Proposed closure of Hout Bay Fishmeal Factory
It is with a heavy heart that we share with you the news that Oceana is contemplating the closure of our Hout Bay Fishmeal Factory. As required in terms of section 189A of the Labour Relations Act 66 of 1995, Oceana is consulting with affected employees prior to making a final decision. There are 98 employees who could be directly affected by the proposed closure. It is intended that the consultation process will provide Oceana with comprehensive inputs from all directly affected staff to ensure that all relevant issues are addressed before any final decisions are made.
Oceana’s employees are highly valued and we intend to try to ensure the retention of all staff in alternative positions at our St Helena Bay Operations, and where possible into available positions within the various subsidiaries of Oceana Group Ltd. We also intend to provide relocation allowances in that context, and reasonable time for employees to undertake relocation where applicable.
Subject to certain regulatory approvals, we are also contemplating entering into a partnership with Premier Fishing in order to reopen Premier Fishing’s Saldanha Bay fishmeal facility which was closed for economic reasons in 2008.
Oceana has been an integral part of the Hout Bay (HB) economy and community since its establishment 57 years ago when most of the town’s inhabitants lived just behind the harbour and were employed by the fishing industry. Up until fairly recently, HB was a small fishing village with a strong Cape heritage and sense of community that underpinned the industry. Over the years, the population has expanded and the town has developed into a popular, diversely utilised area.
A growing number of Hout Bay residents have voiced their displeasure at the odour associated with the company’s Hout Bay fishmeal operations. Despite the fact that the Hout Bay business has been recognised as having adopted best practice for odour management as required by the National Environmental Management: Air Quality Act, it cannot completely eliminate the odours associated with fish production. The frequency, intensity and location with which residents may experience odours are largely dependent on the prevailing wind direction and velocity as well as characteristic topography of Hout Bay. Oceana has consistently asked the community for indulgence but the significant escalation of complaints has continued.
Over the past 15 years, we have upgraded our facilities with more than R50-million of investment into odour minimisation technology, as well as to improve processing technology and minimise emissions. As required by the National Environmental Management: Air Quality Act, the facility has adopted the best practice for odour abatement management and is the only fishmeal plant in South African to currently hold a final Atmospheric Emissions License (AEL).
In an effort both to respond to and minimise community complaints, we limited plant production to less than 40% of our normal annual production over the past three years. While this had a significantly negative impact on the financial viability of the business, it has not resulted in a decrease in the level of complaints received from the community. To the contrary: the level of complaints has grown by 240% during the last three years.
The company now finds itself in the position where it either has to ignore the growing levels of community discontent and revert to pre-2012 production levels, or relocate the plant’s processing capacity. Should the factory revert to normal production, this would result in an increase from 60 production days per annum to its historical 120 to 180 days per annum. Given the current level of complaints from certain sections of the community, this does not appear to be a workable solution.
We are aware of the important role that our employees have played over nearly six decades in developing and supporting this community. As part of our company policy, Oceana invests and supports communities in which we operate, and we have implemented various Corporate Social Investments projects in Hout Bay to the benefit of the community, in projects ranging from schooling to housing and emergency assistance.
We cannot stress enough how heavily this potential decision for closure weighs on us as a company, and we are fully aware of the impact that this potential decision would have on our people and their families and other business stakeholders.
Further communication about this process will follow in due course.
Hout Bay Fishmeal Factory Management