High Liner facilities located in Burin and Denver are the ones that will be closed. (Photo: Stock File/FIS)

High Liner shuts down two facilities

CANADA
Friday, May 04, 2012, 23:40 (GMT + 9)

High Liner Foods Incorporated has announced that it will be consolidating its North American supply chain due to overcapacity at various plants and last December’s acquisition of a more modern facility in Newport News, Virginia.

Located in Burin, Newfoundland and Labrador (NL), and Danvers, Massachusetts, the two affected facilities are the company’s most costly and underused.

Henry Demone, CEO, acknowledged that the change would be very difficult for 300 of High Liner’s employees and their families, as most of these workers will be leaving High Liner later this year or in early 2013 as a result of this decision.

“High Liner Foods has grown through three recent acquisitions, and many of High Liner’s plants are operating below capacity. High Liner Foods operates in a very competitive North American market with price-sensitive consumers, and we must be cost-efficient to remain competitive. Despite our growth, the reality is that we only need four North American plants to supply our customers,” he said.

The Burin plant, with 121 full-time employees, will close by the end of December 2012. A small product development office in St John’s, NL, will also close at the end of 2012.

High Liner said all commitments made to the Government of NL in 2007 as part of the purchase agreement of the Fishery Products International assets will be respected.

The plant in Danvers, which employs more than 160 people, will remain open until the first quarter of 2013.

The president of the Fish, Food and Allied Workers (FFAW) union representing the workers, Earle McCurdy, said the closure in NL represents a “major blow to the area,” The Chronicle Herald reports.

“I think the people there are essentially victims of globalization. It’s not a matter of an unprofitable company being unable to continue; it’s a matter of finding greener pastures elsewhere, and the people who helped them get to where they are end up being left behind,” he stated.

NL Fisheries Minister Darin King said he was sad and disappointed to hear that Burin’s fish plant would be shut down. But he acknowledged that the exchange rate has changed, fuel prices are higher and it is no longer so profitable for the company to stay, VOCM reports.

The annual ongoing pre-tax reduction in operating costs (which represents an increase in earnings before interest, taxes, depreciation and amortization, or EBITDA) resulting from this consolidation, once all the affected plants are closed, is estimated to be roughly CAD 9.6 million (USD 9.7 million), with savings scheduled to begin next January.

By Natalia Real
editorial@fis.com
www.fis.com

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