III. Mission and Goals of Study

The grant under which this study was conducted by the Gloucester CDC was awarded to a winning bid in answer to the request for proposal # 7773 issued by the City of Gloucester in February 2001. The RFP was to conduct an economic development project designed to establish the landing at Gloucester plants of pelagic fish caught from traditional Gloucester waters and the processing of such fish at local plants for human consumption.

The scope of work as outlined in the RFP is as follows:

1.     Prepare a strategy for sale and production of pelagics for human consumption

The in-depth analysis of the conditions of the industry lead to the suggestion of the following strategy for the utilization of pelagics for the benefit of the Gloucester economy. It is proposed that the pelagics be transformed into surimi. Surimi basically is pure fish protein. It is proposed that, through the technological methodology discussed in Section VII.b of this report, the proteins of pelagics be separated from oils and the minerals contained in the fish; and that surimi be sold on the worldwide commodity market. The rationale for selection of this proposed strategy will appear more evident through an analysis of alternative utilization possibilities. This analysis is contained in Section VII.a of the report.

2.     Identify and assist industry members in obtaining permits and licenses as necessary

There are no special permits that need to be obtained to create a surimi plant in Gloucester. All that is necessary for the proposed plant is to respect appropriate rules and regulations that pertain to the utilization of water and the disposal of waste as well as all other standard questions of public health and general welfare. These issues are briefly discussed in Sections VII.b and IX of the report.

3.     Promote technical assistance to the local industry and the fishermen

Offers of technical assistance have been extended from the University of Massachusetts Marine Station and the Regional Office of the National Marine Fisheries Service to the Gloucester Community Development Corporation on behalf of the local fisheries industries and the fishermen. Contacts for technical assistance have also been made with Harvard University, the Massachusetts Institute of Technology, Massachusetts Electric Company (MECO), and the Conservation Law Foundation. We are exploring many other possible avenues. The success of the proposed plan of action mostly hinges on securing such technical assistance.

4.     Initiate a fishing, processing and marketing operation designed to promote the sale of pelagics to the public for human consumption

The harvesting of pelagics for use for human consumption mostly involves use of well-known and readily available technology. The technology calls for the use of Refrigerated Sea Water (RSW). This technology is described in Section VII.b of the report.

A model plant for the production of surimi using the financial arrangements and technology described in Sections IV.a and VII.b of the report is now being built in Iceland and is scheduled for operation in September of 2001. The construction of this plant can be easily duplicated here in Gloucester or elsewhere in the world. So far, we have studied only the schematics of this operation. Details will be analyzed only after a number of strategic decisions concerning size of plant, ownership patterns, and finances have been appropriately decided.

Surimi is a worldwide commodity whose demand is steadily increasing. It is a seller's market. No marketing efforts are needed to sell the product.

5.     Issue periodic reports

In May 2001 the Gloucester CDC issued an Interim Report on this project. The present report completes the formal obligations under the present contract. However, we plan on continuing the effort to see that the creation of a surimi plant in Gloucester is brought to fruition, and we will be happy to make further reports available to all interested parties.

6.     All activities herein must benefit the economic adjustment of the City of Gloucester

The community at large obtains two direct benefits from any type of business development: a reduction in unemployment and a relative amount of tax revenue. In addition to these traditional benefits, we are exploring the possibility of enlarging the ownership base of the venture and streamlining management functions. Both goals are designed to increase the profitability of the venture, so that the chances of success increase and benefits remain within the community in larger quantity and for longer periods of time

It is because of the paramount concern for the benefit of the community as a whole that we are exploring a variety of possible financial alternatives for potential use by Gloucester Fish Inc.

Because of this paramount concern three papers have been made an integral part of the report. The paper entitled "Fisheries Renewal" addresses three fundamental issues: first, the issue of interrelationships among stocks of fish; second, the issue of functional integration of management tasks; and third, the issue of financing. The paper on ITQs addresses the fundamental issue of the legal regimen under which exploitation of the natural stocks of fish can take place. And the last paper on the dynamics of the economic system lays the groundwork for an analysis of the proposed surimi plant as an integral part of the community at large.

In brief, if the creation of Gloucester Fish Inc. has already involved the expenditure of public funds and it will involve the expenditure of additional public funds to come into existence, it is hoped that it will pay the community back by functioning with full recognition that the internal as well external consequences of its actions have to turn to the benefit of the community at large.