Large Norwegian firms such as Statkorn Holding ASA and Fjord Seafood have made sizeable acquisitions, while small and medium-sized firms with specialized technological expertise in fish farming have flourished. The salmon capital is Puerto Montt in Chile’s 10th region, roughly 1000 km south of Santiago. This city, not surprisingly, houses a cluster of Norwegian companies. The groundwork has been laid for a flood of Norwegian capital and knowledge.
The recent free trade agreement between the European Free Trade Association (EFTA) and Chile is the first of its kind between Europe and a South American country. The agreement covers all important aspects of trade. Chile is Norway’s second-largest trade partner in South America. In 2001 and 2002, Norway exported commodities valued at NOK 290 and 160 million, respectively. Another important milestone is the agreement between Norway and Chile effecting a removal of all taxes placed on Norwegian products in Chile and vice versa. Until now, Norwegian exporters have been faced with taxes of 6 % on all commodities.
In light of the Norwegian activity in Chile, the Norwegian Embassy took the initiative of establishing a Norwegian-Chilean Chamber of Commerce in Santiago in 2001. The Chamber today consists of 40 member companies and will, in 2004, become the first foreign chamber of commerce in Chile to open a local branch in Puerto Montt. The scene is set for Norwegian aquaculture and fishing gear firms to make a lasting impact on the Chilean market, especially in the areas of research and development, vaccines, traceability and transport (well boats).
Realizing the Dream
The export of commodities is made possible through effective financing and access to local banking solutions. Years of experience and collaboration on the part of financial institutions in Norway has made many a Norwegian dream of export to Chile possible. The open nature of the Chilean economy – which places minimal limitation on foreign trade in terms of currency or Central Bank regulation – has encouraged cooperation between financial entities.
A number of Norwegian success stories have been realized specifically through the expertise of the institutions Eksportfinans and GIEK. The former – a joint endeavour between domestic banks and the Norwegian government – develops and offers competitive, long-term financial services to the export industries and the local governmental sector. GIEK (The Norwegian Guarantee Institute for Export Credits) is the central governmental agency responsible for furnishing guarantees and insurance on export credits.
The Norwegian private bank DnBNOR (formed from the 2003 merger of two of Norway’s largest banks, Den norske Bank and Gjensidige NOR) has a long track record of providing the valuable knowledge that Norwegian companies need when setting up business abroad. The bank has close ties with Innovation Norway and has built up a network of financial contacts in Chile designed to assist in the establishment of operations. The expertise they provide is twofold. On a direct financing level, DnBNOR, in collaboration with GIEK and Eksportfinans, can contribute to the financing of equipment and infrastructures necessary to conduct business. On an operational level, the bank has alliances with Chilean banks, which provide services such as leasing, factoring and account holding – thus assisting Norwegian companies in fiscal management. In addition, the local knowledge provided by DnBNOR’s representative at Innovation Norway means that the bank can put Norwegians in touch with local lawyers and insurance companies. In other words, a tailor-made solution is always available.
A Norwegian Success Story
Several Norwegian companies are already experiencing great success in the Chilean market. AKVAsmart, the world’s leading supplier to the salmon farming industry within the areas of farm process technology and IT & consulting, is one shining example. The main products delivered by the firm are feeding technology and production management systems, both of which are critical areas for customers in general and the Chilean market in particular. Since 1997, AKVAsmart has had offices in Puerto Montt, Chile’s capital city for aquaculture and fishery activities. Many of the largest fish farming companies in Chile employ AKVAsmart products and services. Their Superior Control system has enjoyed particular success. Superior Control is a modular IT system for production monitoring within the aquaculture industry. Systematic data collection using Superior Control generates accurate documentation of the production process from smolt input to harvest. Using recorded data, the system delivers around-the-clock analysis of and reports on the production process.
Chile’s largest fish farming companies employ AKVAsmart’s Superior Control information technology system to keep tabs on all aspects of the production process
In January 2003, Chile’s leading fish farming company, AquaChile, signed a contract to implement the Superior production control system developed by AKVAsmart. AquaChile runs around 40 sites in Chile and, in 2001, made a direct investment in AKVAsmart’s feeding technology. AquaChile CEO Andrés Saint-Jean sees the importance of IT solutions in securing continuous improvement of the production process. “We were looking for a software tool that could store all the critical data at farm level and combine this into a comprehensive analysis tool. We feel that Superior Control from AVKAsmart fulfils these requirements best,” said Saint-Jean.
“This contract further consolidates our position as the market leader in Chile. According to our calculations, we now have 55 % of the Chilean production control software market,” said Carlos Arenas, IT Manager of AKVAsmart Chile.
Much of the fisheries sector has experienced difficult times, yet it is also an industry in growth. For AKVAsmart, Chilean business counts for an increasing part of their revenues, as it is a market that is very keen to implement technology to further improve farming operations. Chilean customers are also known to be demanding, which makes success in this country all the more appreciated.
In August 2003, AKVAsmart Chile landed another major software contract, this time with Chilean fish farming heavyweight PescaChile. PescaChile have implemented Superior Control at all of the company’s farms. The company also installed the planning tool Superior Plan.
“We have been looking for a versatile system for logging and controlling the production figures. We found Superior software to cover our needs best. We wanted a software that could give us a complete overall status of our farms on a day-to-day basis, plus the possibility to project the company production, recalculating the results on the real updated status,” said Mike Bullock, Production Manager in PescaChile. “This investment is a big step towards using IT to improve our business operations. We also see the area of traceability becoming more important to us each day, and this influenced our decision.”
The 40 employees who make up AKVAsmart’s office in Puerto Montt are optimistic about the future and have built up a good standing within the Chilean market. Having previously targeted the giant multinationals in the Chilean market, they are now seeing growing interest for IT software among the large “local” companies. It appears as though this Norwegian success story will continue for a very long time.