Province signs MOU with Grieg Newfoundland
A proposed aquaculture project on the Burin Peninsula is poised to provide a big boost to local employment.
© Paul Herridge Photo
Municipal and Intergovernmental Affairs Minister Keith Hutchings (left) and Bellevue MHA Calvin Peach look on as Per Grieg Jr. of the Grieg Group discusses the company’s proposed aquaculture project on the Burin Peninsula Monday morning. The provincial government announced a memorandum of understanding has been signed with Grieg Newfoundland AS.
The provincial government and Grieg Newfoundland AS announced the signing of a memorandum of understanding (MOU) in Marystown on Monday morning.
The MOU concerns the company’s intention to set up aquaculture operations that will more than double the province’s current production of farmed Atlantic salmon.
Based on preliminary estimates, the $251-million project is expected to create roughly 325 direct and 235 indirect/induced person years of employment, through production, harvesting and processing activities, with additional opportunities in the supply and service sector.
Fish farming has a high impact on the local economy, said Per Grieg Jr. of the Grieg Group.
“You can say maybe that if you have one guy out on the site, he will sustain five others on the shore by way of local purchases and services,” he said.
“So once you establish the sea production, you certainly have the motive for the whole regional economy, which is quite strong.”
The project will see the construction of a $75-million hatchery/nursery facility in Marystown that will produce seven million smolts annually to stock 11 sea cage sites for the grow out and harvest of 33,000 tonnes of Atlantic salmon.
Four bay management areas will be developed along the western side of Placentia Bay and near Long Harbour.
Grow-out operations will include new cage and netting system technology, automated feed systems, well boats and value-added processing.
Deputy Mayor Al Spencer said the project has the support of Marystown council.
“It’s good for Marystown. It’s good for the Burin Peninsula,” he said. “Based on all the technology we’ve seen, it appears to be a very sound project and at the end of the day, it’s a win-win.”
The MOU sets out the obligations of both Grieg and the province and commits provincial government funding of up to $45 million through the Aquaculture Capital Equity Investment Program.
Grieg must provide commitments regarding project startup and development timelines, as well as local sourcing of labour, equipment and supplies where available, and to use local training and academic institutions for training and research needs.
“Our maximum commitment is $45 million,” Municipal and Intergovernmental Affairs Minister Keith Hutchings said. “We will take preferred shares. After eight years we will draw down dividends on those. They will be paid back to the province over a period of time. These arrangements are very similar to what we arrange with other MOUs and completed deals with aquaculture producers in the province.”
Construction of the hatchery will be completed in 2017, while the work on the grow-out sites will begin that year.
“We are discussing with different suppliers when it comes to who is going to build the hatchery and who is going to supply the different catch systems and so on, and also we are discussing with banks to finance the operation,” Grieg Jr. said. “The contribution from government here is very key to getting those discussions started.”
Grieg is working with Ocean Choice International on processing as well as sales and marketing.
Ocean Choice president and CEO Martin Sullivan was in town for the announcement.
While there’s due diligence to be done, he said processing will be completed locally.
“We have said that it will be on the Burin Peninsula,” he confirmed. “It’s a great project for the region, that’s for sure.”
Not everyone was happy with the announcement, however.
Marystown resident Dan Kelly, a longtime salmon angler, continued to express concerns about the environmental impact of the project on Placentia Bay.
He said he is not against farmed salmon but argues it should be done on land and not in the ocean.
“We got Fortune Bay and Connaigre Bay all destroyed for our wild stock of salmon and other species besides. Now we’re going to open up another can of worms and start destroying the salmon stocks in Placentia Bay,” Kelly said.
“We all know what you do when you put something in the Atlantic Ocean. You’re going to have escapement.”
Grieg Jr. said the company is aware of the environmental challenges and has research and development projects ongoing with wild salmon interests.
An environmental review into the project is underway and should be completed by the end of November.