Seafood processor closes plants in Newfoundland, Labrador

St. John’s, Nfld. – Ocean Choice International (OCI) has announced that it is closing two of its operations, which have been idle for the past few months.

OCI’s operations in Marystown and Port Union are closing effective immediately. But the company says it will be investing $5 million next year in its facilities in Bonavista, Port aux Choix, Triton, St. Lawrence and Fortune, as well as its fleet, as part of its normal operations, reports theFishSite.com.

The company adds that if there is a successful conclusion to restructuring of the flatfish industry it will invest an additional $10 million in a new vessel.

Marystown plant

The SouthernGazette.ca reports that Deloitte & Touche LLP had confirmed operating losses at the Marystown plant since 2004. In fact, Deloitte & Touche reported losses totalling more than $10 million in just the past three years.

The review by Deloitte & Touche, which was contracted to do the report by the Department of Fisheries and Aquaculture, also looked at the historical operation of the plant and opportunities available to the company to improve sustainability and profitability.

The main causes for the losses since 2008, reports the SouthernGazette.ca, include fluctuations in the foreign (U.S. dollar) exchange rate and high fuel costs; and an increase in selling expenses, cost of sales, increases in overhead and a decrease in other income.

Port Union plant

The shrimp processing plant in Port Union, reports theIndependent.ca, has been closed since the fall of 2010 after it sustained severe damage during Hurricane Igor. The site says rumours had been circulating that the company would not reopen that site. Also, lower shrimp quotas and availability at other Newfoundland plants possibly made the plant redundant.

Issues

TheIndependent.ca also reports that OCI’s CEO, Martin Sullivan, has been outspoken about the industry, saying that while market requirements are changing with growing demand worldwide, minimum processing requirements in Newfoundland and Labrador are hampering OCI.

At the same time, the company has been shipping raw fish abroad for processing while having to lay off employees back home. But OCI says that move is a reflection of today’s market where customers aren’t looking for as much filleted product as before.

About 240 people will be affected by the closure at Marystown and 170 worked at the Port Union site, reports the CBC.ca.

The announcements of the closures were enough to open the house of assembly, says the CBC.ca. The closures are the most significant development in Newfoundland and Labrador’s fishery in years.