Once, not that long ago at all, there were two big publicly traded fishing companies at work in Atlantic Canada - Fishery Products International and National Sea Products.
Now, one (National Sea, now High Liner Foods) is a fisheries behemoth, and just about the only news you hear about FPI is how its scattered, sold and failing individual plants and assets are losing money. And about how the new owners of those assets want to ship more and more fish away for foreign processing.
Years ago, seeing the state of the Atlantic fishery, High Liner moved away from its roots as a fish harvester, got out of trawling and into secondary processing and seafood marketing: when the time was right, when FPI was being harvested itself, High Liner even took over FPI's profitable U.S. marketing arm and operations, an asset that has continued to pay big dividends. It moved strongly into secondary processing, sourcing fish globally and building Canada's most recognizable seafood brand.
Here, what we hear now is that buyers want their fish virtually whole, and that secondary processing is not really feasible. We're sticking with the bottom building block in an industry that has shown over and over again that vertical integration and distribution is the way to make real money.
Last week, in its second quartely report since gobbling up Icelandic USA as well, High Liner marked a year-over-year sales growth of 43 per cent to $219 million, firmly ensconced as one of the leaders in the seafood business in North America. In addition to FPI's operations, High Liner took over one of its competitors in the U.S. market, Viking, and last year took over the Icelandic Group's Asian and North American operations.
True, as a result of its latest expansion, High Liner is closing its Burin plant, citing overcapacity. But even that closure shows something about how well High Liner has been doing on its balance sheet: the overcapacity was the result of taking over a more modern plant in Newport News, Va. (Burin and a plant in Danvers, Mass., which is also closing, were cited as High Liner's highest-cost and least-used plants.)
And High Liner has been doing well enough to pay the Newfoundland government a healthy amount because it wasn't processing fish in Burin.
Buried deep in the quarterly results is information that says High Liner has been paying seven cents a pound for the fish it doesn't process. Here's the section in question: "As part of the FPI acquisition in 2007, the company entered into an agreement with the province of Newfoundland and Labrador with respect to its operations in Burin, Newfoundland, and relating to its U.S. operations. The company has agreed to maintain specified volumes of production in the plant until December 2012. Failure to maintain these volumes will result in a payment to the province of Newfoundland and Labrador of $0.07 per pound for each pound of volume shortfall. ... In fiscal 2011 and 2010, the company paid $0.7 million in each year (relating to the production shortfall). The company will continue to pay the volume penalty for the full term."
High Liner is in the midst of digesting its latest takeover meal, trimming costs in an effort to find operating efficiencies and dealing with what has become an even larger operation. From Lunenburg, N.S., it now has truly global reach.
Here's another section of the quarterly report: "We buy as much as $600 million of seafood, packaging, flour or corn based coatings, and cooking oils. Seafood and other food inputs markets are global with values expressed in U.S. dollars. We buy 30 species of seafood from 20 countries around the world."
It's doing all that with singular attention to strong branding: ironically, one of its strongest U.S. brands is the FPI brand for supplying fish and fish products to U.S. restaurants and institutions.
The other places you see the FPI name and logo? Occasionally, on weathered signs near one of the company's former assets. or, ghost-like, on the side of a repainted vessel or two.
Is there money to be made in the Atlantic fishery?
It's not unfair to say that the fishing industry in this province was dealt a significant blow by the way FPI was broken up, and by the relative success of the pieces that stayed under control in this province and the pieces that didn't.
What did this province have? Brand recognition on a truly international level, the opportunity to bundle much of this province's fish products under that label and a marketing arm with the experience and track record to get that product to market and sold at top-end prices.
A truly profitably but slippery fish slid through our fingers.
And maybe, just maybe, it's possible to look at High Liner and imagine what might have been.
Russell Wangersky is The Telegram's editorial page editor. Email: email@example.com.