Icelandic group to axe US fish plant – Fishupdate.com

ICELAND USA, Inc, a subsidiary of Icelandic Group, which also owns Coldwater Seafoods in the UK, plans to close the company’s production facility in Cambridge, Maryland, by the end of next year with the likelihood of many jobs being affected.

The move is part of a general restructuring and recovery plan for Icelandic’s seafood operations through the world, including Britain and Europe, in a bid to improve profitability and efficiency.

The decision to shut up shop, says the company, is based on its ability to fill projected product manufacturing and distribution needs using the company’s production facility in Newport News, Virginia and a newly completed distribution centre also located in Newport News.

Looking to the future, the closure is expected to provide critical production and distribution efficiencies.

The closing will cost estimated impairment charges of nine million euros – or around £6-million – associated with the Cambridge facility in the final quarter of this year.

There will be an additional estimated restructuring charge of four million euros that will be recognised at the end of this year. The company says the move will result in a much improved cost structure for the group’s activities in the United States.

The facility, which has a long history of producing some of the seafood industry’s most innovative new products, has operated on Maryland’s Eastern Shore since 1968 and employs approximately 400 people. Production will continue at current levels at least through the first quarter. The closure will be phased in throughout the year.

Bjorgolfur Johannsson CEO of Icelandic Group said : “The closure of the Cambridge plant is the final step in the merger of Icelandic USA and Samband of Iceland, which started in the year 2005. The profitability of Icelandic operations in the USA has been low for many years and this action is necessary in order to improve it.

He added: “The Cambridge plant is old and inefficient. The Newport News plant is 10 years old and much more efficient. After the closure the Newport News plant will be utilised much more, which will result in significantly improved operations”.

In a the latest financial report published last month, the company said Icelandic USA sales were up three per cent to 213million euros (£145million). But, the directors warned that moves were under way to improve profit margins, with a new distribution centre next to the Newport Mews processing, thus allowing Icelandic to store and ship orders for a single combined location.

The UK re-organisation involving Coldwater Seafoods in Grimsby and a newly acquired freezing plant in northern France is currently underway.

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