Contract freezes have dramatic consequences for the salmon farmer’s processing plants in Senja and Frøya.
«This is mainly because the government’s proposal for a new salmon tax has destroyed the market for long-term fixed-price contracts. Such contracts are usually entered well in advance of deliveries and are absolutely necessary in order to fill the facilities with enough processing activity. 696 of those affected by the notification are associated with further processing at the two plants. The remaining 155 will be associated with the slaughterhouse at InnovaMar on Frøya, and this is due to normal fluctuations and lower slaughter volume during the winter months. Limited layoffs linked to slaughter volume have been the norm for many years,» SalMar writes in a press release.
«In the future, SalMar will do its utmost to ensure that those who now receive this notice will have work to go to, even after new year.»
The announced redundancies will apply to the period 1 January to 30 June 2023, and include 748 employees at InnovaMar in Frøya, and 103 employees at InnovaNor in Senja.
«The government’s proposal, if adopted, involves a tripling of the tax on salmon production in Norway. Taxable income as the basis for the new tax must be a “spot price” for whole fish, which may deviate significantly from the actual realized sales price of a varied product and contract portfolio. This has a particularly negative impact on further processing, which is normally based on fixed-price contracts, not spot prices. There is simply no one willing to enter into fixed-price contracts anymore. There will, however, be room for some activity in processing also after new year, mainly due to contracts entered into before the government presented its tax proposal on September 28th.»
SalMar finds the current situation deeply regrettable.
“In the future, we will do our utmost to find remedial measures in a difficult and demanding situation for everyone. This will be done in close collaboration with the employees and their union representatives. Such measures can be, for example, maintenance, skills building and the possibility of part-time employment at other departments in the company. There will therefore not be 851 of our employees who will be made redundant at the same time. But in a situation where fixed-price contracts for processing cannot be entered into, processing is also not possible. Political risk is difficult to insure against. For many years, SalMar has prioritized the development of advanced production facilities for the further processing of salmon in central and northern Norway. The company had a processing share of over 45 per cent in 2021. Processing provides three to four times as much employment as the export of whole, gutted salmon. With so much further processing, SalMar and our employees are hit all the harder by the government’s proposal,” CEO Frode Arntsen says.
“At the same time, on behalf of the company, I would like to express my great gratitude to our several thousand employees, suppliers and partners who make it possible to deliver healthy seafood to the whole world every single day. Extra thoughts naturally go to our 851 highly valued employees who are now being notified of layoffs. I promise that we will do absolutely everything we can to keep the wheels turning at our factories and thereby seek to minimize the scope and effect of the layoff notices,” he adds.
