Fjord Seafood ASA has entered into an agreement to purchase 100% of the shares in the aquaculture company Salmoamerica Ltd (Salmones Americanos Ltda) in Chile.

The takeover is expected to occur during November. The purchase price for the shares has been agreed at US$50m.

Salmoamerica is a fully integrated marine farming company that consists of two hatcheries and three smolt facilities with an annual capacity of five million smolt, ten fish farm facilities with a capacity of 17,000 tonnes, and slaughtering and value-added processing facility with a capacity of approximately 15,000 tonnes. Salmoamerica has a total of 465 employees.

The company has specialised in the production of Atlantic Salmon with 73% going to the USA market. In the current year Salmoamerica will achieve production total of approximately 7,500 tonnes and estimates an increase to 10,000 tonnes next year. In 1999, the operating result was US$4.7m, and the company's estimate for the current year is around US$6m.

Two years ago, a countervailing duty was imposed on the Chilean aquaculture industry on salmon that was exported to the USA. Salmoamerica has, in the preliminary determination published by US authorities last Summer, been exempted from this duty, so that the company will now pay 0% duty to this market.

The acquisition of Salmoamerica is of major strategic significance for Fjord Seafood, said Managing Director Paul Birger Torgnes in a press release. Through this transation, Fjord has taken an important step in the direction of pursuing our declared ambitions of becoming a globally integrated salmon farming company. Salmoamerica is a firmly established company with massive potential and an adroit management that will constitute a solid platform for Fjord Seafood's ongoing plans for growth in Chile. Torgnes added that due to the acquisition of Salmoamerica, Fjord Seafood will also obtain advantageous access to the North American salmon market.

After the takeover of Salmoamerica, Fjord Seafood will achieve a production of 50,000 tonnes of salmon from its wholly owned facilities in the coming year. Production capacity amounts to almost 60,000 tonnes, which is equal to the capacity of approximately 70 Norwegian salmon farm licences. The total number of employees (after the latest acquisition) is 1065.

By Steve Anderson