High Liner Foods announced on January 9 that it will stop producing frozen seafood at its leased factory in Malden, Massachusetts, by the end of the second quarter of 2015 to reduce excess capacity in the United States. The plant is the Halifax, Nova Scotia, Canada-headquartered company’s most underutilized manufacturing facility, with annual production of approximately 11.5 million pounds.
Fifty fulltime employees currently work at the factory, some of whom will be moved directly to positions at other plants. The remaining employees will have the opportunity to apply for open or new positions at High Liner’s other facilities in the region.
Following cessation of operations in Malden, High Liner’s manufacturing footprint in North America will consist of four owned and operated plants: three in the US (Portsmouth, New Hampshire; Newport News, Virginia; and New Bedford, Massachusetts) plus the flagship Canadian operation in Lunenburg, Nova Scotia.
“The company recognizes this is a difficult day for the employees who work at the Malden plant, and their families. High Liner Foods has been operating this facility since acquiring Viking Seafoods in 2010, and we were extremely fortunate to have inherited such a dedicated and hard working team of employees,” said Keith A. Decker, president and chief executive officer. “While the decision to cease production has been difficult, it is necessary to ensure our continued ability to grow and compete in a highly competitive and price sensitive marketplace.”
An after-tax impairment charge of approximately $0.8 million will be recorded to write-down equipment to its estimated net realizable value. In addition, after-tax cash costs of approximately $0.3 million related to the closure will be expensed over the period from January 9 to the cessation of employment at the plant.
The annual ongoing pre-tax reduction in operating costs (which represents an increase in earnings before interest, taxes, depreciation and amortization, or EBITDA) resulting from this consolidation is estimated to be approximately $3 million.
High Liner Foods employs 1,540 people in North America, China, Iceland and Thailand. Its retail branded products are sold throughout the United States, Canada and Mexico under the High Liner, Fisher Boy, Mirabel, Sea Cuisine and C. Wirthy labels, and are available in most grocery and club stores. The company also sells products under the High Liner, Icelandic Seafood, FPI, Viking, Mirabel, Samband of Iceland and American Pride Seafood brands to restaurants and institutions, and is a major supplier of private label frozen seafood to North American food retailers and foodservice distributors.
