1311 aqua chile's corporate presentation 0

AQUACHILE Pág. Nº1
EMPRESAS AQUACHILE S.A.
Corporate Presentation
2013

Pág. 03
Pág. 09
Pág. 28
Pág. 36
Pág. 40
INDEX
01 Overview
02 About AquaChile
03 Industry Performance & New Regulation
04 Sustainability and Stakeholders
05 New Developments

01
Overview

Empresas AquaChile
at a glance.
AquaChile is a Chilean company that
produces and commercializes Atlantic
Salmon, Pacific Salmon, Sea Trout and Tilapia.
Source: Infotrade
It owns inland farms in Costa Rica and
the only three farming licenses granted
in the Bayano Lake in Panama to
produce Tilapia.
It has operations in Chile, Costa Rica, Panama
and a commercial office in the United States.
It is the largest producer in Chile of Salmon
and Sea Trout. It owns 150 sea licenses which
provide a solid basis for its growth.
It has more than
230
customers in
30
countries.

283 281
Empresas AquaChile
at a glance.
Public since
May 19th, 2011
Market capitalization of
USD 578 millions
as of October 30, 2013
Main Shareholders:
Puchi and Fischer Families
578
Shareholder’s Structure**
Puchi Family
33,03%
Fischer Family
33,03%
Pension Funds
4,53%
Others
29,41%
Others
33,95%
Source: The Company
*As of October 30, 2013 ** As of September 30, 2013
163 143
34
Chilean Salmon Companies by
Market Cap (MUSD)*
Source: Bloomberg

2012 Main Chilean Salmon and Sea Trout Exporters
(Th. Net Tons)
51.027
46.604
32.101 31.200 30.448
26.993
24.190
20.335 19.122
10,4%
9,5%
6,6% 6,4% 6,2%
5,5%
5,0%
4,2% 3,9%
Volume Market Share
Source: Infotrade Dic-12

Annual Sales
In MUSD
410
Source: The Company
25 years
of succesful track record.
Crisis
• ISA virus effects
• Financial restructuring
• New legal framework focused
in long term sustainability
• Advantages of diversification
2006 – 2007 Period
• 3rd largest world producer
• Global presence and
reputation
• IPO and acquisition plans
Beginnings
• 25 years of history
• Merger with Salmones Pacífico
Sur
• Track record forming strategic
alliances
• Sustained growth
Today
• Diversified business model
• Vertical integration
• High growth potential
• Industry consolidation capacity
Revenues
In MUSD
2012

X and XI Region
X and XI Region
X and XI Region
19%
36%
20%
25%
17%
31%
16%
15%
Tilapia Pacific Salmon Sea Trout Atlantic Salmon
Bayano Lake Guanacaste
Source: The Company as of December 31, 2012
Focus in
diversification for success.
% of Consolidated
Sales (US$ )
% of Consolidated
Sales (tons)
Geographic
Diversification

02
AquaChile

AquaChile:
Strong organic growth plan based on unique assets
Sea Water: High quality and diversified license portfolio
Fresh Water: Flexibility and excess installed capacity
Processing: Installed capacity to absorb growth
Vertical integration throughout the value chain
Global presence and reputation

Sea water:
Unique, diversified and large license portfolio.
One of the largest sea licenses base and the
largest presence within sanitary areas in the
Chilean industry.
150*
Sea licenses distributed in
29
Sanitary Areas
-Geographic distribution
-Organic growth capacity
-Operational and productive continuity
-Continuous supply to clients
-Species diversification
-Natural, climate and sanitary risk
diversification
* Include 7 brackish water licenses

INDUSTRY
Total of 24 sanitary areas
AQUACHILE
55 sea licenses in 12 sanitary areas
50% of sanitary areas of the Los Lagos Region
Sea water:
Unique, diversified and large license portfolio.
INDUSTRY
Total of 34 sanitary areas
AQUACHILE
95 sea licenses and 17 sanitary areas
50% of sanitary areas of the Aysen Region
Los Lagos Region
Aysen Region
Sea licenses Sanitary areas
Geographical
diversification in sea
licenses for Salmon
and Sea Trout
production.

Tilapia Costa Rica & Panama:
Large water volume and favorable climate.
Costa Rica
-Strategic access to large volumes of high-quality water
-Optimal location for logistics
-21,000 tons WFE capacity
Panama
-The Company has the only three tilapia farming licenses granted in the Bayano Lake
-Potential to produce over 20,000 ton WFE
Geographical diversification in Tilapia production
Guanacaste
Bayano Lake
Costa Rica
Panama

AquaChile:

Fresh water:
Flexibility and excess installed capacity.
24*
hatcheries from the IXth Region to
the XIth Region, including 1 hatchery
near Santiago.
14**
fresh water farming licenses in the
Xth and XIth Regions for Sea Trout and
Coho smoltification.
7
brackish water licenses in the XIth
Region for Coho smoltification.
* Seven of them are rented under long term contract
** Two of them are rented under long term contract
Geographical
diversification in fresh
water.
1
River licenses in the XVth Regions for
Atlantic Salmon smoltification.

AquaChile:
16

Processing:
Installed capacity to absorb growth.
7 plants with a total capacity of 190,000 WFE tons, including one of the largest plant in the World
Current production capacity of AquaChile’s processing plants
In thousands of WFE tons
50,0
26,0
21,6
34,4
36,7
21,0
Cardonal Cailín Hueñocoihue Antarfood Calbuco Costa Rica
Location Puerto
Montt
Quellón Dalcahue Chonchi Calbuco
Plant Type
Value
Added
Value
Added
Whole
Salmon
Whole
Salmon
Value
Added
PAC-HACCP
Certification
Yes Yes Yes Yes Yes
Value
Added
Yes
Guanacaste
Source: The Company

Diversity of Salmon Products
Whole HG Trim C
Trim D Trim E Portions
Whole
Breaded Fillets
Fillets
Diversity of Tilapia Products
Processing:
Installed capacity to absorb growth.
Chile Costa Rica

AquaChile:

The Company adds value to all of its productive chain, from genetics up to commercialization.
Vertical integration
troughout the value chain.
INTEGRATION AquaChile is vertically integrated in the Salmon and Tilapia business.
GENETICS
FRESH WATER
Eggs & Smolts
SEA WATER
Farming
PROCESSING COMMERCIALIZATION
FEED
SALMON AND
SEA TROUT
TILAPIA
FRY
PRODUCTION
GENETICS
FARMING
FEED*
PROCESSING COMMERCIALIZATION
FEED

Source: The Company
Genetics:
15 years of succesfull and proven genetic development.
Improvement in Tilapia conversion factor of ACI Group Reduction in the Tilapia’s on growing cycle
Universidad
de Chile
0,12%
AquaChile
99,88%
Increase in harvest weight of the Pacific Salmon
In WFE kg
Δ+40%
Aquainnovo: Created to be a world class center for genetic improvement in aquaculture
In number of days
Source: The Company Source: The Company
Δ-36%
Δ-21%

Genetics:
15 years of succesfull and proven genetic development.
Genetics in Salmon and Sea Trout Genetics in Tilapia

Fish feed plant:
State of the art assets to feed our fish.
Joint venture with Biomar in Chile, one of the
world’s leading suppliers of high performance
fish feed.
126,000 tons of installed capacity.
Modular design allows the company to double
its output capacity.

AquaChile:

Commercialization:
Global presence and reputation.
AquaChile has over 230 clients in more than 30 countries in the five continents
We have more than 19 years of experience in Asia and over 20 years in the fresh salmon market
Source: The Company
Destination of AquaChile’s main Salmon, Sea Trout and Tilapia sales
In net tons
127
Operations
Salmon and Sea Trout sales 2012 (net tons)
Tilapia Sales 2012 (net tons)
Tilapia
Salmon
3.690
1.012
810
274
16.577
54
21
84
127
23
78
6.870
127
793
1.859
6.709
157
132
2.018
5.563
146
32 1.230
867
2.094
,
1.505
268

AquaChile Inc:
Servicing the United States from Miami.
Experienced customer service
Reliability and commitment
We deliver!
The only Salmon & Tilapia company with
operations inside Miami International
Airport
Improved cold chain
Less handling involved

Our brands and
our main clients.
Renowned Brands Reputable Clients

03
Industry
Performance &
New Regulation

Sea lice monthly monitoring 2007-2013
(Number of sea lice per fish)
Significant mortality reduction in the industry since 2009
Sea lice level increasing according to the increase in the industry biomass
1,65%
1,20%
0,70%
Chilean industry
Productivity performance
20%
15%
10%
5%
0%
ago-08
dic-08
abr-09
ago-09
dic-09
abr-10
ago-10
dic-10
abr-11
ago-11
dic-11
abr-12
ago-12
dic-12
abr-13
ago-13
Pacific Salmon Atlantic Salmon Sea Trout
Source: Aquabench
Monthly mortality rates
(%)
7,4
5,9
0,6
70
60
50
40
30
20
10
0
mar-07
jul-07
nov-07
mar-08
jul-08
nov-08
mar-09
jul-09
nov-09
mar-10
jul-10
nov-10
mar-11
jul-11
nov-11
mar-12
jul-12
nov-12
mar-13
jul-13
Pacific Salmon Atlantic Salmon Sea Trout
Source: Aquabench, Sernapesca

Sea lice monthly monitoring
(Number of sea lice per fish)
Ova imports with no restrictions.
Non-existence of biosecurity standards.
Low-quality Smolts.
Inadequate regulation.
Excessive densities.
Non-interrupted cycles, with no fallowing.
Deficient coordination among production sites.
Low usage and low quality vaccines.
80
60
40
20
20%
15%
10%
5%
0%
mar-08 ago-08 ene-09 jun-09
Pacific Salmon Atlantic Salmon
Sea Trout
0
mar-07 ago-07 ene-08
Pacific Salmon Atlantic Salmon
Sea Trout
Monthly mortality rates
(%)
Consequences
Sea lice Crisis
ISAv Crisis
Origin of the sanitary crisis:

New regulations
Structural Changes in the Industry: Controlling Risk
Fresh water AS ST PS
Restrictions and new sanitary protocols on
egg imports and hatchery use ✓✓✓
Individual Screening of Broodstock ✓✓✓
Affluent and effluent treatment ✓✓✓
Land based hatcheries ✓
Safe mortality disposal ✓✓✓
Standardization and validation
of diagnostic laboratories ✓✓✓
Smolts: ISA free certification before
transferring to the sea ✓✓✓
Safeguards and optimization of freshwater
production ✓✓✓
Clear and strong disinfection protocols ✓✓✓
AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon
Sea water AS ST PS
Sanitary areas ✓✓✓
Operating and fallowing schedules in
sanitary areas ✓✓✓
Macrozone definition: 4 in the Xth Region
and 3 in the XIth Region ✓✓✓
Corridors definition between macrozones
(5 miles) ✓✓✓
Minimum distance between licenses
(1.2-1.7 miles) and sanitary areas (3.5
miles)
✓✓✓
Re-location of licenses located in corridors ✓✓✓
New licenses granted for 25 years
with the option to be renewed ✓✓✓
Sanitary zoning for diseases ✓✓✓
Strengthening of control powers (biomass
stamping out in case of disease) and
forfeiture conditions of the farming
licenses
✓✓✓
Establishment of specific sanitary programs
for ISA, Sea Lice and SRS ✓✓✓

New regulations
Sea water (Cont..) AS ST PS
Improved adherence of legal framework regarding sanitary and environmental issues ✓ ✓ ✓
Coordinated programs for sea lice control ✓ ✓
Safe mortality disposal ✓ ✓ ✓
No fish movements between marine sites ✓ ✓ ✓
Restrictions and new sanitary protocols for wellboats ✓ ✓ ✓
Application of maximum farming densities in the sanitary areas ✓ ✓ ✓
Standardization and validation of diagnostic laboratories ✓ ✓ ✓
Re-location allowed in the XIth Region ✓ ✓ ✓
License application suspended in the Xth and XIth Region until 2015 ✓ ✓ ✓
Penalties increase (penalty equal to economic value of biomass) ✓ ✓ ✓
Increase in patents: more resources for research ✓ ✓ ✓

Final steps on the legal framework : pending final decree AS ST PS
Flexibility in the fallowing period of licenses
• Extended fallowing periods without expiring dates
• Licenses located in corridors allowed to stand by without expiring
✓ ✓ ✓
Density restriction per license
Biosafety qualification regarding mortality records from the last productive cycle
• Low mortality: maximum allowed density
• High mortality: stocking restrictions
✓ ✓ ✓
Density restriction per sanitary area
• The sanitary area density will determine the maximum number of fish to stock in each pen, except
those licenses with low mortality performance during the last productive cycle (less than 15%)
• The density will be determined by:
• Environmental performance (10%): Number of licenses presenting aerobic conditions at the end
of the productive cycle
• Sanitary performance (65%): Total mortality within the last period
• Productivity performance (25%): Stocking intention in the sanitary area compared with the
optimal stocking
• Optimal stocking in the sanitary area depends of the mortality in the last productive cycle.
• Low mortality: optimal stocking increase in 16%
• High mortality: optimal stocking decrease 24%
✓ ✓ ✓
New regulations

New regulations
Density restriction per License
Mortality
Biosecurity
Level
Next Cycle Smolt stocking
] 0% ; 15% ] High Maximum allowed density
] 15% ; 18% ] Medium High 10% smolt stocking reduction
] 18% ; 22% ] Medium 20% smolt stocking reduction
] 22% ; 26% ] Low 1 40% smolt stocking reduction
> 26% Low 2 60% smolt stocking reduction

New regulations
Environmental Performance:
Weight Rank (%) Score
10%
]75,100] 100
]50;75] 75
]25;50] 50
[0;25] 25
Sanitary Performance:
65%
[0%,15%[ 100
[15%;17%[ 75
[17%;20%[ 50
>20% 25
Productive Performance:
25%
[0%,100%[ 100
[100%;110%[ 75
[110%;120%[ 50
>120% 25
Score
Biosecurity
Level
Permitted Pen Density
] 85 ; 100 ] High
Atlantic Salmon: 17 kg / m3
Sea Trout: 12 kg / m3
Pacific Salmon: 12 kg / m3
] 64 ; 85 ] Medium
] 43 ; 64 ] Low 1
] 0 ; 43 ] Low 2
Density restriction per Sanitary Area*
* Apply for licenses with more than 15% mortality in the last cycle

New regulations
Final steps on the legal framework : pending final decree AS ST PS
Smoltification in lakes, rivers and brackish water
• Minimum distance between smoltification sites and on growing sites / gathering sites / docks for
aquaculture operations (3 miles)
• Smoltification area must be located in disease free area from list # 2 with specific sanitary control
program
• However Sea Trout and Pacific Salmon smoltification area can be located in surveillance area from list
# 2 with sanitary control program for 3 years
✓ ✓ ✓

04
Sustainability
and
Stakeholders

We are committed
to our employees, our clients and the environment.
-More than
5,100
employees in Chile, Costa Rica, Panama & United States
-Benefits above legal requirements
-On the job training
-Costa Rica: ISO 14001:2004, OHSAS 18001:2007 and BAP for Global Aquaculture
Alliance, the most demanding at present
-Chile: Global GAP certification in progress
-Social Responsibility Report available (www.aquachile.com/sustainability)
OUR LABOR AND
ENVIROMENTAL
STANDARDS

We are committed
-To produce quality, healthy and safe food
-To act in a proactive and respectful way towards the environment
-To develop in a safe and healthy work environment
-To benefit the communities and suppliers in the places where the
company operates
OUR CORPORATE
SOCIAL
RESPONSIBILITY
PRINCIPLES

We are committed

05
New
Developments

Disease free eggs
recirculation hatchery: Chaicas.

State of the art
research facility: Lenca.

Alejandro Cristian
Verlasso salmon
Harmoniously raised fish
www.verlasso.com
Verlasso farms

Fish feed in Costa Rica:
association with Biomar.

Pet food flavoring plant:
association with SPF.

Note on forward-looking statements
This report includes forward-looking statements. These may
include words like “anticipates”, “estimates”, “expects”,
“projects”, “intends”, “plans”, “believes” or other
comparable expressions. Forward-looking statements do not
represent past events, including statements on the beliefs
and expectations of the company. These statements are
based on current plans, estimates and projections, and
therefore cannot be overrated. Forward-looking statements
entail certain risks and uncertainties. The company notes
that a significant number of factors could result in current
results to differ materially from those contained in any
forward-looking statement. These factors and uncertainties
include in particular those described in the document that
the company submitted to the Chilean Securities and
Insurance Commission (SVS), section on Risk Factors.
Forward-looking statements are related only to the date
when they are made and the company assumes no
obligation to publicly update any such statements in the
presence of new information, future events or otherwise.
This document purports to deliver general information on
Empresas AquaChile S.A. Under no circumstance does it
constitute an exhaustive analysis of the financial, productive,
commercial and health situation of the company, and
therefore any consideration on the advisability of acquiring
or selling securities of the company would require the
interested party to conduct an independent analysis.
In accordance with applicable standards, Empresas
AquaChile S.A. has sent its financial statements and notes to
the Securities and Insurance Commission, which are
available for consultation and analysis on its webpage at
www.svs.cl and also at www.aquachile.com.

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