The sale of Newfoundland’s largest seafood company (WWF June 2007) was approved finally at a much-delayed annual meeting of shareholders, clearing the way for a division of the company’s assets between two Canadian processors.
The Oct. 22 vote by shareholders to approve the sale of the assets of Fishery Products International, Ltd. (FPI) of St. John’s, NL to Ocean Choice International LP, also of St. John’s, and High Liner Foods Inc. of Lunenberg, Nova Scotia, was unanimous. The meeting, originally slated for August, had been postponed twice while negotiators reached agreement between FPI’s board, the two purchasing companies and the provincial government.
“The sale of FPI … will be a major step forward in strengthening the seafood-processing industry in this province,” said Newfoundland and Labrador Premier Danny Williams. The final transactions should be completed by the end of 2007.
Newfoundland has been under pressure for several years to streamline its seafood industry. After the collapse of the cod fishery in 1992, previously ignored but high-priced crab replaced the income but not the volume provided by cod.
Many groundfishermen in remote outports did not have access to crab fishing grounds and many groundfish plants were idled, some permanently. When crab stocks were reduced and Alaskan crab stocks rebounded, dropping prices, Newfoundland fisheries and fishing communities were stressed again.
Once considered “the employer of last resort,” fisheries no longer sustain many communities, meaning some outports have been abandoned due to a lack of work. Newfoundlanders have been leaving the island for mainland manufacturing jobs, or moving to the capital city of St. John’s, where offshore oil companies have boosted the city economy.
High Liner, formerly known as National Sea Products, operates a large secondary processing plant in Portsmouth, N.H. and operated a plant in Rockland, Maine for many years. High Liner will acquire the Danvers, Mass., marketing arm of FPI, which is also a processor of high-quality foodservice and retail products employing hundreds of people, as well as its Newfoundland-based secondary processing plants.
Ocean Choice (OCI), a privately held company, is a member of the Penney Group formed in 2000 as parent company for a number of Newfoundland fisheries companies. OCI, a major processor of snow crab, lobster, Northern shrimp, pelagics, cod, redfish turbot and mussels, purchased FPI’s harvesting licenses, vessels, groundfish quotas, offshore scallop, shrimp and turbot businesses, overseas sales offices, primary processing plants and other associated businesses.
Since FPI was created out of a group of failed small processors by provincial and federal government funding, the company has always been governed by a provincial law, the FPI Act, which controls the sale of its assets. In agreements with the provincial government, High Liner has guaranteed to keep open an embattled secondary processing plant in Burin that employs 200 workers. OCI promised to keep open for at least five years primary processing factories employing 1,300 people in Port aux Choix, Triton, Bonavista, Port Union, Marystown and South Dildo.
In mid-November, High Liner reported sales increases of 7.4 percent and growth in Canadian operations of 11.6 percent and increased profits. Meanwhile, FPI reported higher net income for third quarter sales, up to $37.8 million compared to $3.7 million for the same period in 2006. FPI attributes the strong profits to a reduction of low margin products and the sale last August of FPI’s UK operation, Seafood Company Ltd.