Major SA seafood business reveals multimillion-dollar algal bloom hit
A 500-strong South Australian business has put a figure on its growing algal bloom losses in its submission to a federal inquiry, as a wave of job losses continues to hit the seafood industry. Public hearings on the algal bloom’s impact start in Adelaide this week.
Adelaide-headquartered seafood company Yumbah Aquaculture has claimed the direct financial impact sustained by Yumbah to date was about $5 million – a significant chunk of the company’s $100 million annual revenue target – in its submission to the Federal Senate’s committee on Algal Blooms in SA.
Yumbah Aquaculture CEO David Wood said the business was forced to stand down workers and was suffering from lost harvest potential, enforced industry closure and urgent risk mitigation measures brought on by the crisis engulfing the SA seafood industry.
Yumbah is a major producer of shellfish, oysters, mussels, aquafeed and oyster spat. It recently acquired fellow SA-based aquaculture company Clean Seas for $30 million, adding yellowtail kingfish to its portfolio.
Its submission was one of 114 lodged with the Federal Senate’s committee on Algal Blooms in SA, which is set to start public hearings in Adelaide tomorrow.
Speaking to InDaily, Wood said Yumbah employees had been affected, with many of the business’ 500 staff needing to work reduced hours for a time, and others stood down from their duties entirely.
“With the closure of our mussel operations we had to stand down around 45 casual staff. We also had to reduce the hours of our permanent staff,” Wood said.
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“That was a duration of approximately four weeks.”
Yumbah operations at Kangaroo Island and Port Lincoln were heavily dependent on water quality and temperature, and as a result, Mr Wood said they had been dramatically disrupted by the algal bloom.
However, while Yumbah has been significantly affected by the crisis, Wood pointed out things were even worse for other companies.
“In many ways, when I look at some of the oyster operators on the Yorke Peninsula that have been closed for months, we were probably relatively lucky,” he said.
Despite the significant impact on Yumbah and other aquaculture providers, accessing support had been difficult.
Existing industry support from state and federal governments was largely structured to favour small commercial fishers, recreational and tourism businesses and biodiversity measures, he said.
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Wood said Yumbah was ineligible for this support due to its size but he supported the government’s commitment to work with the industry to address the devastating crisis.
“[The Department of] State Development have encouraged everyone who has been impacted to talk to them,” he said.
Wood said Yumbah had taken up that opportunity to ensure whatever support becomes available in the future is accessible to the company.
“Our primary point in the submission is that because this is not classed as a natural disaster, packages that would be available to land-based farmers don’t automatically extend to aquaculture, notwithstanding that it’s all climate-related risk,” he said.
The federal government’s reluctance to declare the event a natural disaster has severely limited the industry’s ability to access support, he said.
This refusal comes despite fisheries and aquaculture businesses in South Australia contributing an estimated $788 million in gross state product, according to a submission to the Committee Inquiry from Seafood Industry South Australia (SISA).
In that same submission, SISA said the Port Lincoln seafood industry was a larger employer than the troubled Whyalla Steelworks.
The peak body also explained that the industry could not afford unnecessary concern or risks in the export market or locally, “particularly in sectors like lobster who have only recently regained market access, or in mature markets like Southern Blue Fin Tuna where there is no fish health or consumer risk.”
Yumbah’s submission to the committee said the algal bloom was representative of a paradigm shift in the industry and indicated that governments needed to take a more proactive role in investment to help mitigate the unique risks associated with ocean farming.
“The support that we are interested in engaging with government on is really around co-investment in the future to ensure our industry is resilient to these ongoing risks,” it said.
Wood is delivering an in-person submission to the federal inquiry on Wednesday.
Public hearings start on September 9 at Seacliff, before heading to Port Lincoln on September 10, Ardrossan on September 11 and Victor Harbor on September 12.
