St. Anthony Seafoods won't operate this season
This is a fish story like few others.
The players include a Halifax company and its Newfoundland partner that want to run a fish plant, a Greenland government-owned company that wants a piece of it and the owner of three other Newfoundland plants the Greenland outfit hopes to buy.
Stuck in the middle are more than 100 fish plant workers in St. Anthony, N.L., who will lose a season’s work while it is all being sorted out.
Let’s start there.
Clearwater Seafoods and St. Anthony Basin Resources Inc. (SABRI) are partners in St. Anthony Seafoods. But SABRI, a non-profit economic development group, wants out.
The mission statement of SABRI is: To administer a 3000 metric tonne allocation of Northern Shrimp on behalf of the communities from Big Brook to Goose Cove, in a manner resulting in expansion of the region’s economic base and improved employment opportunities.
SABRI is made up of committees, each one focused on individual projects. Over the years this group has intiated projects revolving around fisheries development, local port development and regional history and folklore.
A Snow Crab processing plant was also built and went into production in May 2005. St. Anthony Seafoods employs 200-215 people each year. St. Anthony Seafoods also operates three cold storage facilities capable of holding three million pounds of product.
It applied to the province’s Fish Processing Licencing Board in March for permission to transfer SABRI’s 25 percent of the company to Quin-Sea-Royal Greenland.
Royal Greenland, owned by the Government of Greenland, already has a presence in Newfoundland and Labrador, thanks to the province’s 2016 decision allowing it to purchase Quin-Sea.
Christine Penney, vice-president of sustainability and public affairs at Clearwater, said approval of the change of ownership for the St. Anthony plant would have meant more stability and job security.
St. Anthony Seafoods has mainly been a shrimp processing operation, she said, but declining shrimp stocks in the past few years have affected the seasonal operation. Bringing in Quin-Sea-Royal Greenland as a partner would bring with it more raw material for the plant to process.
The application to flip SABRI’s share was submitted to the licensing board on March 24. However, the board held back on a decision, citing COVID-19 as one reason.
But the bigger wrench in the gears relates to another application before the board, one that proposes the sale of another major fish processing company, Quinlan Brothers, to Royal Greenland.
Quin-Sea became a part of Royal Greenland A/S in 2015.
Headquartered in Nuuk, the capital of Greenland.
Company is wholly owned by the Government of Greenland.
In 2019 the company employed 2,200 people around the world, with 1,432 in Greenland, 199 in Denmark and 569 in other countries.
Through its “North Atlantic Champion” strategy, Royal Greenland's goal is to be the world's leading supplier of seafood wild-caught in the North Atlantic, primarily cold-water prawns, Greenland halibut and snow crab.
Royal Greenland presented a record profit before tax
of DKK 404 million ($81.97 million CAD) for 2019, according to the company’s annual financial report for that year.
Via Quin-Sea Fisheries, Royal Greenland owns six
factories in Newfoundland.
The main activity in Newfoundland is snow crab and
prawn, while there is also production of sea cucumber,
cod, halibut, lobster and pelagic species.
In Quebec the Group runs a processing plant for cooked and peeled prawn and crab.
"There is intense competition for the raw material, as a consequence of excess factory capacity," the company noted in its annual report for 2019. "After the establishment of the
crab line, the activity has increased, and it has been necessary to bring in manpower from Mexico."
In Nova Scotia, a crab factory is operated under the
auspices of A&L Seafoods.
A total of 21,500 tonnes of raw material was landed at the company's the factories in Atlantic Canada in 2019.
The company currently employs about 500 people at two processing plants in Bay de Verde and Old Perlican.
In 2016 a fire destoyed the plant in Bay de Verde. The company rebuilt and the new processing facility was opened in April 2017.
According to information on its website, Quinlan Brothers was the first to produce frozen brine crab sections for export to the US market in 1992, now the mainstay of the crab sector in Newfoundland.
“Since then we have grown to be the largest processor of Canadian Snow Crab globally, processing almost five thousand tonnes of finished product annually.”
Quinlan Brothers also owned a shrimp processing plant in Black Duck Cove in a joint venture with Quin-Sea. That plant, operating as Gulf Shrimp Ltd., employed about 50 people. It burned down in 2019.
On April 3, Quinlan Brothers submitted an application for change of ownership of its operations at Bay de Verde, Old Perlican and Baie Verte to Royal Greenland.
If the Quinlan Brothers sale is approved, Royal Greenland will add three more Newfoundland processing plants to its assets in the province.
In an e-mail response to questions, a spokesperson for the provincial fisheries department and the licensing board said:
“The board decided that in light of the public announcement that Quinlan Brothers Ltd. is being tentatively sold to Royal Greenland, it would prefer to hear both applications at the same time and was not prepared to hear one in absence of the other.
“No time frame has yet been set for another meeting due to current COVID-19 restrictions.”
Meanwhile, the federal government has sounded a warning bell over foreign takeovers of Canadian companies during the pandemic.
In a post on its website on April 18, the Government of Canada stated it will subject certain foreign investments to enhanced scrutiny under the Investment Canada Act.
“Many Canadian businesses have recently seen their valuations decline as a result of the pandemic, consistent with patterns in other major economies. These sudden declines in valuations could lead to opportunistic investment behaviour.
“Foreign direct investment is essential in ensuring that Canadian businesses are able to invest in innovation and to compete in the global economy. The current circumstances, however, are unique.”
Clearwater’s Penney said that with no indication of when a decision on the St. Anthony Seafoods application would be made, Clearwater decided it could not operate the plant this year.
“We were certainly pushing for an expeditious process and we were doing some prep work behind the scenes to prepare the plant for operation this season,” she said, but, “the process could not be completed in a timeframe to allow us to operate.”
She said Clearwater was “really proud to present the new joint venture as a solution for St. Anthony. The joint venture with Quin-Sea would have brought more species into the plant, increasing volume and diversity of species mix.”
While the plant won’t open this season, Penney said the joint venture can move ahead for 2021.
“We are really hopeful the licensing board process can be completed by the fall of this year.”
While this tangly tale of business and politics spins out, the people who used to work at St. Anthony Seafoods are facing a season with no income.
The local business community is concerned.
Chamber of commerce president Nolan Pelley said the economy of Newfoundland’s Great Northern Peninsula is being hammered, and not just by the plant closure.
Tourism is shut down, he said, and except for the local hospital, the fish plant was the main employer in the town.
“For most of the workers, their employment insurance claims have run out or are close to running out,” he said, and the federal emergency response fund for workers affected by COVID-19 is only for 16 weeks. That won’t get plant workers through to the next processing season.
“We feel the decision could’ve been made and should’ve been made . . . and this plant could’ve been ready and operational for this season,” Pelley said.
The business community is fully in favour of the change of ownership, he said.
“The fact is we are living in a world when we depend on foreign investments in our country, that’s the bottom line,” said Pelley.
Most workers are holding out hope for a government program to help.
Meanwhile, shrimp landed by local fishermen will be trucked down the road and processed elsewhere while workers in St. Anthony face a long jobless summer.
St. Anthony Basin Resources Inc. timeline
1997 - St. Anthony Basin Resources Inc. (SABRI) formed
Fisheries and Oceans Minister Fred Mifflin announces allocation of 3000 metric tonnes of Northern shrimp for the region, to aid local communities impacted by the moratorium on northern cod. SABRI distributed parts of its 3,000 tonne quota to several offshore companies on a royalty basis, collecting about $1.7 million in royalty fees for 1997 allocation.
1998 -SABRI enters into a 15-year agreement with Clearwater Fine Foods of Nova Scotia, after putting out a call for proposals. The main parts of the agreement are that Clearwater will harvest the quota in return for royalties, and it will partner with SABRI to establish a multi-species fish plant in St. Anthony.
2003 - Quinlan Brothers buys shrimp processing plant in Black Duck Cove, Gulf Shrimp Ltd., in a joint venture with Quin-Sea.
2012 - SABRI and Clearwater negotiate a new harvesting contract for the 3000 mt of shrimp, for a 10-year term beginning in 2013, following the expiration of the original 15-year (1998-2013) contract.
2015 - Government of Newfoundland and Labrador approves sale and transfer of ownership of Quin-Sea Ltd. to Royal Greenland, a company owned by the Government of Greenland. A fish processing plant at Black Duck Cove, Great Northern Peninsula, is part of the sale.
2019, May - Fish plant owned by Gulf Shrimp Ltd. burns in Black Duck Cove.
2020, January - Clearwater Seafoods and Quin-Sea Fisheries/Royal Greenland announce they have an agreement for a joint venture for operation of St. Anthony Seafoods.
2020, February - Gulf Shrimp Ltd. announces it will not rebuild the Black Duck Cove plant.
2020, March - Clearwater announces company will undergo a strategic review, which could include possible sale of part, or all, of the business.
2020, March - Quinlan Brothers Ltd. announce proposed sale of their company to Royal Greenland.
2020, March 24 - St. Anthony Seafoods Ltd. applies to Fish Processing Licensing Board of NL for change of operator primary licence. Licensing board defers decision due to COVID-19.
2020, April 3 - Quinlan Brothers Ltd. applies to Fish Processing Licencing Board of NL for change of operator-primary licence for its operations at Bay de Verde, Old Perlican and Baie Verte. Board defers decision citing COVID-19 concerns.
2020, April - Clearwater decides it will not operate St. Anthony Seafoods shrimp processing plant for the 2020 season.