The Newfoundland and Labrador provincial government and Grieg Newfoundland AS (Grieg) have entered into a Memorandum of Understanding (MOU) regarding Grieg’s intention to establish aquaculture operations in the province.
The $251-million project is expected to create approximately 325 direct and 235 indirect/induced person years of employment, based on preliminary estimates, associated with production, harvesting and processing, with further opportunities in the supply and service sectors. As a result of the project, the province’s current Atlantic salmon aquaculture production will more than double.
Grieg’s plans include a new $75-million state-of-the-art hatchery/nursery facility in Marystown that will produce seven million smolts annually to stock 11 sea cage sites for the subsequent 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. The hatchery/nursery will be the largest in Canada and one of the largest in the world utilizing the latest technology. Grow-out operations will include new cage and netting system technology, automated feed systems, well boats and value added processing.
The company has made commitments as follows:
- Construction of the hatchery to be completed by 2017 with construction of the grow-out sites to begin in 2017;
- Annual production to reach 33,000 tonnes by 2023 which will more than double Newfoundland and Labrador’s current production of Atlantic salmon;
- All processing to the final consumer stage, with a minimum of 75 per cent beyond “dressed head-on”; and
- All processing must take place within the province.
In support of this MOU, Grieg must also provide commitments regarding local sourcing of labour, equipment and supplies where available and to utilize local training and academic institutions for training and research needs.
The MOU sets out the obligations of the parties and commits provincial government funding of up to $45 million through the Aquaculture Capital Equity Investment Program. Provincial government investment will be provided, through a 20-year agreement, in the form of an equity position in the company through preferred shares. Redemption of shares will begin in year eight at which time the Provincial Government will also begin to receive annual dividends of three per cent on its shares until the project is complete and the Provincial Government investment is fully repaid in 2035.
The MOU commits the parties to use all reasonable efforts to finalize the necessary formal agreements related to the project by January 31, 2016 subject to the completion of financial, technical, economic and any other analyses required by the provincial government.
A copy of the MOU is available at: www.fishaq.gov.nl.ca/pdf/mou_grieg.pdf.