NLIS 3
Aug. 24, 2005
(Fisheries and Aquaculture)
(Innovation, Trade and Rural Development)
Government supports aquaculture
development on Connaigre Peninsula
Fisheries and Aquaculture Minister Trevor Taylor
and Kathy Dunderdale, Minister of Innovation, Trade and Rural Development and
Minister responsible for the Rural Secretariat, today announced that Natures Sea
Farms Inc., a subsidiary of the Barry Group Inc., is the first company to
qualify for a working capital loan guarantee under a new provincial program
designed to assist in the development of the province�s salmonid aquaculture
industry.
�Aquaculture offers opportunity and hope for rural communities devastated by the
decline of the wild fisheries. We will do everything we can as a government to
help people and communities capture those opportunities,� Minister Taylor said.
�This province has the capacity to be the largest producer of aquaculture
products in Canada. With less than 10 per cent of aquaculture space currently
being utilized, we are committed to developing this industry for the benefit of
our rural communities.�
Natures Sea Farms Inc. has reached a tentative purchase and sale agreement to
acquire the assets of North Atlantic Sea Farms Corporation., which is currently
in receivership. Receivers Ernst & Young have been operating the facility since
October 2004. The loan guarantee being provided under the Aquaculture Working
Capital Loan Guarantee Initiative is contingent on the sale being concluded with
the receiver. The receiver requires court approval to finalize the sale.
�This arrangement will help ensure the long-term viability of aquaculture
operations on the Connaigre Peninsula and in the Bay d�Espoir area, and ensure
the continued employment of over 100 residents with the operation. Our
government committed to finding long-term solutions to problems facing the
Connaigre Peninsula region, especially in light of the recent difficulties in
Harbour Breton, and today�s announcement demonstrates our faith in the future of
that area,� Minister Taylor said. �This initiative was established last fall in
recognition of the importance of the aquaculture industry to rural economies and
the significant upfront operating costs involved in its development. We are
encouraged to see the traditional seafood sector take the initiative to move in
to grow the aquaculture industry in the province.�
The operation consists of a salmon hatchery and aquaculture operations in the
Pool's Cove and Bay d'Espoir/Gaultois Passage areas, as well as a fish
processing plant in St. Alban's. Government has reached an agreement with
Natures Sea Farms Inc. that will see the new owners invest $1 million upfront in
the operation. Government is prepared to guarantee 80 per cent of a maximum $9
million line of credit, after the bank has realized on its security. The company
must also finalize their banking arrangements.
Natures Sea Farms Inc. announced this morning that they reached a purchase and
sale agreement with the receivers, pending court approval. �We are impressed by
the regulatory environment established to support the orderly development of
finfish aquaculture on the south coast of the province, and we wish to build
upon the established base,� said Bill Barry, president of Barry Group Inc. �We
want to acknowledge the support being provided by the province to make this
transition possible through its new Aquaculture Working Capital Loan Guarantee
Initiative.�
�With the assistance government is providing by way of a loan guarantee, we are
confident the aquaculture industry has a strong future on the Connaigre
Peninsula and Bay d�Espoir regions,� Minister Dunderdale said. �We are committed
to developing and supporting the aquaculture industry in this province for the
benefit of our coastal communities and rural economy, and to creating an
environment in which this industry can grow and flourish.�
The parent company of Natures Sea Farms Inc. has managed aquaculture operations
in the United States and has successful fishing enterprises in Newfoundland and
Labrador and other Atlantic Provinces. A significant upfront investment is
required in aquaculture operations to grow the product and get it into the
marketplace. Feed comprises 70 per cent of the operating costs, making it
crucial for industry to have access to financing at reasonable rates. Typically,
a salmonid enterprise requires $2 to $3 million in capital funding and access to
up to $8 to $10 million in working capital, depending on the size of the
operation.
The Aquaculture Working Capital Loan Guarantee Initiative is available to
companies that can demonstrate strength in all aspects of their business,
including their ability to grow and sell fish and turn a profit. To qualify for
support under the initiative, companies must meet eligibility requirements
satisfactory to the province.
�The loan guarantee government is providing to Natures Sea Farms Inc. is not
just an investment in one business. It is an investment in a growing sector of
the province and it is an investment in the Connaigre Peninsula and Bay d�Espoir
areas,� Minister Dunderdale said.
Media contact:
Tracy Barron, Fisheries and Aquaculture, (709) 729-3733, 690-6157
Lynn Evans, Innnovation, Trade and Rural Development, (709) 729-4570, 690-6290
2005 08 24
10:35 a.m. |