After 14 years, Pangnirtung plant is now a Baffin business success

After 14 years of heavy losses, the processing plant run by Pangnirtung Fisheries Ltd. now turns a profit, even in the face of rising power bills, a higher Canadian dollar and lower turbot prices.

Built in 1994, the plant survived until now only because of territorial government subsidies worth more than $250,000 a year.

But in 2006-07, the last fiscal year for which numbers are available, Pangnirtung Fisheries Ltd. posted a profit of $477,355 on sales revenues of about $3 million.

That means that even if the company's annual GN subsidy of about $270,000 is taken into account, they still made money.

This pleases the plant's new manager, Don Cunningham, but he says all the credit should go to Michael Nowinski, who managed the plant for seven years before retiring in May of 2007.

"The success is completely his responsibility," Cunningham said.

This also means that the Nunavut Development Corp., majority owner of the business in partnership with Cumberland Sound Fisheries Ltd., finally has a money-maker on its hands, ready to be handed off to the private sector.

Of the NDC's nine community-based subsidiary companies, only one other, Kivalliq Arctic Foods Ltd. of Rankin Inlet, has been able to break even.

A Government of Nunavut report on the future of the NDC and the Nunavut Business Credit Corp., tabled in the legislative assembly earlier this year, says Pangnirtung Fisheries Ltd. is a prime candidate for "divestment," which means a transfer of ownership to the private sector.

Since no other private firms have shown any interest in acquiring the plant, the Inuit-owned Cumberland Sound Fisheries Ltd., now the minority owner, would likely achieve this divestment by becoming the majority owner.

Cunningham attributes the company's success to some key investments that Michael Nowinski made during his seven-year tenure as manager.

The biggest of those, financed by a loan from Atuaqtuarvik Corp. – is an automatic filleting machine. That machine, acquired in 2005, completely changed the flow of work at the plant

"That made a big difference to the plant in gaining efficiencies and getting their cost of production down," Cunningham said.

Until then, plant workers stood in a long line, filleting and skinning turbot with sharp knives.

But the new machine changed the nature of the work performed by employees, making their labour more efficient. Now the machine does the filleting and skinning, while the assembly line workers trim stray pieces of skin, bone or flesh from the machine-processed fish.

"We were able to take all these people who were filleters and transform then into trimmers," Cunningham said.

The machine actually skins and fillets fish so fast the trimmers can't keep up it with it.

"We just run the machine for a couple of hours. When they get low we run the machine for another couple of hours."

Other improvements include expanded cold storage capacity with individual containers that can be turned off when empty to save on electricity, which represents one of the their biggest production costs.

Cunningham said the plant provides jobs to a "strong core" of 15 employees who work full-time, year-in, year-out. It also provides work for another 15-20 Pangnirung residents who work on a more casual basis.

"Sometimes they're there for only two days, sometimes three or four weeks. For whatever reason, we just aren't keeping them and holding them."

Wage rates start at $10 an hour for people who have never worked at the plant before, then rise to $11 an hour after three months. After a year or two of employment, regular plant workers can earn up to $15 an hour. Supervisory positions pay about $20 an hour.

Cunningham says a more stable work force would help the plant become even more efficient, because when they're in full production, they need 35 workers at a time.

But like many employers in Nunavut, he says it's difficult to hold some employees for long periods of time. Cunningham says they've tried one-on-one meetings and gift certificates for employees of the week, but those efforts haven't really worked.

But he does think that providing daycare service for plant workers might help.

About 400 tonnes of turbot, most of them delivered from trawlers with their heads and guts removed, moves through the plant every year.

Of that, about 100 tonnes of fish are filleted, then processed as individually frozen items that are sold as 20-pound packs, mostly for sale in Europe, where turbot is a popular dish.

"The retailer or the restaurant can go into those packs and take out one or two fillets at a time. They lend themselves to those kinds of sales and that's allowed us to break into that market," Cunnigham said.

The remaining 300 tonnes are repackaged and shipped to market, mostly in China and Japan. It flies to Montreal where it's packed into 23-tonne, 40-foot cold-storage containers. Each time a container is filled, it moves by train to Vancouver and then by sea to China, Taiwan or Japan.

Because the weakening U.S. dollar now sits more or less at par with the Canadian dollar, Pangnirtung Fisheries doesn't sell much product to buyers in Boston anymore.

Another key factor that drives the plant's increased sales and production rates is Cumberland Sound Fisheries' membership in the Baffin Fisheries Coalition.

"We were able to tie up two things: a supply of fish and a way to harvest that fish."

Though the plant has always bought fish from local harvesters who catch turbot through the ice in winter months, the BFC now drops off hundreds of tonnes of fish each year, guaranteeing a steady, predictable supply of fish.

"It not only provides fish to the plant, of course, it provides income to Cumberland Sound on the portion of fish that the plant can't use because we're just not that big to process all the fish that they have quota for," Cunningham said.