Receivership closes 4 Daley Brothers plants

Plummeting shellfish prices contributed to the closure on Tuesday of three processing plants in Newfoundland and one in Nova Scotia, the parent company says.

Daley Brothers Group said the Bank of Nova Scotia has put Sea Treat Ltd. in receivership.

"After numerous attempts to reach an agreement on a restructuring plan, talks between the bank and the company broke off," the company said in a statement from St. John's.

The company said Sea Treat plants in the Newfoundland communities of Anchor Point, Port de Grave and St. Joseph's are closing, in addition to a plant in Cheticamp, N.S.

Of the three Newfoundland plants, the Port de Grave plant was the only one currently operating. It employed about 250 workers. A spokeswoman says the company overall employed about 1,000 workers.

Bonnie Genge, who had processed shrimp at the Anchor Point plant for 27 years, said the news has shocked the town.

"My first reaction is [that] I started to cry," Genge said.

Anchor Point workers were poised to vote Wednesday on whether to cut their wages so that the plant would be able to operate this season. Genge said she and her family are now thinking about joining others seeking work in the West.

"We're talking about Alberta But Alberta won't hold all of Newfoundland, will it?" Genge said.

Daley Brothers said Sea Treat's troubles are directly connected with problems in the crab and shrimp fisheries, as well as the rising Canadian dollar.

Crab prices have dropped sharply this year, in part because the Canadian dollar has soared above levels of recent years. Seafood exports are arranged in U.S. currency.

Harvesters have said that high fuel costs are combining with low prices for catches to make it virtually impossible to turn a profit this season.

• FROM APRIL 7, 2006: Crab prices will drive fishermen out of business: FFAW

Earle McCurdy, president of the Fish, Food and Allied Workers union, said crab fishermen should still be able to sell their catches.

However, the outlook for shrimp fishermen could be more difficult, since there are only 13 shrimp processing licences in Newfoundland and Labrador and Sea Treat held two of them.

"Depending on whether the receiver decides to operate those plants, this would have a significant impact on the shrimp fishery," McCurdy said.

Daley Brothers said its other operations will not be affected. Through Cold North Seafoods, it operates two plants in Newfoundland, processes lobster in Nova Scotia, purchases seafood in Prince Edward Island, and processes seafood in Quebec.

The company said its financial problems have been complicated because of continuing litigation over the compensation it received from an insurance company after its processing plant in Shippagan, N.B., was destroyed by fire during a 2003 riot.

• FROM MAY 4, 2003: Police watch in horror as Shippagan burns

Crab fishermen in Shippagan were protesting quota cuts by the federal Department of Fisheries and Oceans.

Daley Brothers said it will be up to the bank or the receiver to decide which plants if any will continue to operate.

In a statement, Sea Treat president Terry Daley called the situation "a sad day for the company and our family. Most of all we are sorry for our plant workers that have supported our company, some for the last 25 years."