The former Stinson cannery in Gouldsboro has become a symbol of economic frustration for many on the Schoodic Peninsula. After the last remaining sardine factory in the United States closed in 2010, it was bought by the Live Lobster Company and converted to a lobster processing facility with the backing of some $400,000 in public funds. A little over a year after the plant reopened, the facility was again shuttered when after Live Lobster defaulted on its loans from TD Bank. Some 70 local residents lost their jobs with the closure.
But this September, the plant was sold at auction to two buyers, the Groton, Connecticut-based Garbo Lobster Company and East Coast Seafood, based in Lynn, Massachusetts. The sale holds promise for the local economy and the Maine lobster industry, say seafood analysts and local officials. Whereas concerns swirled around the 2011 sale of the facility, many view the two seafood companies’ purchase of the plant as a good omen for the future of seafood processing on the peninsula.
Gouldsboro selectman Roger Bowen is optimistic about the sale. He said the plant’s buyers have projected to process between three million and five million pounds of lobster and employ some 80 people in 2013. Bowen feels such a goal is realistic.
“That’s fairly aggressive, but I think it’s doable,” said Bowen. “Garbo Lobster and their partners have an outstanding reputation. They’re experienced, they’ve done this before and they come into this with their eyes wide open.”
Garbo Lobster did not return calls seeking comment, but East Coast Seafood President and CEO Mike Tourkistas said the goal is to have a business plan in place for the plant by the first quarter of the coming year and to be operational by the second quarter.
The optimism surrounding the sale of the plant centers around the solid reputation of the two buyers, said Neal Workman, founder of the Fisheries Exchange, a Biddeford seafood industry analysis firm.
“They are far more qualified than their predecessor,” Workman said.
It’s a complex business to run a successful lobster-processing facility, Workman said. Anyone who wants to try their hand at lobster processing must have access to a vast amount of capital, as the business model requires paying for lobster daily, while being paid monthly for the finished product.
“You have to buy half a million dollars of raw material every week,” Workman said.
That buying has to be done carefully, he said. The wasted costs of processing inferior-quality lobster can add up to drive a company into the red. And having worldwide marketing reach is essential, he said.
The pairing of East Coast Seafood and Garbo Lobster is a perfect match, said Dr. Robert Bayer of the Lobster Institute at the University of Maine. East Coast Seafood is the largest lobster processor in the world, with processing experience in the Canadian Maritimes. It’s also part of the AHI Group, a corporation with a worldwide marketing reach. Garbo lacks the same level of processing experience, but it is well-established in the East Coast and the Canadian Maritimes as a premier lobster buyer.
“If there could be a perfect combination, this is it,” Bayer said. “They will succeed; I don’t have any doubt about it.”
The collaborative effort between the two companies took some observers by surprise; it’s as if Coke and Pepsi launched a joint venture. The two companies are considered rivals for market-share of the lobster industry. Workman said the collaboration is an attempt by the two seafood companies to control the vagaries of the seafood industry by controlling more of the sea-to-plate supply chain. The lobster industry has been buffeted by swings in prices and supplies in recent years.
“Seafood, as an industry, is the last food we hunt for,” Workman said. “You can imagine what that does to the price.”
Tourkistas of East Coast Seafood said the collaboration between the two companies will reduce overlap and avoid waste, saving money for both companies in the long run. East Coast Seafood is also working with industry stakeholders like the Lobster Institute and the Atlantic Lobster Sustainability Foundation in New Brunswick. Such cooperation is needed as the seafood industry tries to chart a course for the future, he said.
“Without some cooperation in the industry, we will not be able to solve some of the issues affecting us,” Tourkistas said.
Craig Idlebrook is a freelance writer living in Medford, Mass.