LATIN AMERICA: Fish processors seek diversification to target export markets
When La Coruña entered the Bolivian market earlier this year, shipments ranged between 500 and 1,000 cases of canned fish. But as a result of political turmoil there in September, orders were put order on hold. The company is now negotiating sales to Brazil, with initial shipments estimated at 1,200 cases per month. Management is confident that the company's products will be cost competitive there, in spite of that nation's 20% duty on fish products. La Coruña and other distributors will have very tight profit margins in Brazil given the hefty tax and the fact that raw materials costs are on the rise. During October, the price of canned fish at Peruvian processing plants rose from US$14.12 to US$16.38 per case of 58 cans.
Faciosa is a production company that has its own fishing fleet and processing plant. With operation costs, at record levels and sales on the wane, the company is battling a debt burden of US$22.5m. Under a debt restructuring plan now under negotiation, Faciosa projects fish flour production of 35,000 tonnes per annum and a price of US$350 per tonne. That would generate earning of US$12.25m, of which profits are expected to be approximately US$2.5m. In addition, the company's processing plant at Chamote has an installed capacity of 3,000 cases of canned fish per 8-hour shift, which will generate substantial additional income. Faciosa and other fish exporters will have slim profit margins in 2001, but those that succeed in diversifying their Americas sales base can achieve long-term stability.
By Steven Lewis
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