The Port Union shrimp plant will have a for sale sign on it in the coming weeks, Ocean Choice International’s (OCI) chief operating officer Blaine Sullivan told Trinity Bay North council last week.
Sullivan came to Port Union to discuss the company’s plan and to walk through the plant.
Following the meeting, Sullivan told The Packet that even though it’s difficult seeing the plant closed, the meeting was very professional and included interesting conversation.
Sullivan said a reduction in the shrimp quota had to bring about change.
Whether or not hurricane Igor ravaged the plant in 2010, he felt a decision would have to be made on keeping both Port Union and Port au Choix plants open.
Sullivan said council was informed of the company’s intent to sell and the town should get active with other potential operators.
He doesn’t see it selling as a shrimp plant, though.
“There is overcapacity in the shrimp plants in the province now,” he said.
In 2008, Sullivan said, inshore landings were about 174 million pounds, and in 2011 the quota had been reduced to 107 million pounds.
“We don’t see anybody buying it as a shrimp plant as it stands now,” he said. “You look at the studies that were done on the shrimp, it takes 8,000 tonnes of shrimp to make a plant viable and there’s only 45,000, tonnes of shrimp, 50,000 at the most, to be landed next year. So really, even with this plant out of the system there are too many shrimp plants left in Newfoundland and we believe there will be other closures in the coming year.”
Even if the plant were to work with multiple species, Sullivan still doesn’t see it working out.
“There’s just no other species available now to make it viable. You look at the other plants (within the province) and they’re working 14 or 15 weeks for most part,” he said. “It’s is not related to the plant size, but related to the season and available product. Even the ones out there now, there’s not enough work for those people.”
“Most likely we’ll be selling the equipment separately. We will be offering it all for sale.”
Following the walkthrough, Sullivan noted the company spent “around a couple million dollars” in plant repairs following the storm, and the building is in reasonably good condition.
Not all of the insurance money went back into the building though.
“Like any business or loan, even your personal car, if you have an insurance claim, any money left over, which was relatively small compared to the value of the business there, is gone back to the lender, the bank,” he said.
But Sullivan said some minor work could be done.
“There’s a few things, a drain to clear, some cleanup work around the site, some more roof repair and siding repair. The bulk of the work is done and we’ll do the rest after the winter.”
TBN mayor Brendan Peters said after the walkthrough that the building wasn’t in as bad shape as initially thought. However, he did say some things need to be addressed.
Peters said rusty tanks have to be cleaned up, broken fencing has to be removed from the brook, and the grounds need to be brought up to a standard.
According to Peters, Sullivan assured council it would be looked after.
But any chance of reopening is gone.
“They told us (last week) that’s it. They’re not coming back here any more, and we knew that,” Peters said.
OCI told the council the company has a consultant hired to sell both Port Union and Marystown plants, according to Peters.
“Hopefully we can get a buyer,” he said. “I don’t care where they’re from as long as they can employ 150 people.”
As for OCI working with government and the Fish Food and Allied Workers Union to help in assisting the plant workers, Sullivan said there has been communication but not for some time.
“There hasn’t been a followup meeting since before Christmas and that’s certainly a concern for council,” Sullivan said.
Meanwhile, Peters said council will continue discussions with Bonavista South MHA Glen Little, to see what can be done to find a new, main source of employment for the town; not just people affected by the closure.
He noted that government helped out when the Abitibi paper mill closed down in Grand Falls-Windsor, and they would like similar help.