, given that the quota and harvest always has a question mark hanging over it.
Back to Guzman's passion. The executive is spearheading a new project to bring frozen mackerel products to poorer regions in the country by supplying fish and freezer cases to small "tambos," or small regional stores operated by women's groups, and drawing in outlying villagers to purchase products at a bargain seven days a week.
It first began experimenting with the project six to seven months ago with an occasional truck being sent to the areas, but the company has now developed a more regular delivery cycle that brings fish in every 15 days and holds them in small cold stores for distribution.
She's hoping the rest of the Peruvian fishmeal and oil sector will follow suit, noting that over 50 percent of children in the region suffer from malnutrition.
"Can you imagine how much good it would do?" she asked.
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Aug. 27, 12:30 pm PET
Big work, big rewards
I just got schooled on anchovies.
Not the fishmeal kind, but the kind that lies on your pizza, garnishes your salad or gets mixed into your favorite pasta sauce.
Bottled and canned anchovies, simple though they may seem, are incredibly labor-intensive to produce.
Karl Berger Cisneros, head of marketing at iPrisco, walks me through the process.
Sardines are first landed and brought into the factory, of course, then bled for 10 hours before being salted in layers in 55-gallon drums for four to six months (depending on a customer's preference).
After the fish is taken out of the barrel, it's very carefully filleted by some extremely specialized workers, who wrap the fish in cheesecloth and run it through a centrifuge to get out as much liquid as possible.
Then its hand packed into cans and jars, and then, eventually, ends up on our plates.
Salted and cured anchovies are only produced in about four to five countries, and volumes are small.
Thus the significant price point to the end user. Why go to all the trouble?
With an 80-gram bottle going for $0.96 per jar FOB to Callao, the margins are pretty healthy: Go check the price on one the next time you're at the grocery store.
IPrisco posted revenues of around $35 million in 2013, and expects that to reach $45 million in 2014 and $80 million in 2015, with Europe and the United States continuing to be the main markets.
Some key clients include Dittmann in Germany, Wyles in Canada and MW Polar in the United States.
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Aug. 27, 11:30 am PET
A few new markets – just in case
Fresh On Time Seafood, an Indonesia-based processor, makes a pretty clear promise in its name, and now it's hoping it can convince South American customers it can, indeed, provide its seafood on time (but frozen).
The company already has some customers in Panama and Mexico, and international marketing executive Berta Saragih is confident more markets will begin taking her company's products, even though some of the species the company is supplying – such as tuna and squid – are in abundant supply.
"Every country needs importers," Saragih said.
Fresh On Time isn't just looking at South America for growth – it's also a hedge.
"If something goes wrong with the US or Europe we want an option," she said.
Though Fresh On Time's line is diverse, shrimp and crab will be its primary focus.
The company processes in two factories: in Jakarta and Sulawesi. The shrimp is processed in its Jakarta plant, with around 10 containers per month going out primarily to the US market.
Suppliers include Indonesian giant CP Prima, as well as smaller and mid-sized shrimp suppliers.
Business has been tough for shrimp processors of late, Saragih conceded, but long-term relationships have been its salvation.
"We have dedicated suppliers and customers," Saragih said.
"When we tell our customers the challenges we face, they help us. When the situation is reversed, we help them."End users for the company's products include Stavis Seafoods in Boston and Great American Shrimp company in Los Angeles.
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Aug. 27, 11:00 am PET
Made in Peru
Given all the effort put into it, you may have seen the Peruvian Tourism Board's branded logo for the company.
It´s been quite a success.
So getting that stamp slapped on your products is a wonderful way to ride that wave of marketing.
Patricia Matto Lainez Lozada, sales manager at Peruvian shrimp farmer and supplier Atisa, said it took some rigorous audits of quality, working conditions and finances for its products to be able to use the stamp on its Cool! Branded line, but it opened doors for selling the products, and is part of an effort to differentiate Peruvian-farmed shrimp in the commodity shrimp marketplace.
"It definitely helped sales," Lozada said for the floor of the Expoalimentaria in Peru.
Not that they need help. Atisa's 1,000 metric tons of production gets sold out quickly.
Product from its own farms – which span 150 hectares – is sold in both private label and under the Cool! Brand in several countries including France, Spain and Korea.
The brand is developing in Peru as well.
The one challenge Atisa faces is land for farming.
Peru's tight restrictions on shrimp farming means expansion isn't likely in the near-term.
Some companies are farming in land-based operations in Lima, but Lozada is doubtful that will be a very profitable venture. Bottom line is that "we cannot compete on volume," she added.
"We're looking for niche markets."
Beyond the Peru logo, the company is hoping to add the GlobalGAP label to its packaging as well, and is in the process of having its farms audited.
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Aug. 27, 3:00 pm PET
Ruby Red's rosy outlook
One of the curious things about Norway is that, despite being the world´s largest producer of salmon and trout, you can walk into a number of major retailers and find Peruvian farmed trout.
Piscis Sales Director Victor Camacho smiles when he hears this: it's one of his favorite pitches. "It is an important speech for me," he said.
Piscis, one of Peru's largest farmed trout producers, has been able to demonstrate the quality of its products by the caliber of its markets and customers, he noted.
Among its success stories is the development of the Ruby Red trout moniker, which it launched together with partner Clear Springs.
Prior to the product, Americans were reluctant to eat red-fleshed salmon; the companies have been able to change that perception.
The company has expanded to the East Coast of the United States, where he said consumers are more dynamic and willing to try new things.
The company is in the process of designing a new plant, which Camacho expects to be up and running in 18-24 months.
"We have to have our own plant," he said. Currently, the group is contract processing, and while that´s working out fine for the time being, it poses too many risks, and is simply not strategic.
The new plant will have full certification and allow Piscis to maintain full control of quality. And while it may add some efficiencies, the goal of the factory is not to cut down on costs. In fact, he noted, he would be hard pressed to find any workers capable of matching the current crew.
"These ladies are awesome," he said.
Piscis is in the process of expanding is production in Lake Titicaca, where its 15 hectare operation is now, but Camacho said the company sees the eventual limits to its expansion and next wants to move things on-land.
BAP certification for the existing farms is underway, he said. Eventually, the group sees itself setting up contract production, but Camacho said that will be very, very carefully done.
"We want them to produce like us," he said. "We can´t risk our own or Peruvian trout´s reputation."
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Aug. 27, 2:45 pm PET
Joining the Mickey Mouse club
Peruvian value-added processor Umi Foods has a clear promotional advantage. It's enlisted the world´s most famous cartoon character to get Peruvians to eat fish nuggets and other breaded products.
"He´s pretty well known," Director of National Sales Monica Palomino Luza told IntraFish.
Yes, he is pretty well known.
Umi, a subsidiary of the Coinrefri Group, licensed the brand two years ago, and it made Palomino's job a little easier. Since then, Umi has placed Disney branded freezer cases in Peruvian retailers Wong, Vivanda, Totto, Metro, Makro and others.
It's all part of a plan to broaden value-added production and sales in the country -- and do it all at home.
Currently, Umi is simply re-packing imported product at its Callao plant, but Luza said the company wants to add frying and value-added processing line.
But, it's a process, she added.
"First, we are making a market here," she said. "We want to see that it functions."
After that, it´s a matter of purchasing the equipment and getting its factory licensed.
In addition to Mickey and Minnie nuggets, Umi is bags of branded IQF species including pangasius, tilapia and swordfish.
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Aug. 27 2:30 pm PET
Write me a check
Pesquera Santa Lucia suffers from the same problem a lot of us do: a lack of capital.
The small farmed trout producer is fetching 12 soles per kilo for its fish on the Peruvian market, but with feed prices rising -- Nicovita, Aquatech and Purina are key suppliers -- it's hard to make the math work, particularly in a ridiculously fragmented sector.
"We need more volume, and to get more volume, we need more capital," a company spokesperson shrugged.
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Aug. 27 2:20 pm PET
Fingers crossed for good research
Nothing is more closely watched in the Peruvian seafood sector than the anchovy quota, and no other body is as important as Peru's ministry of production, which takes the advice of El Instituto del Mar del Peru (IMARPE) and makes a determination on how much fish can be harvested.
The two IMARPE biologists on hand for the show wouldn't touch the issue with a 10-foot pole when I asked what its current surveys are indicating, but they did tell me that all their research indicates that the anchovy resource is productive, and regenerates quickly.
So the only factoid I can pass on from my time with the biologists is that vessels are close to finishing its most recent tests hauls, after which the data will be analyzed in anticipation of the recommendation.
Factoid No. 2. The two vessels that do the test fishing are named Humbolt and Jose Olaya Balandra.
And the industry basically lives and dies by what they find, so get to know the names.
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Aug. 27, 2:00 pm PET
Moving up the ladder
Peru is a long way from Austevoll's Norway home, and its subsidiary Austral is known for fishmeal and oil, not branded canned fish.
But the company is investing in its Bayovar brand, and looking outside the domestic borders after a long period of being a commodity private label producer, Marketing Coordinator Natalie Campos Mejia told IntraFish.
It's developing new graphics to make to make it more modern and better communicate the offerings, which have been expanded into a range of value-added products such as salads and ready-to-eat meals.
Currently, the brand sits five in the branded canned seafood retail sector, but executives there are certain that will change.
After noting that IntraFish is headquartered in Norway, several executives at the booth wanted to tell me how nice CEO Arne Mogster is.
Those people are going places.
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Aug. 27, 1:15 pm PET
You get what you pay for
Ecuadorian canned fish producer Asiservy has benefited from a European distaste for low-quality canned tuna out of Thailand and the recent hit to its image, according to Karla Moreira, international business executive with the company.
"Before, they were happy with the quality they got: bad product," Moreira said.
Beyond the quality difference of Asiservy's products, buyers who work with them are comfortable with what they see in the factories.
"We don't use children, workers get good pay, and have good conditions," she said.
The company's doing something right: It grew sales from $50 million in 2013 to an estimated $75 million.
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Aug. 27, 12:30 pm PET
Do your homework
It´s pretty clear Diego Balarezo Martinelli is in the right line of work.
His in-depth knowledge of the fishmeal and oil sector is impressive, and an asset to Hayduk, where he works as the sales manager for the company´s fishmeal and oil sales.
Balarezo doesn't sound like a salesperson. He sounds more like a biologist.
The poor fishing last season – with only around 60 percent of the quota captured – was the result of four kelvin waves, which brought 2-3 degree Celsius warmer waters off the coast of Peru, like mini-El Ninos.
These nino Ninos have four potential impacts (or a combination of those impacts), Balarezo notes: the fish swim deeper, making them hard to harvest; they swim nearer to the coast; they go south to where the kelvins meet the Humboldt current; or they move far offshore.
Consensus is that the fish swam both down, and out, since in-shore fishermen also came up short.
Despite all that scientific knowledge, Balarezo does have to sell, though. And the first step in that process is convincing his largest customers – fish feed producers – that the environmental changes are real, and the impact on costs is real.
Plus, demand for the oil sector continues to grow.
Prices there are at around $1,950 per metric ton for feed-grade oil, and $2,600-$2,800 per metric ton for the omega-3 pill market.
Naturally, Hayduk and other customers are investing in equipment that can help them extract more oil, and doing a lot of R&D to figure out better ways to do it.
"They're concerned," Balarezo said of his customers. "They've been trying to reduce the amount of fishmeal and oil in their feed, but we know it´s not possible to reduce it too much.
"With a rumored quota of around 1 million - 1.5 million metric tons, the seafood industry won't see dramatic shifts in the short term, but the relatively high fishmeal costs certainly aren't going to come crashing down.
Since April, prices have risen to $1,900 per metric ton.
While that sounds like a lot, Peruvian companies aren't necessarily raking it in, Balarezo said, particularly when the quotas are low.
"The price differential with the lower quotas doesn't offset the lost volumes," he said. "We are all hoping for higher quotas.
"Back to the ocean science. Balarezo dismisses all the conflicting reports of when the El Nino will arrive and how severe it will be, since there's no way to know exactly what it will be like more than two months away.
When it does come, and if it is severe, the phenomenon will be affecting the anchovy resource for the next two years.
"The only thing we can do is try to lower our fixed costs," Balarezo said. Within the past two years, the company closed a plant in Ilo and Paita as a result of the shortfall in anchoveta raw material.
The Ilo plant is set to reopen with new machines more geared to products for human consumption.
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Aug. 27, 12:15 pm PET
Big in Europe
Spanish-owned Salica reported sales of $219 million from its Ecuadorian operations last year, and exported more canned tuna than any other company in the country.
Didn't know that? Commercial Director Marlon Barchi, speaking from his major company's ironically closet-sized booth, told me the company produces upwards of 55,000 metric tons of tuna, with around 60 percent exported and the rest saying domestic.
The company's private label customers run the gamut, with Lidl being one notable buyer that sprang to mind.
It's only branded product is in Colombia, and the next target is Peru, thus the presence at Expoalimentaria.
In such a commodity business, quality is the point of difference Salica sells on, Barchi said.
Around 60 percent of the company's tuna production is skipjack, 20 percent big eye and 20 percent yellowfin.
The only market pretty much off-limits is the United States, which charges Ecuador a 35 percent duty for fish in oil, and 12.5 percent for fish in water.
Still, Barchi said he gets around 12 containers of "nostaligia" sales from Ecuadorian-Americans every new year.
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Aug. 27, 11:45 am PET
Fish for all
Malnutrition is a problem in Peru, particularly in the higher, mountainous areas of the country.
So the government has launched an initiative to help alleviate the problem by encouraging Peruvians to eat more fish.
The initiative, "A Comer Pescado," ("Let´s eat fish") is using the resources at government-owned ITP to can Peruvian fish such as mackerel in a range of forms and use a brand to sell it into regional markets.
The hope, according to executive coordinator Jose Castillo Sanchez, is that demand will create a positive cycle: demand grows, seafood companies realize an opportunity to produce for the demographic, and more Peruvians are eating Peruvian fish.
"These resources are abundant," Sanchez said. "We´re trying to change things so companies have a different focus.
"The government isn't offering a subsidy for companies that make the investment to direct more of its product to the domestic market, but it´s ready to help with R&D and other input.
"If we invest more in this, we think we can reach a demand of five million cans, and that amount gets very interesting," Sanchez said.
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Aug. 27, 11:45 am PET
Hoping to get lucky
Lucky Union Foods' Watcharakorn Kerdnin is a long way from home. Why? The Thai executive is on a recon mission to see just what the Latin American market might hold for its surimi products.
The company, which produces value-added surimi products in both its Thai and Polish factories, has a couple clients in Brazil, but nothing major.
"They don't really know what it is," Kerdnin said of surimi products.
Lucky Union didn't come into the Expoalimentaria just holding their surimi sticks out; they did market research.
"We studied market prices and found there were good opportunities," Kerdnin said.
Surimi's attractive price points and the increasing awareness of Asian cuisine in South and Latin America are two primary reasons things seemed interesting, he added.
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Aug. 27, 11:15 am PET
More press for paiche
Amazone continues to push paiche in a bid to raise the fish's profile, but Gustavo Sakata, an executive with the company, insists the company isn't so interested in raking in money off of the fish.
Peruvian conglomerate Grupo Hothschild started the company via subsidiary Cementos Pacasmayo in 2006 to raise awareness of the endangered freshwater fish, and provide a potential industry for the far-flung people of the Amazon region.
"They decided getting people to know about the fish was the best way to start saving it," Sakata said.
The company famously landed its products into Whole Foods via Artisan Fish, which shows paiche has commercial potential.
Sakata said the next steps are to improve husbandry practices to make farming paiche more efficient so others can begin to jump into what is a highly capital-intensive endeavor.
"Our company didn't begin as profit-seeking company," he said. "We are doing this to show the best example of how to do it."
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Aug. 27, 10:00 am PET
Shrugging off Russia
Frozen fish harvester and supplier Produmar is using mackerel harvested by its six vessels and processed at its two plants in Paita and Tambo de Mora as means of opening up new markets on the commodity side, and is seeing success with some new areas such as South Africa and Nigeria.
Russia, with all its sudden interest, is not an immediate priority for Produmar.
The company has applied to be in the new group of companies to seek approval from the Russian veterinary administration so it can reach eager buyers, but Produmar Marketing and Sales Assistant Gonzalo Bachmann said the company is keeping its eye more on steady customers such as China.
But more interesting is its work on private label packing.
According to Bachmann, it's become a big focus for the company, particularly in Canada and the United States, where IQF scallops and mahi-mahi from Peru are a big hit for the company at companies such as Makro, Metro and Profand.
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Aug. 26, 20:00 pm PET
Back to Lima
Though the Piura region doesn't suffer from abject poverty, it's clear the region lacks jobs, infrastructure and a slew of general public services.
No doubt the problems are a result of a complex set of factors that a fly-by visitor such as myself couldn't even pretend to understand.
But, I can say that the seafood sector in the region is clearly a critical driver of the economy, with so many major and mid-sized companies and ancillary services operating there.
It's not a whole lot different than hundreds of other rural coastal regions in developing countries, and while seafood can't solve all the world's problems, the ambitions the companies in Piura are showing, and their ability to meet such high global standards bodes well for the people living in the region.
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Aug. 26, 4:00 PET
Why banks are so interested in the weather
Though the severity and timing of El Nino is in high debate, there will inevitably be an impact on the Pacific's resources, and Peru's in particular.
Anchovies will be harder to catch, and short-term, mahi-mahi and tuna may be easier to catch and more abundant.
There will be thousands of other tiny little shifts for better or worse.
Peru Pacifico's co-founder Erick Cuadros Arenas said one of those little shifts is that banks are getting stingy.
With every negative news report, Arenas said, banks get a little more nervous about lending.
"That doesn't mean they know what they're talking about," Arenas laughed.
The main sector to feel the pinch, though, won't be Arenas', though – it will be anchovy-dependent harvesting industry.
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Aug. 26, 3:30 PET
No squid surimi (yet)
Remember when the industry was salivating over the notion that the huge resource of Pacific giant squid might be used as a raw material for surimi?
Yeah, that didn't happen.
And while it is technically a possibility, Peruvian companies are not set up to even test it, and there really isn´t enough interested buyers to justify putting money into investigating it, according to Erick Cuadros Arenas, one of the founders of Sullana-based Peru Pacifico.
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Aug. 26, 10:00 am PET
Remember my name
PeruPez is a poster child for how quickly Peruvian companies are moving. The company expects sales to reach $30 million by the end of the year, a healthy 25 percent jump from last year. Diestra anticipates that rate of growth – around 30 percent per annum – will keep on climbing.
A little more than a decade ago, the company’s sales were $3 million.
For one, it’s just a good time to be in squid. Olivera puts the average price for 9 kilo blocks at around $2,500 per metric ton for fillets, and $2,400 per metric ton for wings.
And a lot of it comes from swaying some big gun buyers away from other sources. In addition to its massive Japanese partners (see below), the company recently won the business of Florida-based wholesale giant Beaver Street Fisheries to supply bagged giant squid rings.
It wasn’t a tough sell, Olivera said.
“They saw it and said, ‘Wow, I have to get this,’” he said.
Another client, France’s Alpha Bay, is a happy buyer of its scallops on the half-shell (farmed in Sechura Bay), which it uses for the famed Coquille St. Jacques.
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Aug. 26, 9:30 am PET
Keeping it cool
With an abundance of giant squid working its way through the supply chain currently, PeruPez is operating full bore. The San Isidro-based company has a lot of competition in the region, so differentiation is key.
For PeruPez, that means not only a focus on high-quality processing, but also a high-tech cold chain that mitigates the risk from spoilage. In fact, the first thing President Dario Alvites Diestra and Commercial Manager Humberto Olivera show us is the company’s “heart,” where temperatures for the cold storages and volumes for ice making are regulated from one small area, and one skilled technician.
There’s almost never a stretch of time where the factory temperatures are anything but chilly.
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Aug. 26, 9:00 am PET
Eels: Kind of a big deal
The sushi market demands a lot of fish, and try as chefs and foodies may, there is a very small core of preparations that nearly every restaurant has to have.
And as a result, some of those very fish that are hard to find and are extremely pricey when you do.
Take unagi – that deliciously sweet and sour sushi topping made out of conger eel. No sushi restaurant I’ve ever stepped in hasn’t had unagi as an offering, to the point that most consumers don’t really think about where it comes from or how it’s processed.
Once place that it comes from is on off coast of Peru, with a small but important contribution of 5,000 metric tons per year.
PeruPez, whose absolutely fascinating factory our tour group visited this morning, is in the enviable position of controlling 50 percent of the quota, leaving competitors Skana and Illary in the dust.
The entire operation of harvesting and processing wild eel at PeruPez is, well, different. At least for somebody that’s never seen it. Any confusion on how the harvesting process works is mine alone – our hosts were very patient with me, even drawing diagrams – but as far as I could understand it functions more or less like this: lengths of PVC pipes are secured together like a giant pan pipe and lowered into the water from the bow of a vessel. As the boat moves forward in the water, the pipes scoop up the eels, and the eels, try as they might, can’t swim out.
From there, the traps are pulled aboard, and delivered live into the factory, which is where we found them when we started our tour. From there, the eels are plucked out and filleted. And not on a handy little Marel or Baader machine, but by hand using a method Rambo would be proud of: stab the head to the filleting table with an awl to secure the fish, run the razor-sharp knife softly along the each side of the spine, set the entrails aside, then off with their heads
Using the highly scientific “one Mississippi, two Mississippi” technique, I counted that, on average, the workers were doing the job in five seconds per eel.
All that work is worth it: companies are paying a whopping $30 per kilogram.
“It’s gold,” PeruPez Commercial Manager Humberto Olivera told IntraFish.
PeruPez has found eager customers around the world, including Maruha Nichiro and Toyota Tsusho, who have turned into close partners.
“We prefer to keep our number of clients small, but the quality of them high,” Olivera said.
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Aug. 25, 3:00 pm PET
Find a niche and fill it
If you’re looking for giant squid, the curiously-named Spring Valley Fruit company is clearly one of your best choices. While several other Peruvian companies are looking to diversify their options, Spring Valley – part of the Agropesca group – is part of a much larger conglomerate that for years has traded across all kinds of food products, thus the name.
But inside the plant, there isn’t much else to be found but squid. And more squid. The remarkable ways that squid can be processed, prepared, packaged and presented were far, far beyond my imagining.
Giant squid in particular is Spring Valley’s specialty, and it was moving a lot of volume through the plant, and leaving almost nothing behind. From tentacles to fillets to mouths to eyeballs, there was pretty much something for everyone. Then beyond that were the preparations -- buttons, rings, tentacle slices, strips -- that would give a discerning buyer in almost any country a product they were after.
And even with all these squid parts squirming all over, the factory was meticulously regulated. Along with all the alphabet soups of certification and high-tech devices like laser temperature machines, the protocol for how workers and guests moved around the factory was phenomenal.
Though the factory is overwhelmingly focused on giant squid, some 20 percent of the squid it processes is loligo gahi -- a smaller squid that brings the company a little extra premium on European markets. Some other species, such as mahi-mahi and horse mackerel, are also produced at the plant.
Asia is the primary recipient of the company’s products – around 55 percent go into those markets -- followed by 30 percent to the EU (primarily Italy), and the remainder to the US and other markets.
The 5,000 square-meter plant produces around 150 metric tons of product per day when fully operating (or around 11,000 metric tons per year), through plate, IQF and tunnel freezers. Its on-site cold stores can hold around 2,000 metric tons.
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Aug. 25, 12:45 pm PET
Picture this
Our tour of the Altamar factory began with our imaginations. Well, it kind of ended with our imaginations, too. See, the company’s $20 million, 14,500 square-meter plant isn’t open yet. It’s just two months away from being fully operational, and its white walls and unused equipment oozes one thing: potential.
A modern frozen fish plant for a modern era, the Altamar plant in Paita has a lot of special aspects to it. By taking the combined knowledge of factory operations of dozens of the executives who have worked in fish for years, the company has created the “perfect” multi-species Peruvian fish factory. Add in a reusable water system that can both improve the factory operations and provide a supply of water to nearby farms, and the plant is ready-made for a sustainability-focused big buyer to tour (and we had two on-hand).
The plant will primarily focus on giant squid and scallops, but some mahi-mahi will be in the mix as well. Some 200 metric tons of finished product can be produced from the plant daily.
Guillermo Jimenez Aguilera, chief of quality assurance, said the new factory will be among the most hygienic and quality-focused in all of Peru.
Already, the company has made a name for itself, having stolen a contract to supply calamari steaks to Pacific Seafood for its Newport band.
“We sent them just one container, and they liked it so much that they switched to us,” one Altamar executive told me. Among other major customers is another Northwest giant, Trident Seafoods.
Altamar is owned by a US parent, Altamar Foods Corp., which has been doing business in Peru for two decades. Its Altamar processing operations, however, were established in 2009.
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Aug. 25, 12:00 pm PET
Brand leveraging
Nothing is more ambitious than building a brand, but for Hayduk it’s not moving mountains. The company’s Campomar brand is already the No. 2 canned fish brand in the country, so the new launch of branded frozen fish items isn’t an unheard of move.
The company is confident its new resealable bagged lines, which include IQF squid tubes and skin-on hake fillets, will be a success.
“We have a plan to sell to all of the retailers in Peru,” Enrique Leon Taboada, director of sales told IntraFish. Not some, all.
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Aug. 25, 11:00 am PET
Bubble or just the beginning?
Just heard an amazing statistic quoted as we walked the floor of the Hayduk factory: 1 percent of the Peruvian quota is now worth an estimated $100 million, according to Taboada.
It goes to show how grossly underestimated the value of the Peruvian fishery is, not just in anchovies but in hake, jack mackerel, mahi-mahi and giant squid. It’s a sector that deserves attention – and further investment.
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Aug. 25, 9:35 am PET
Russia’s reach spans the globe
At Paita-based Hayduk – Peru’s fourth-largest anchovy quota holder and a significant exporter of other seafood exports – Russia is the top story.
Markets for hake, which is in season, have been thrown into chaos, Enrique Leon Taboada told IntraFish from their factory floor.
“They need food and it’s likely they will be turning to Peru,” Taboada said. He’s fielding multiple calls a day looking for hake and other products and Russian importers scramble to fill in the gap from the import ban. “In one month, I think we’ll really be feeling the demand.”
Hayduk, which already had a sizeable Russian customer base, has adapted its operations to the new market reality, and that was clear from within the factory. While in a normal hake season the factory might be putting around 60 percent of its product into HGT format, that’s shifted to around 90 percent in response to the demand, he said.
“Everything you see here is a result of Russia,” he said, pointing to the cadre of processing workers. “I hope this demand continues and that other products will get more demand as well.”
Russia is ironically driving other aspects of the business as well. The cooked squid products Hayduk produces is shipped to China, reprocessed and sent – you guessed it – to Russia as a dried snack.
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Aug. 15, 9:15 am PET
Who's in charge here? Oh, those guys
Peru’s fisheries sector may have plenty of room for consolidation, but let’s be clear: there is a very small handful of players at the top.
In anchoveta fishmeal, following the controversial acquisition of Copeinca, Pacific Andes-owned China Fishery Group has the lion’s share of the quota with a total 22 percent.
After that comes Tasa, with roughly 19 percent, Exalmar with around 12 and Hayduk with around 7.5 percent, according to Jorge Navarro Chabaneix, director of branded product says at the company.
But the world’s focus on fishmeal and oil in Peru is only showing part of the story. The human consumption sector is booming in Peru as well. And while some of the main fishmeal and oil players live or die by the anchovy quota (which can be quite erratic to say the least), Hayduk, the first stop on our trip to the port town of Paita, has mitigated its risk and broadening its opportunities by diversifying into other products such as canned and frozen fish.
Hake, mahi-mahi and giant squid are all getting bigger and bigger for the company.
Hayduk operates 28 of its own vessels, targeting several species, but primarily anchovies and hake. The company operates three factories on the coast.
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Aug. 24, 12:00 pm PET
Don't hold the anchovies
To start any tour of Peru, it’s good to start with the basics: The importance of Peru’s anchovy resource can’t be overstated. The world’s aquaculture sector is built on its backbone, so the resource, the way its managed, and the part of the value chain it moves in to should be watched carefully.
But outside of anchovies, there are a range of other species that are becoming exploited more fully and efficiently, and while they won’t have the importance of anchovies, they certainly will play and important role in satisfying the insatiable need of the world’s seafood demand.
Quick facts: Last year, Peru’s exports actually fell, on lower anchovy production, by 17.6 percent overall, according to Adex trade data. But the value of those exports -- $2.7 billion – is still mind boggling for such a small country.
Care to take a guess who took the majority? China, naturally, who accounted for 37.2 percent of those exports worth over $1 billion. The United States took a fraction of that – just $265.1 million, but that was a sharp increase over years past. The losers? Germany, Japan, Spain and Denmark lost a lot of share.
