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.
"Over the past decade we have seen significant growth in our province's aquaculture industry, which continues to expand and diversify rural economies through direct and indirect jobs, and benefits to businesses. This MOU sets the stage to make Newfoundland and Labrador the largest aquaculture producer in eastern Canada. We will rival the output of British Columbia which currently leads among the Canadian provinces. The project proposed by Grieg will lead to significant new employment and business opportunities for Newfoundlanders and Labradorians particularly in the Burin Peninsula and Placentia Bay regions," said Keith Hutchings, Minister of Municipal and Intergovernmental Affairs.
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.
"This project will take our aquaculture industry to a whole new level and make us a major global player. By more than doubling our current provincial Atlantic salmon production our industry will reach the critical mass and economies of scale necessary to support and encourage the expansion and diversification of a large-scale supply and service sector for the industry. This will create many more direct and indirect employment and business opportunities for our people," said Vaughn Granter, Minister of Fisheries and Aquaculture.
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 potential for salmon farming in Newfoundland and Labrador is huge using modern sustainable farming methods. We believe the province can be developed into a substantial producer of fresh salmon products for the whole North American market. There is a continuous and increasing demand for high-quality salmon, and we believe that Newfoundland and Labrador can supply this. We are also delighted with the reception we have had here from the province, local communities like Marystown, and our local partners from Ocean Choice International. After Minister Hutchings' visit to Norway in July, 2014, we have been working closely with the Provincial Government which has worked very hard to establish a solid basis for this venture," commented Per Grieg Jr., the Grieg Group.
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.
