Omega Protein Corp. (NYSE:OME), a nutritional product company and a leading integrated producer of omega-3 fish oil and specialty protein products, today announced a plan to streamline its Gulf of Mexico operations and increase efficiencies through the permanent closure of the Company's menhaden fish processing plant located in Cameron, Louisiana and the redeployment of certain vessels from that plant.
The strategic decision to close the facility and redeploy these vessels is the result of Omega Protein's efforts to improve financial performance by increasing the utilization of its existing assets and reducing maintenance-related capital expenditures. After a thorough review of its fishing facility operations and anticipated future capital requirements, the Company believes that consolidating its two western Gulf of Mexico facilities into a single facility based in Abbeville, Louisiana would improve long term operating and capital efficiencies.
Accordingly, the Company developed a plan to close the Cameron facility and re-deploy a portion of that facility's vessels and employees to the Company's other Gulf Coast facilities located in Abbeville, Louisiana and Moss Point, Mississippi. Of the seven vessels that fished from Cameron in 2013, the Company expects to reassign four vessels to its other Gulf of Mexico operations for fishing in 2014.
"In 2013 we advanced our goal of building a more balanced nutrition company, and while we made a tough, strategic decision to close our Cameron facility, we believe this will better position us for future growth as we consolidate operations and reallocate assets in the Gulf to create a more efficient fishing operation," commented Bret Scholtes, Omega Protein's president and chief executive officer. "Going forward, we expect to continue to experience robust demand for our products and our team remains focused on enhancing control over the manufacturing process, creating avenues for organic growth, and developing additional value-added products."
It is not known at this time how many or which employees will be rehired at other Omega Protein facilities. Those employees at the Cameron facility who will not be offered positions will be offered financial assistance in addition to staffing placement opportunities.
The Company expects the closure process to begin immediately and to occur over the course of 12 to 24 months. The Company expects to recognize impairment, lease termination and employee-related charges of $8 to $12 million, primarily in the fourth quarter of 2013; additional decommissioning and other charges may also be recognized in the future.