Clearwater Seafoods LP's fleet of clam fishing vessels suffered its second blow in seven months when the firm's new state-of-the-art ship capsized in Taiwan just prior to having its finishing touches added before delivery.
The $50-million Atlantic Sea Hunter was being towed to dry dock for final detailing before being transported to Clearwater when it sank in about 16 metres of water, said Colin MacDonald, chief executive of the Halifax-based seafood firm.
"It had just come out of the shipyard, it had done all its buoyancy tests and other tests. According to witness accounts, it was moving along at about two knots and it just tipped. It was shocking. There were quite a few people working on it at the time, and we are just very thankful that no one was hurt," Mr. MacDonald said.
It's the second time in recent months that Clearwater's clam fishing operations, which account for about 18 per cent of its revenue behind scallops, lobster and shrimp, have suffered an unexpected setback.
On Dec. 5, 2006, one of Clearwater's three older clam vessels, the Atlantic Pursuit, was struck by a large wave in the Southeastern Grand Banks.
The Pursuit suffered extensive damage. The vessel had been due for retirement, and was pulled from service a few months early as a result.
Clearwater's two other clam ships, the Atlantic Vigour and the Ocean Concord, are still out fishing. One of them is due to be replaced by the Atlantic Sea Hunter, slated to be the jewel of the fleet with an advanced power management system that reduces fuel costs and sophisticated tracking and ocean-bottom mapping equipment.
The older vessel will continue to fish while the new ship is repaired.
A crew including engineers and salvagers will raise and pump the ship, and then try to determine what went wrong, Mr. MacDonald said. While it's too early to say how long repairs will take, the setback is expected to delay growth in Clearwater's clam business for the next 12 to 18 months, he added.
It's an unfortunate setback for Clearwater, which has struggled with the high loonie because its costs are in Canadian dollars, but a large portion of its revenue is in U.S. currency.
Market watchers have also raised concerns about the capital-intensive nature of the trust's business, including the cost of building and maintaining ships. Of the three analysts that cover Clearwater, two rate it a "sell" and one a "hold."
Mr. MacDonald said Clearwater expects to continue to be able to meet demand for clams from its biggest customers, which are primarily located in China and Japan.
The trust's distributable cash in 2007 will not be hurt by the accident, and both Clearwater and the shipyard have insurance coverage for the vessel, he said.
"There's always a silver lining in every dark cloud. It will force us to innovate and rally the troops and work a little harder to come up with solutions. For 31 years, the people in this company have come up with solutions for a myriad of problems, and that's what we'll do now," Mr. MacDonald said.
CLEARWATER SEAFOODS
Close: $4.86, down 4 cents
Atlantic Sea Hunter
Cost: $50-million
Length: 80 metres
Top speed: 14 knots
Load weight: 2,700 tonnes
Shipbuilder: Ching Fu Shipbuilding, Kaohsiung, Taiwan
Features: Vessel equipped with dual factory capable of processing clams in traditional manner, as well as with new high-pressure shucking technology. It has an advanced power management system, which measures the amount of energy boat needs at a given time and regulates the vessel's engines and generators, reducing fuel costs and pollution.