Gutted and Skinned Another Crisis in Fishing Rears Its Head
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FISHERY Gutted and skinned Another crisis in fishing rears its head. Is filleting the processing industry the answer? Ocean Choice International CEO Martin Sullivan contends there may not be a choice. By Denise Flint been called the worst crisis Tickle, Jackson’s Arm, Little Bay Islands, and Port Union plants, previously owned It’s to hit the fishing industry St. Bride’s, St. Lewis, Marystown and Port by Fishery Products International, were since the cod moratorium of the 1980s. Union. Another plant is scheduled to close part of that transaction. OCI is now one Immediately following the provincial in Burin in December 2012 and the future of the largest seafood quota holders in election last October, newly re-elected of a shuttered plant in La Scie is uncertain, the country with $250 million in sales of Newfoundland and Labrador Premier though the worst is expected. Provincial 100 million pounds of a large variety of Kathy Dunderdale said: “We have Minister of Fisheries and Aquaculture seafood species per year. The company overcapacity. We have structural problems Darin King has gone on record as saying markets to 35 countries around the world. in the fishery. Everybody is more than he believes Newfoundland and Labrador An external audit found that the aware and has been for a very long time could see as many as 20 per cent of its fish Marystown plant has lost $10 million over what the issues are.” processing plants close over the next five the last three years, making it completely Simply put, too many people are years. unsustainable. The plant in Port Union chasing too few fish. But, of course, The plants in Marystown and Port was badly damaged by Hurricane Igor putting it simply doesn’t really address Union are owned by Ocean Choice in 2010 and has been closed ever since what is actually a complex issue. Because International (OCI). OCI was formed in because of a double whammy of high it’s not just about catching fish. The 2000 and started with a crab processing repair costs and declining shrimp quotas other half of the equation concerns what plant in St. Lawrence. Since then it has (a 40 per cent reduction since 2008), Photo by: Paul Daly happens after the fish have been caught. steadily grown through one acquisition which would result in the plant operating Since December 2011 seven fish after another. It doubled in size when it for so few weeks a year that repairing and processing plants in the province have acquired the sales and licences of Fishery re-opening it wouldn’t be viable. Before toppled like dominoes, bringing real Products International in 2007 in a they were closed, the Marystown plant hardship to the communities of Black $158-million asset sale. The Marystown employed 240 people seasonally and the NR36 | Natural Resources Magazine | July/August 2012 Port Union plant, the small town’s only industry, States in the 1980s when cod was king, last year that employed 170 people. country only accounted for 25 per cent of their sales. The closings were particularly contentious. In And back in the ‘eighties, China wasn’t even on the January, OCI successfully sought a court injunction marketing radar. Now that country accounts for 20 against workers who were blocking access to the per cent of OCI’s market, a number that is expected Marystown plant and later in the month police were to rise for the foreseeable future. More wealth is called in to deal with the volatile situation. During being generated in Asia, which now accounts for the same period, OCI hired replacement workers 35 per cent of OCI’s sales, and people there are to crew the Newfoundland Lynx after unionized increasingly able to afford expensive food. While “ In Asia, fish is crewmembers were locked out in a labour dispute, China produces a lot of seafood there’s still plenty sold as a whole leading to harsh confrontations between the workers of room in the market for outside suppliers. Chinese and the company before the clash was settled. seafood imports increased from $3.9 million U.S. fish,” explains It’s kept OCI in the public eye for months as the in 2009 to $5 million U.S. in 2010. A recent report Sullivan. “It controversies play out. suggested that Chinese seafood consumption will shows the To OCI CEO Martin Sullivan, the problems the climb from its current average of 12 kilograms per fish is fresh company and the workers face can be squarely person to 36 kilograms per person by 2020. At the attributed to a disjunction between a traditional same time domestic seafood production is expected and of good way of operating and radically changed market to decline due to overfishing and alternate use of quality. They’re conditions. While union representatives contend coastal areas. All that adds up to opportunity and, very quality that the problem is that OCI is attempting to as Sullivan points out, they have an obligation as a outsource fish processing overseas, Sullivan argues company to chase the best markets. conscious and that the processing itself is the problem, no matter However, what the Asian market looks for in they’re willing where it’s done. If the industry is to remain viable, a product is materially different from what we’ve to pay good changes have to be made. become accustomed to in North America. While the money. They’re Only 10 per cent of OCI’s product is sold in Canadian and American market is mainly interested Canada. In fact, while the North American market in fillets and processed fish, China demands out-competing remains stable, the percentage sold here has something else. the rest of the changed dramatically. Sullivan says that whereas “In Asia, fish is sold as a whole fish,” explains market.” 70 to 80 per cent of fish was exported to the United Sullivan. “It shows the fish is fresh and of good BrenKir has provided quality safety and industrial products to the construction, offshore, and heavy industry for over 25 years. SERVICE is our #1 Priority Mount Pearl Marystown Long Harbour 709-368-4656 709-279-2238 709-228-2105 Safety [email protected] [email protected] [email protected] Industrial MRO Fire Janitorial Technical Services Gas Detection toll free - 1-888-295-9191 www.brenkir.com ™ partnered with Brenkir Ad Feb 13 2012.indd 1 Online extras: naturalresourcesmagazine.com2/13/2012 9:19:04 AM | NR37 quality. They’re very quality conscious and season ends. They will simply move on to in 500 to 600 hours in the plant, earning they’re willing to pay good money. They’re a different species or continue to process somewhere around $8,000 and then out-competing the rest of the market.” species that are harvested year round. collecting about $15,000 in employment And that’s one of the reasons plants are More work will be done at sea as fish are insurance benefits. It was never a lot of closing. As witnessed by the Marystown processed on board as soon as they’re money and now it’s simply not enough. numbers, the company cannot make caught. “It’s a real demographic problem,” says money selling processed redfish because This is another bone of contention with Sullivan. “There are no young people any gains are offset by high gas prices and labour leaders who see it as taking work coming into the plant because they don’t the high value of the Canadian dollar. away from land-based processing plants, want work that’s part-time and seasonal.” Sullivan believes the only viable but Sullivan insists, “What’s done on the In one of their plants in Prince Edward alternative is to move into a year-round vessel is what’s done on land. The labour is Island, outside workers were brought in 8 billion fishing industry rather than a seasonal the same whether on land or at sea.” because they couldn’t get seasonal local one. A lot of processing will still be done The reality of the labour force also factors workers. Multi-species processing plants on land, but plants will no longer process into the need for a new way of doing things. and at-sea processing would alleviate the barrels of potential one species and then close when the In the old model a typical worker would put problem of finding seasonal, temporary workers. Multi-species processing plants would also result in better incomes. “We need competitive wages to draw oil resources people into the industry,” says Sullivan. In December 2011, OCI tried to strike a deal with the provincial government to LET US export 75 per cent of its yellowtail flounder catch without landing it for processing. HELP YOU... In return the company would process the remainder of its quota, seven million pounds, at their plant in Fortune, doubling the workforce there to 110 and making St. John’s operations year round. Amid outcries that OCI was simply trying to find a way tel. 709.576.6667 to outsource processing overseas, the government turned them down and now Conception Bay South the future of the Fortune plant is on hold. tel. 709.834.6594 Meanwhile Sullivan says they’re forced ...TO BUY! to leave too many fish in the water and Bay Roberts if they don’t fish their quotas someone tel. 709.786.6687 ...TO SELL! else can come in and do so under the UN Convention on the Law of the Sea. Clarenville ...TO LEASE! “It’s not all bad news,” Sullivan tel.