Fisheries and Aquaculture
March 11, 2016

Diversifying the Provincial Seafood Industry

Minister Approves Change of Operator Applications Related to the Sale of Quin-Sea Fisheries

The Honourable Steve Crocker, Minister of Fisheries and Aquaculture, has accepted the recommendation of the Fish Processing Licensing Board to approve the fish processing licence change of operator applications related to the purchase of Quin-Sea Fisheries by Royal Greenland.

"Royal Greenland submitted a solid business plan and, after careful consideration, the independent Fish Processing Licensing Board recommended approval of the change of operator applications. After conducting my own due diligence including : meeting with Quin-Sea, Royal Greenland and several other key stakeholders; and reviewing the business plan and purchase and sale agreement, I have accepted the board's recommendation and approved the change of operator applications allowing the sale to proceed. Royal Greenland brings with it a wealth of experience with onshore fish processing and international marketing, and its participation in our processing sector will help diversify our province's seafood industry."
- The Honourable Steve Crocker, Minister of Fisheries and Aquaculture

The independent Fish Processing Licensing Board process allowed for public and stakeholder questions and input which the board considered in making its recommendation. In addition to the independent board process, the minister and government officials conducted extensive due diligence relating to this transaction.

Questions and concerns raised publicly, or in submissions to the licensing board and Provincial Government regarding the change of operator applications, were considered by the minister and officials and the applications clearly met all established criteria. Further information on a number of these topics is outlined in the attached backgrounder.

"Royal Greenland is committed to investing in Newfoundland and Labrador to transform locally harvested seafood into the highest quality product for our international markets. Our plan is to build upon this well-established, successful business, including operation of its plants and employment of its people. The combination of Quin-Sea's reputation for species diversification and production of top quality products, and Royal Greenland's experience in extracting top value for such products, will bring new opportunities to the province."
- Mikael Thinghuus, Chief Executive Officer, Royal Greenland

The independent Fish Processing Licensing Board was created in 2005 to review, and make recommendations to the minister on whether to approve, fish processing licensing applications at arm's length to government. Further information on the licensing of fish processing operations can be found in the Fish Processing Licensing Policy Manual available at: www.fishaq.gov.nl.ca/licensing/pdf/fplp_manual_08_15.pdf PDF Icon

QUICK FACTS

  • The Minister of Fisheries and Aquaculture has accepted the recommendation of the Fish Processing Licensing Board to approve fish processing licence change of operator applications related to the purchase of Quin-Sea Fisheries by Royal Greenland.
  • In addition to review by the independent Fish Processing Licensing Board, the minister and government officials conducted extensive due diligence relating to this transaction.
  • Questions and concerns raised publicly, or in submissions to the licensing board and Provincial Government regarding the change of operator applications, were considered by the minister and officials and it clearly met all established criteria.
  • The independent Fish Processing Licensing Board was created in 2005 to review, and make recommendations to the minister on whether to approve, fish processing licensing applications at arm's length to government.

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Media contacts:

Roger Scaplen
Director of Communications
Department of Fisheries and Aquaculture
709-729-3733, 697-5267
rogerscaplen@gov.nl.ca 		Mikael Thinghuus
Chief Executive Officer
Royal Greenland
+45.5089.3000
mthi@royalgreenland.com

BACKGROUNDER
Key Topics Considered in Decision to Approve Change of Operator Applications Related to the Sale of Quin-Sea Fisheries

The following provides an overview of key topics considered in reaching the decision to approve the change of operator applications related to the purchase of Quin-Sea Fisheries by Royal Greenland:

Controlling Agreements

  • The minister and officials of the Department of Fisheries and Aquaculture (DFA), along with officials from Justice and Public Safety and Executive Council, have reviewed the purchase and sale agreement between the companies and have found no evidence of the existence of controlling agreements.
  • DFA also consulted with the federal Department of Fisheries and Oceans (DFO) on the issue of controlling agreements. DFO has seen no evidence of such agreements involving Quin-Sea Fisheries.

Foreign Access to Harvesting Licences and Quotas

  • There are no harvesting licences or quotas associated with the transaction.
  • Royal Greenland would have the same access to fish supplied by inshore harvesters as is the case with other licensed processors.
  • DFO policy requires Canadian fishing quotas be harvested by Canadian harvesters and companies in both the inshore and offshore sectors.

Foreign Ownership of Processing Operations

  • There is no policy precluding the foreign ownership of seafood processing operations in Newfoundland and Labrador or other Atlantic Provinces.
  • Any company that is established to process fish in the province must comply with provincial fish processing licensing policies including minimum processing requirements for exported products.
  • Foreign investment in the province's resource industries is not new.

Continuation of Processing Operations in the Province

  • Royal Greenland's business plan focuses on expansion of its operation in eastern Canada.
  • Quin-Sea Fisheries has many similarities to Royal Greenland's operations, particularly in terms of shrimp, groundfish and snow crab.
  • The company plans to maintain staffing and employment levels at all facilities, and retain the same management team which includes the current owners for a transitional period of several years.
  • Following thorough review, the Fish Processing Licensing Board is satisfied that Royal Greenland will be able to maintain operations with little or no disruption given its wealth of experience with onshore fish processing and the company's financial stability.

Potential Trade Implications

  • No trade implications are anticipated from this sale.
  • Consideration by internal trade experts, as well as from external trade lawyers identified no concerns.

2016 03 11                              10:00 a.m.