McConalogue announces €45 million Brexit Seafood Processing Capital Support Scheme -  driving value-added transformational change

Published on: 13 May 2022


Minister for Agriculture, Food and the Marine Charlie McConalogue today announced approval for a scheme which will provide €45 million in funding for capital investment projects in seafood processing enterprises.

The scheme is based on a recommendation of the Seafood Taskforce which was established by Minister McConalogue to assess the impacts of Brexit and the Trade and Cooperation Agreement on the fishing sector and coastal communities. The Taskforce recommended that the sector be provided with a stimulus to drive transformational change and thereby overcome constraints arising from Brexit and incentivise change through the provision of graduated grant aid rates for capital investment projects in the industry. This scheme is proposed for funding under the Brexit Adjustment Reserve

Announcing the approval of the scheme, the Minister said, “Our Seafood Processors are of vital importance for our coastal communities, sustaining over 4,000 jobs and supporting the local economies in which they operate. I am pleased to announce that this new scheme will introduce significant levels of support to enable processors develop their enterprises, navigate the challenging trading environment and support jobs in the seafood sector.” 

In line with the Taskforce recommendation, the scheme is designed to provide greater levels of funding to those capital investment projects which result in higher value-added activities. It will, in particular assist seafood processors seeking to move away from commodity production to the production of higher value-added products. It will also help and to those seeking to diversify their product offering and enter new markets. Funding will also be available for seafood processors seeking to improve environmental performance and those aiming to achieve greater production efficiencies.  

Minister McConalogue added: “I believe this scheme will significantly assist processing enterprises to adapt quickly, to become more sustainable in both a business sense and environmentally. Through the supports on offer, processors will be able to invest in innovative equipment, diversify their product lines and reach new, valuable markets.”

An Bord Iascaigh Mhara (BIM) will be administering the scheme, and the Minister has requested that BIM open its call for applications as soon as possible. Due to the time limitations placed on BAR funding, investment projects must be completed before the end of 2023 to qualify for funding. 

Minister McConalogue concluded: “The suite of schemes and measures I have announced will support fishers, the wider seafood sector and the coastal communities which are most dependent on the sea for their livelihoods. The scheme will assist the Seafood Processing industry in making transformational change and moving further up the value chain. These investments will ensure that Ireland maintains its reputation as a source of premium quality seafood, protect food supply chains in times of uncertainty, grow coastal economies and sustain the natural environment”

Notes for the Editor

The fish processing sector sustained 4,355 jobs, paid €145 million of wages, and contributed €347 million to the Irish economy in 2018 and is particularly important for some of Ireland’s more peripheral and rural areas. Due to Brexit, the sector has faced a myriad of challenges including reduced supply and reduced access to markets.

 

The Brexit Adjustment Reserve (BAR) is a special one-off emergency instrument which aims to provide support to counter the adverse economic, social, territorial and, where appropriate, environmental consequences of the withdrawal of the United Kingdom from the Union in Member States that are most adversely affected by the withdrawal, and to mitigate the related negative impact on the economic, social and territorial cohesion.

 

In its report in October 2021, the Seafood Taskforce made sixteen recommendations to leverage BAR funding to support the seafood sector and coastal communities respond to the challenges posed by Brexit. Report of the Seafood Task Force – Navigating Change In respect of the Seafood Processing Sector it stated: “The Task Force recommends facilitating substantial investment in seafood processing enterprises to support greater utilisation of raw material, improved efficiency, developing new offerings, demonstrating quality and sustainability as well as building capability and innovation through people and processes. The investment will provide temporarily increased graduated grant aid rates, between 30-50%, during the period of BAR funding, to provide an immediate stimulus to overcome some of the constraints arising from Brexit. It is recommended that the graduated rates should reflect the level of added value.”

 

This scheme seeks to support the Irish processing sector to engage in transformational change, mitigating the effects of the TCA/Brexit while also building a more environmentally friendly, sustainable and competitive enterprises which serve the EU and wider global markets, create higher levels of employment more locally, and make better and more sustainable use of Irish landed or imported raw material. It is aimed at supporting industry led transformative capital investments that enable the sector to focus on “creating more from less” in the wake of reduced supply of raw material. Specifically, the scheme seeks to:

 

  • Reduce commodity exports of fish below 50%, as targeted by FoodWise, by supporting processors in moving further up the value chain and remain profitable in the face of lower volumes of raw material.
  • Add significant value to fish landings, translating to higher quay-side fish prices for fishers and greater expenditure in local economies.
  • Scaling up of Ireland’s seafood processing sector to allow established enterprises compete with international rivals and to allow smaller enterprises to better compete in a more complex export trading environment.
  • Increase employment opportunities in seafood processing and within the same coastal communities, helping to offset loss of employment of fishing vessel crews and in wider communities affected by Brexit.
  • Enhance professionalisation of seafood processing enterprises, fostering the growth and sustainability of these enterprises.
  • Improve processing infrastructure enhancing the attractiveness of Ireland’s fishing ports for landings by foreign vessels fishing in Ireland’s exclusive economic zone.
  • Enhance energy efficiency and reduce carbon emissions of Ireland seafood processing sector to ensure sustainability of the sector and facilitate processors in meeting customer requirements for high environmental standards.
  • Increase profitability levels of seafood processing enterprises, translating to increased corporation tax revenue.

 

These supports will be available to all onshore processors in Ireland, which are Sea Fisheries Protection Authority approved and fall within the EU Commission classification of SMEs. Rates of support are graduated according to the degree of value add achieved and eligible enterprises may apply for more than one investment type, as a package of support.

 

The scheme will offer three rates of support for capital expenditure. Projects funded under this scheme must be completed before the end of 2023.

 

Investment Type 1: Tier 1 Transformational Processing Equipment

This investment type is targeted at funding secondary processing equipment which is clearly aligned to a product and/or market diversification strategy, to assist processing enterprises in moving away from commodity production to production of higher value-added products and to further integrate the supply chain. 

Grant Rate up to 50%

 

Investment Type 2: Tier 2 Transformational Processing Equipment and Energy Efficiency Investments

This investment type is targeted at elevating enterprises beyond primary processing to produce value added products for earlier points in the supply chain than catered for in Investment Type 1, products for non-human consumption, and products derived from the transformation of waste, which support a product and/or market diversification strategy.

Investments in renewable energy sources AND enhancing the energy efficiency of buildings in which transformational processing equipment is housed, is also covered by this investment type.  

 

Grant Rate up to 40%

 

Investment Type 3: Primary Processing Efficiency and Facilities investments

This investment type is aimed at supporting investment in quality, competitiveness and efficiency improvements in primary processing and/or in fundamental equipment and capital works which support secondary processing and are aligned to a product and/or market diversification strategy.

Grant Rate up to 30%

 

The Scheme will be administered by Bord Iascaigh Mhara and further details will be available from BIM at bim.ie/fisheries/funding/