The board of Westman Islands fishing and processing group Vinnslustöðin has announced cutbacks in response to a number of adverse factors.
The company states that all plans to renew and replace fishing capacity have been put on hold, and as this is not seen as sufficient to plug the financial gap, the company is shutting down subsidiary company Leo Seafood. This will result in 50 redundancies.
Increasing staff costs and the strength of Iceland’s currency have prompted the decision to shut down Leo Seafood after two years of negative results, despite efforts to streamline activities – and the increase is the resource levy is cited as a further challenge that led to this outcome.
The company describes the decision as ‘difficult but necessary.’
Leo Seafood’s production is to be transferred to Vinnslustöðin’s saltfish production.
Leo Seafood and groundfish trawler Thórunn Sveinsdóttir were acquired by Vinnslustöðin in 2023, when it was announced that both would continue in operation.
The company states that it embarked on significant acquisitions and amassed debts, in the expectation that its taxation levels would remain unchanged – but the situation has changed since the government revisited the country’s resource levy, placing a higher burden on larger operators.
