Transcript English
Industry Challenges … & Potential Solutions It’s not just about demographics! Robert Verge, P.Eng., MBA, CA, CMC Managing Director, CCFI November 15, 2016 1 Fish – A High-Growth Industry 200-Mile Limit Moratorium SOURCE: UN FAO 2 Different Worlds World Fish Supply 140,000 120,000 000 Tonnes 100,000 Growth in supply is from aquaculture, developing countries 80,000 60,000 40,000 20,000 0 2000 2001 Capture Fisheries 2002 2003 Aquaculture 2004 2005 Year 2006 Developed Countries 2007 2008 2009 2010 Developing Countries Developing countries now represent 2/3 of global fish exports 3 Canada Not Participating in Growth 26% Drop Decreased landings from capture; no increase from aquaculture 4 Currency Exchange 5 Diverse Species Niche Markets GROUNDFISH PELAGICS CRUSTACEANS 6 Variable Catches by Species Shellfish Climate Change Groundfish & Pelagics Rising Prices, Exchange Rates Increasing lobster catches offsetting decreasing shrimp, crab catches Rising Prices, Exchange Rates Dramatic changes in catches, values Groundfish & Pelagics Shellfish Climate Change 7 Variable Catches by Province Shellfish Climate Change Rising Prices, Exchange Rates Groundfish & Pelagics Dramatic variations in catches, especially in NL, NS Shellfish Rising prices, exchange rates now offsetting decreased catches Climate Change Rising Prices, Exchange Rates Groundfish & Pelagics 8 Seasonality Avg. No. Sea Days by Vessel Home Port, 2010 We need to make better use of our decreasing labour force 9 Variable Prices SOURCE: John Sackton 10 KPIs – Canada Not Doing Well $000 ANNUAL REVENUE, $ PER EMPLOYEE NL, 2015 Aquaculture Fish Harvesting Processing $ 366,743 79,066 38,985 ICELAND, 2013 Fish Harvesting Processing 336,389 212,790 11 Low Returns on Capital SOURCE: AAFC 12 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013P Processing Plants, NL 200 Number 180 160 140 120 171 77 100 80 60 40 20 0 Source: DFA 13 Plant Worker Incomes, NL (Inflation adjusted: Constant 2010$) $30,000 $23,834 $26,840 $25,000 $13,474 $20,000 $15,000 $12,807 Wages UI/EI $10,000 Total Income $8,451 $5,000 $0 $7,762 Special Taxfiler Tabulations from STC for NLSA, GovNL 14 Processing Employment, NL Number 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Peak No. Plant Workers 18,070 8,038 Source: DFA 15 Not Enough People ► Owners of fishing enterprises and processing plants complain they can’t find enough people to run their operations ► CCFI is continually being asked to find ways to automate processes on fishing vessels and in processing plants ► And the problem is expected to get worse! 16 Availability of People Short-Term Long-Term How many want to go into the fishery? 17 We Have a Labour Supply Problem ► Reasons No growth in industry output Seasonal employment It’s not just about demographics! Low incomes Dependence on EI Smaller population cohort after baby boomers More attractive opportunities elsewhere ► Automation can be only part of the solution – we must also Increase industry output value Provide better employment opportunities – longer periods of employment, better incomes, less dependence on EI, career progression 18 NS: Ivany Report, 2014 ► “ … it will not be possible to turn around our economic outlook as a province unless we significantly improve productivity and competitiveness in our traditional rural industry sectors.” ► “For many years the highest public policy priority for these sectors has been simply to maintain jobs in rural communities. But today we find that many business operators are insufficiently profitable to support the investments in product quality, plant productivity, worker training, and market expansion that are needed to maintain and grow market share. In some sectors it is increasingly difficult to find local workers to take the low-wage and seasonal jobs many employers offer. As a result, young people are leaving rural communities, other countries are out-competing us in the marketplace, and the province is not realizing the full value of our asset base. These business models need to be revised if the province and our rural communities are to escape the current pattern of weak economic growth and population decline.” 19 Technological Change Amazon Fresh/Santa Monica Seafoods Superchilling + Controlled Atmosphere Every link of the value chain Craemer’s new Tracking & Tracing Fish Box 20 Reasons to Automate ► Tasks that could not be done otherwise Unique capabilities Time Economics ► Process optimization (business processes + production processes) Production planning Assessing possibilities to identify best outcomes Scheduling Process coordination, monitoring, and control • • • • • Compliance with regulatory requirements Quality consistency Flow control/process reliability/error reduction Energy efficiency Safety ► Increase revenue/reduce costs Increase throughput, product yield, quality, output value Reduce labour, waste 21 Challenges ► It’s not just about reducing the need for labour We need capabilities that can only be provided through technology ► Automation will mean People will need more technical skills – which are also in demand elsewhere Higher incomes, better benefits, and good lifestyles will be needed to attract them We transition from a labour-intensive industry to a capital-intensive industry ► Can the industry attract the capital? Already struggling with profitability and low ROI Variable raw material supply – species, quantity, size, quality, price Uncertainty, due to resource regime shift Longer operating seasons needed to justify the investment ► Can we change the business model? Long-term investments require greater stability and predictability 22