Good afternoon, Mr. Chairman and honourable members of the committee.
My name is Richard Ablett. I represent Sogelco International, a seafood processing and marketing company operating in Montreal, or based in Montreal, and owning and operating two factory units in the Maritimes.
One is in New Brunswick, as Bolero Shellfish Processing in Saint-Simon, a factory operating on the basis of traditional lobster and sea cucumber processing products. A second plant, where I'm based today, is in Summerside, Prince Edward Island. That's Summerside Seafood Supreme. Our plant is involved with the production of specialty products, including a range of chilled, pasteurized seafood ready meals. They're marketed throughout North America as mass retail products. Together these two plants operate on a year-round basis, with about 280 employees. Sogelco has sales in the range of $50 million to $60 million. It's a family-owned business. It's been in business for 46 years.
Today what we're trying to do is provide a perspective for consideration by the committee from the viewpoint as downstream, value-addition secondary processors. We operate at the end of the value chain within the P.E.I. seafood sector, and with an emerging threat of market loss.
Over the last few days I've been listening to the deliberations of the committee. I see a lot of direction towards the primary end of things, the requirements for rebuilding infrastructure. Our company is very much at the end of the chain, in a sense, as an ingredient purchaser in the aquaculture sector in P.E.I., specifically with mussels. Live mussels constitute the basis of a range of our products. If you just look behind me, you see, as an example, “mussels in garlic butter” types of products, with a high content of Prince Edward Island cultured mussel. These are selling across Canada and into the United States, effectively through the Costco chain and Walmart marketing outlets. Walmart and Costco are major customers for our products. Our sales are growing.
The interesting feature of the product base coming from this factory is that they are pasteurized, chilled products—never frozen. This allows us to produce and market a product into specialty niches inside these mass retail chains without the competition from frozen product. Our plant is able to make 20,000 units a day.
Behind all of that, we recognize that hurricane Fiona has had a massive impact on infrastructure and the primary resource of fishery and aquaculture based in Prince Edward Island and the region. Obviously, recovery assistance is needed for what we call the front end of the value chain.
Summerside, our plant here, represents a real-time example of an unforeseen impact of the hurricane at the downstream end. I'm sure that many other secondary processors in the region will have similar problems. We try to bring this to your perspective as an example.
This particular factory in Summerside has a long-term supply arrangement with Prince Edward Island north shore mussel growers and processors, specifically with Prince Edward Aqua Farms, one of three of the larger operators in P.E.I. It's been in place for 12 years, with an understood supply chain that's been uninterrupted and can provide mussels to the plant of a high-quality nature and meet our specifications. In the last year we purchased 1.1 million pounds of mussels from our supplier. We're scheduled to move up to 1.7 million this year on the basis of expanding sales for the products you see behind me, but also for three new products that will be introduced in the 2023 season. Not to get into it, but these would be additional mussel retail products—mussels arrabbiata, Thai curry and a seafood boil product.
What I want to try to do is tell you what our emerging dilemma is, as an example, and then try to say what might be provided as some kind of mitigation approach.
Currently the plant is challenged with a reducing supply of up to 500,000 pounds of mussels due to losses in the resource space behind us, so dropping from 1.1 million pounds down to 700,000 is really sitting in front of the company right now. Obviously, the supplier needs to look after its own resources and its own customers, primarily as a live-market supplier. Mussels are moved out across North America, as you know, and something like 80% of the Canadian supply comes from Prince Edward Island.
This reduction to our processing operation can result in a problem with our firm's capacity to meet the customer agreements that were set last summer with mass retailers on pricing and availability. This is really an issue that can significantly impact the business, and we're probably [Technical difficulty—Editor] on launching new products if the supply to the operation is actually reduced.
Suppliers raised their price to the factory here due to the impacts of Fiona, and the need for cleanup costs.
For clarity—