Royal Greenland A/S has announced an investment in Canadian seafood producer Quin-Sea Fisheries Limited that will give it majority control. The Newfoundland-based company annually processes and sells more than 11,000 metric tons of primarily crab and coldwater prawns, supplemented by smaller volumes of whelk, sea cucumber, capelin and cod. It operates six land-based factories, typically generates annual revenues of over C$ 60 million, and employs approximately 700 people during the high season.
Nuuk, Greenland-headquartered Royal Greenland, a vertically integrated fishing, production and marketing company, is focused on North Atlantic wild-caught fish and shellfish. With revenues of around DKK 5 billion per annum, it ranks as the world’s largest processing company coldwater prawn, Greenland halibut and lumpfish roe sectors.
Quin-Sea Fisheries is owned and led by Fred Hopkins and Derrick Philpott, both of whom will remain on the job until retirement. The company is known for its strong management team and close relationship with local fishermen in Newfoundland and Labrador.
In a joint statement about the new partnership, Hopkins and Philpott commented: “We see much opportunity to further develop the seafood industry in Newfoundland and Labrador through working with Royal Greenland. It is important for the ongoing growth of the business that the local seafood industry continues to prosper, and we are eager to join with Royal Greenland to achieve this objective.”
Mikael Thinghuus, chief executive officer of Royal Greenland, stated: “We foresee a great number of benefits from the transaction. While, on the one hand, the products from Quin-Sea will get access to the vast international sales organization of Royal Greenland, we, on the other hand, will benefit both from access to the products from Quin-Sea and from Quin-Sea’s knowledge of species, which are currently not harvested in Greenland, namely whelk and sea cucumber.”
The CEO continued: “We all tend to see other companies that harvest, produce and sell the same species as our main competitors. In my view, this is a big mistake; one that I openly admit that we at Royal Greenland have been as culpable of as anyone else. In reality, our main competition is other species of seafood – for example, consumers switching between coldwater and warmwater shrimp – and entirely different sources of protein including chicken, pork, and beef.”
Noting that the seafood industry is very fragmented, Thinghuus pointed out that even the big companies are dwarfed by the buying power of large retail and wholesale customers.
“If we want to invest in developing existing markets and building new ones, it is imperative that we consolidate and cooperate within our core specie, he said. “The consolidation and cooperation must be across national borders that are of little interest to both the fish and the consumers. We regard this investment in Quin-Sea Fisheries as a first, important step in that direction with regards to the core species of Royal Greenland.”
The investment by Royal Greenland is subject to the approval of the provincial government for the “change of operator” of the processing licenses held by Quin-Sea Fisheries Limited.
