By Andy Walker
FOR THE SOU’WESTER
If the major employer in the eastern PEI town of Souris re-opens its doors for the spring fishing season, there will be a new name on the side of the building.
Ocean Choice International has announced plans to sell the facility, which has been shuttered since the Newfoundland based company announced just days before the 2011 lobster season it was getting out of the processing business in PEI. Ocean Choice purchased the plant in 2004 after the collapse of Polar Foods International.
Since the Island closure, Ocean Choice has also closed down two plants in Newfoundland. Ocean Choice placed the sale notice in major newspapers and industry publications in late March. The tender closes April 19. While the time lines would be tight, the plant could be opened by the new owner in time for the May 1 start of the spring lobster season.
While the closure did result in the loss of over 200 jobs, Ocean Choice often had trouble recruiting a work force in the Souris area. That forced the company to look further afield, bringing in foreign workers from Serbia and Russia.
Since the closure last April, Ocean Choice has been battling the PEI government of Premier Robert Ghiz both through a war of words in the media and in the courts. Both sides are basing their case on a ten year purchase agreement the company made with the former Conservative government of Pat Binns.
That deal allowed Ocean Choice to pay for its purchase over ten years. That purchase included several smaller plants which have since been closed or sold. It also contained two clauses that have proven to be controversial.
At the time of the sale, a surplus in processing capacity was deemed to be one of the main factors leading to the Polar Foods collapse. To combat that problem, the Conservative government agreed not to issue any additional processing licenses until at least 2014. It also promised that any government subsides extended to any other processor had to be offered to Ocean Choice.
If the government fails to live up to its obligations, the contract indicates Ocean Choice is no long obligated to make any additional payments. The company maintains that is exactly what happened, pointing to $990,000 in loans to rival Mariner Seafood and the fact a $1.4 million loan was forgiven when the North Lake Fishermen’s Co-op was sold to Ocean Pride.
It also claims granting a processing license to Ocean pride was in violation of the agreement. The government counters it was not new production since Ocean Pride took over an existing plant. The company stopped making its yearly payments in 2010.
Shortly after the closure was announced, the province sued Ocean Choice in an attempt to recover the $10 million the Ghiz government claims is outstanding. The company has