New Zealand’s King Salmon cut staff by 139
Production of smoked salmon at the New Zealand King Salmon factory in Nelson. (File photo)
New Zealand’s Nelson-based company King Salmon is cutting 139 jobs as it tries to recover financially from the effects of rising sea temperatures and the Covid-19 pandemic.
The company’s chief executive, Grant Rosewarne, said the situation was also largely the result of a lack of new aquatic areas for salmon farming and an avoidable “tragedy”.
Jobs would be reduced in various parts of the business, with factory roles particularly hard hit, said Paul McIntyre, New Zealand King Salmon’s sustainability and stakeholder manager.
The company was focused on cutting jobs through natural attrition — not replacing some departing staff — but some workers would also be laid off, McIntyre said. Staff are currently being consulted.
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The company is cutting its workforce to 441 workers, down from 580 at the end of December, after forecasting a drop in production.
Rosewarne said 59 jobs had already experienced natural attrition, which he said would ultimately account for 80% of job losses in Nelson and Marlborough.
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For the 12 months to the end of January, New Zealand’s King Salmon reported a net after-tax loss of $73 million, attributing this to a difficult year due to increased salmon deaths due to freezing temperatures. warmer seas, supply chain costs from the Covid-19 pandemic, and “depreciations of plant, equipment and intangible assets”.
The financial result prompted the company to raise $60.1 million in equity to pay down debt and strengthen its balance sheet through a shareholder rights offering, which it completed this month.
New Zealand King Salmon traditionally farmed salmon year-round in the Pelorus and Queen Charlotte Sounds, as well as the Tory Channel in the Marlborough Sounds.
Most of its fish kills have occurred in the summer in the Pelorus or Queen Charlotte Sounds, so in response to what it says are the continuing effects of climate change, the company plans to set aside three farms in Pelorus Sound.
The effect would be reduced harvest volumes but lower mortality costs, giving the company a more stable and predictable operation, he said.
Production is expected to increase from 7,672 tonnes in the prior fiscal year to 5,700 tonnes in fiscal 2023 and 6,500 tonnes in fiscal 2024.
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“The New Zealand Salmon King has a tragedy on his hands and it was all completely avoidable,” Rosewarne said.
“We’ve spent over $20 million over the past 10 years trying to get more water space, first through the EPA (Environmental Protection Authority) process, then the farm relocation proposal. and more recently our Blue Endeavor app.”
The company is awaiting a decision on its Blue Endeavor app to farm in the cooler open ocean, 7 km north of Cape Lambert in Cook Strait, which Rosewarne said would provide better fish health and financial returns. If Blue Endeavor is approved, the three fallow farms in Pelorus Sound will be used as nurseries for nine months of the year, avoiding the summer.
“We have high hopes that Blue Endeavor will be successful, but so far annual production has declined. At least this current government has an aquaculture strategy, but the fact remains that no government has allocated seawater space for the salmon industry to thrive as it has. in places like Norway,” Rosewarne said.
“We warned that a once self-sufficient domestic industry would be swamped by imports, climate change would lead to mounting losses and Kiwi green jobs would be lost to Scandinavia and all of these predictions have now tragically come to light for all to see.
“It’s so frustrating when the solution is simple – allocating fresh seawater space for salmon farming. Even a measly 30 hectares would more than double the size of our industry.
However, Rosewarne remained optimistic for the company and the industry.
“I still believe aquaculture could become New Zealand’s most valuable industry and its greenest primary sector.”
McIntyre said the company had been approached by a number of Nelson businesses who had offered positions to workers affected by the job cuts. Other dismissed people have been offered support services.