OCI restructures its operation to remain competitive in global marketplace
December 2, 2011
Martin Sullivan, President and CEO of Ocean Choice International (OCI), today
announced changes to the company’s operations in Newfoundland and Labrador to ensure a viable
and competitive company for the future. OCI will permanently close two of its operations in
Marystown and Port Union effective immediately, and will invest in excess of $5 million in 2012 in its
facilities in Bonavista, Port aux Choix, Triton, St. Lawrence and Fortune, as well as its fleet, as part
of its normal operations. If there is a successful conclusion to restructuring of the flatfish business
there will be an additional $10 million invested in a new vessel. These investments come on top of
$30 million invested in the company’s plants and vessels since 2008.
“Most of the stakeholders in the fishing industry have recognized the need for rationalization of our
sector for many years now,” said Sullivan. “Although parties have attempted to find solutions, as
recently as through the MOU process on restructuring the NL fishery, a resolution has not been
forthcoming. OCI has always been prepared to work with others in the industry, governments and
unions in an effort to restructure the sector; however, in the wake of continued challenges, it has no
choice but to realign its operations today.”
An external audit confirmed recently that there is no viable option for OCI in relation to its
Marystown operation. The only option that showed at least a marginal profit was the export of 100
per cent of the Yellowtail flounder.
OCI said that the pressure of fluctuations in foreign exchange rates and fuel costs, as well as
increases in expenses and overhead, have put the Marystown operation in the financial loss
position it has been in for years. Because of these factors beyond its control, OCI has permanently
closed the operation today. About 240 employees are affected.
OCI will now pursue the two other options outlined in the Deloitte report, namely:
1) catching and processing at sea which is proven to be the only viable option as verified by
2) transitioning Fortune to a multi-species year-round groundfish processing plant. Although this
option is currently not projected to be profitable it would mean 110 year-round jobs which,
combined with the jobs at sea, would mean a higher overall payroll to our employees than
experienced in the Marystown plant and on the vessels in the past.
The operation in Port Union has relied on the success of the shrimp fishery for the past decade.
What was once a good operation has been sorely impacted by circumstances beyond OCI’s control
with a 40 per cent reduction in shrimp catches in the past three years, and further cuts announced
for next year. In a devastating turn of circumstances, the plant was also rendered inoperable for the
past year due to damage arising from Hurricane Igor in September 2010. About 170 employees are
Sustainability for the future
OCI has made numerous investments in the company in recent years, and established a worldwide
marketing and sales network in over 35 countries around the world. The success of the company in
the future will rely heavily on the company’s ability to respond to market demands, and to adjust to
changing economic conditions.
“Two key considerations as we move forward are the necessity for government to lift current
restrictions on the fishing sector in relation to minimum processing requirements and export of fish
products, as well as the understanding by everyone that market demands have changed,” said
Sullivan. “What used to be a huge market for filleted fish has diminished greatly. Today, the
demand in our growth markets in Asia and elsewhere is for whole fish, or headed and gutted fish.”
Sullivan said restrictions on the export of Redfish alone are leaving some $35 million annually out of
the provincial economy. Meanwhile, when restrictions were lifted on snow crab, the fisher prices
increased in value by 300 per cent on average, with a 500 per cent increase in the past year.
OCI said today that it is committed to the regions in which it currently operates. In the coming days
we will meet with towns and unions in an effort to define growth plans for the future. We will
continue to employ hundreds of people in Newfoundland and Labrador as one of the largest private
“While we are disheartened today by the unfortunate impacts of our restructuring on the people of
Marystown and Port Union, we know that we have made a responsible decision to ensure that our
business will continue to return to the people of the entire province a sustainable industry for the
future,” Sullivan said. “We intend to work closely with government on labor force adjustment
programs to seek solutions to transition our workers in a respectful manner.”
OCI took the opportunity on announcing its realignment of operations to encourage younger
workers to strongly consider a future in the fishery of Newfoundland and Labrador, a fishery that will
be akin to what many have become accustomed to in this province with a few weeks offshore
combined with a few weeks onshore. “The fishery of the future will have improved economic value
for our workers, and a greater value for the province,” said Sullivan.