Market Scene : Chileans Enjoying Net Profit : This South American nation ranks as sixth biggest in world fishing industry, catching crab, salmon and a myriad of other treasures.

Some of those fancy fish entrees at Los Angeles restaurants are from the same Pacific Ocean that washes California’s shores--but they come by plane thousands of miles from Chile. And not all king crab comes from Alaska. Try the Chilean variety.

The southern region of this South American nation, an area that once was a sleepy backwater, is home to an emerging food-fish industry that figures handsomely in Chile’s status as one of the world’s six biggest fishing countries.

An American-owned company is catching tons of Chilean sea bass and king crab in the seas south of Puerto Montt. Others are hooking Antarctic whiting and golden kingclip, while salmon farms off the region’s jigsaw shoreline are producing even more tonnage for the U.S. and Japanese markets.

Hans Schmidt, 30, of Seattle has been running the Omega fishing company in Puerto Montt since 1987. He is the son of Peter Schmidt, a Seattle shipbuilder with two shipyards in Chile.

Hans Schmidt started out fishing for Antarctic whiting and golden kingclip in the seas south of Puerto Montt. But heavy exploitation appeared to be shrinking those resources.

“After not too long, we discovered a resource that no one knew existed,” recalled Schmidt, who was wearing jeans and a sport shirt as he spoke in his pine-paneled office with a waterfront view.

His boats hooked a few unfamiliar fish of nice size with firm, white meat. Hoping for more, Schmidt instructed his fishermen to set baited long-lines about a mile deep. And bingo!

“The first time, we came in with 15 tons of it, and no one in this area knew what it was,” he said.

It turned out to be a fish called bacalao in Chile. In English, it is called Chilean sea bass, although it is really a deep-sea variety of grouper.

“It’s a very delicious meat,” Schmidt said. “The oil makes it very rich.”

Refrigerated Chilean sea bass caught by Omega is now trucked to Santiago and air-freighted on a regular basis to the Los Angeles area, where Meridian Products Inc. of Santa Fe Springs distributes it to restaurants and supermarkets.

Schmidt said one key to his marketing success has been keeping up a year-round supply despite foul winter weather and rough seas off southern Chile. “If a restaurant is going to put sea bass on the menu, they don’t want to take it off next month,” he said.

He stepped to a big navigation chart on the wall and pointed to an area far south of Puerto Montt called Golfo de Penas--Gulf of Sorrows.

“I have four boats fishing here today,” he said, and added: “I have 20 tons coming in on one boat. This month (January), we’re going to bring in 180 tons.”

Omega’s 1991 catch of Chilean sea bass totaled about 500 tons, and more than half went fresh to California.

Omega also caught 600 tons of Chilean king crab in 1991. Called centolla in Spanish, this crustacean traditionally has been caught in the Tierra del Fuego area at the southern tip of the continent.

Fishing for sea bass, Omega discovered centolla in deep water west of Chiloe, a big island just south of Puerto Montt. “There’s more king crab here than they ever dreamed of,” Schmidt said.

Chile catches or farms a total of more than 6 million tons of ocean products a year, putting it in the second echelon of the world’s fishing countries along with Peru and the United States. The big three are China, Japan and Russia.

Chile’s main fishery resources are off its north coast, where anchoveta , a small herring, is netted for the production of fish meal and oil. Chile alternates with neighboring Peru as the No. 1 exporter of fish meal, used for feed.

A decade ago, fish meal and oil accounted for three-fourths of Chile’s ocean-export income. Then, fishing companies began exploiting more species of food fish in latitudes farther south.

And in the last four years, spectacular growth in salmon farming has again boosted food fish exports. As a result, fish meal and oil now account for half or less of Chile’s fishery export income.

The food-fish industry in Puerto Montt took a major leap in the mid-1980s when it began sending frozen Antarctic whiting, called merluza espanol in Chile, to the United States. U.S. demand for the whiting burgeoned in 1987 and 1988, when the fast-food and frozen food industries faced a shortage of true cod, their fish staple.

The Puerto Montt fishing fleet expanded rapidly. Along with Antarctic whiting, it brought in golden kingclip, known here as congrio , which is shipped to the United States frozen.

“More than 150 ships joined the fleet,” said Jose Ramon Gutierrez, manager of the Multiexport packing company. “There was over-exploitation and low production per ship.”

In 1990, the boom began to fizzle. The number of ships based here has dropped by about half, and some major fishing companies have gone broke.

Antarctic whiting and golden kingclip catches have dropped dramatically. Most of the Antarctic whiting now goes to Spain.

While many of the fishing boats have left, however, the city’s packing plants are doing better than ever because of an expanding business of salmon farming.

Salmon and trout teem in big net cages under raft frames that float on protected waters in numerous bays, coves and fiords in the region. The waters are cool and clean, labor costs are low and Chile has its own supply of fish meal and oil for feed.

Production of salmon and trout has grown from 50 tons to 30,000 tons in a decade, earning about $130 million in export revenue last year. The Chilean salmon-farming industry, now third in the world behind Norway’s and Scotland’s, is expected to produce 35,000 tons this year.

Chile’s main varieties are coho, Atlantic salmon and “salmon trout,” a rainbow trout adapted to the sea. Most of the coho and trout is shipped frozen or smoked to Japan, while most of the Atlantic salmon is flown fresh to the United States.

An overabundance of salmon on the world market and weak demand have brought prices down to about half their levels in 1986 and 1987. Today, frozen trout brings about $2.50 a pound FOB in Puerto Montt, and coho is a little more.

Because of ideal production conditions and low costs, the salmon industry here is still profitable, but investment has subsided, according to Simon Sandino, regional manager of the Chilean salmon producers’ association.

“The idea at the moment is not to increase production,” Sandino said. “The idea is to consolidate what we have.”

Sandino said future growth of Chilean salmon farming will depend on the recovery from recession in the United States and other consumer countries. Chile has plenty of room to grow.

Tomas Goldenberg, manager of the Frio Salmon farm west of Puerto Montt, predicts that a mass market eventually will develop for the tasty pink meat. “I think it will be like chicken,” Goldenberg said, “a fish for habitual consumption with relatively cheap prices.”

In an article this month in the trade magazine Fishing Chile, Manuel Achurra, a partner in the firm managed by Goldenberg, said Chile’s cultivated salmon is bringing better prices than wild salmon caught in Alaska because the Chilean fish has more uniform size and color and is damaged much less by handling.

Salmon farming was pioneered in this area by Fundacion Chile, a foundation formed by the Chilean government and ITT to developing export industries. The foundation is now experimenting in southern Chile with the cultivation of abalone and oysters and farther north with turbot, a fancy food fish similar to the flounder.

If successful, these projects will add to a cornucopia of Chilean ocean products that brought in $1.1 billion last year.

Hooked on Fish

CHILEAN EXPORTS OF FISHERY PRODUCTS

Chile has been exporting more fresh and frozen fish and cutting back on fish meal and oil sales.

1989 Total: 937,902,000 Meal: 55.2% Oil: 2.9% Frozen: 23.3% Canned: 9.3% Fresh: 5.6% Others: 4.1%

1990 Total: 916,571,000 Meal: 42.0% Oil: 1.6% Frozen: 30.0% Canned: 9.6% Fresh: 11.8% Others: 6.2%

The United States is Chile’s No. 3 ocean-export market after Japan and Spain.

(In million of dollars)

FROZEN: Shrimp: $5.5 Common whiting: $4.7 Swordfish: $3.9 Chilean king crab: $2.3 Coho salmon: $2.0 Kingclip: $1.6 Atlantic salmon: $1.4 Antarctic whiting: $1.1 Salmon trout: $1.0 Chilean sea bass: $0.7

CANNED: Jack mackerel: $6.7

FRESH: Atlantic salmon: $45.4 Swordfish: $35.7 Coho salmon: $3.0 Chilean sea bass: $1.2 Antarctic whiting: $0.5 Salmon trout: $0.5

SOURCE: Institute of Fishing Promotion, Chile