David McCarthy
Marine Harvest: 1988-1995
McCarthy joined Unilever in 1961 straight from Oxford University and National Service and worked overseas for a number of years before taking over at Marine Harvest in 1988. ‘I had nothing to do with fish farming until then’, he recalls. ‘I was in Malaysia for six years and then I spent three years in Chile.’ This was in the mid- to late-Eighties. ‘I became interested in fish farming because at the time Lever Chile was introducing salmon farming, with all of the expertise coming from Marine Harvest.’
In 1988, McCarthy was asked by Unilever to run Marine Harvest from its Edinburgh office, which at the time had around 30 sites on the west coast of Scotland. ‘I also had responsibility for the Chilean operation’, he explains. ‘When I joined things were very problematic. Marine Harvest had a dominant position within the Scottish industry but the company had been expanding rapidly and had all of the problems associated with that. We had too many fish, too many fish on each site, a lot of disease and morale was quite low. I felt that my remit was, effectively, to turn the company around.’
As McCarthy explains, at the time Marine Harvest was making huge losses and it was around this time that Unilever made the decision to get out of agribusiness and, in 1992, sold Marine Harvest to Hanson plc. ‘As part of the deal I stayed to run Marine Harvest’, he says. ‘And, by the time I retired in 1995 – when Hanson sold the business to Booker McConnell, we’d turned the business around and it was starting to make money. The seven years I was there were absolutely fascinating;
we had to do a number of things in order to turn the business around, they were exciting times.’
One of the main challenges was to deal with the fallout from the rapid expansion that took place during most of the Eighties. ‘Once Unilever saw that the salmon production process worked, understandably they wanted to see a return on the millions of pounds they had invested over the years’, McCarthy explained. ‘To that end, my predecessor had been asked to increase the number of sites, and the number of fish in each site, in order to increase volume and, so it was assumed, profits. Unfortunately, it wasn’t that simple and the sheer number of fish made it very difficult to control disease – furunculosis and sea lice together, for example, was extremely difficult to control – and the extra staff on each site created management and training issues.’
The key to changing things was, as McCarthy says, ‘a matter of getting out and speaking to the troops. I was also helped by having very good people, men such as my colleagues on the Board, John Lister and Angus Morgan, and Ralph Baillie and Steve Bracken on the ground. After listening to the farmers, we went to the top of Unilever and told them we were going to halve the number of fish in each site. We explained that they would lose money initially, but to keep the faith. So, in spring 1989/90 we drastically reduced the numbers of fish. It took two or three years to get everything right but we were confident that we had the right approach.’
Another important thing they did at this time was focus on reducing the stress on their fish. ‘Stress and disease go hand in hand in an alarming way’, says McCarthy. ‘One of the ways in which we successfully reduced stress was stopping cleaning nets with the fish in situ. We began leaving two pens empty, into which we would swim the fish whilst we cleaned the nets. Counting fish had always been a stressful operation. They had to be lifted out of the sea to be counted in a gutter by someone with a clicker, which was very primitive. So somebody came up with a device that counted, and graded, the fish as they swam from one pen to another. These were all important innovations.’
One of the other innovations during McCarthy’s leadership, one that was pioneered by Marine Harvest, was the fallowing of lochs. ‘Water exchange on most of the lochs is around 37 days’, he explains. ‘So we decided that fallowing the loch for between six to eight weeks after harvesting would significantly reduce the impact of disease. However, because there were often more than one company operating on each loch, we also realised that fallowing would only work if every farm on the loch did it, and at the same time. This led to the first management area agreement with McConnell Salmon on Loch Sunart.’
The combination of these measures, along-
In 1991, within a few months of putting the smolts to sea, we had a larger biomass than previously with double the number of fish
side others such as the introduction of yearclass sites, produced some remarkable results. ‘In 1991, within a few months of putting the smolts to sea, we had a larger biomass than previously with double the number of fish’, recalls McCarthy. ‘The fish were growing incredibly fast; it was a great moment, and a
totaltotal vindication of our approach. It is certainly one of my proudest moments working for Marine Harvest.’
It is perhaps slightly ironic, McCarthy reflects, that just at the time it was coming together, Unilever decided to sell Marine Harvest. ‘I remember when the people from Hanson plc came in to look at the books’, he says. ‘I told them to ignore the back data, that the business was in a good way. And, indeed, the first month under new ownership, Marine Harvest made a profit. The demand for salmon had always been there, so once you got the production right it was a very good business.’
When McCarthy arrived in 1988, the new processing factory at Blar Mhor had just opened. ‘At the time, as well as gutted salmon, we were also cutting the salmon into fillets and steaks and selling them directly to retailers’, he explains. ‘However, this required extra manpower and equipment, and the fact was that the retailers were giving us no margins whatsoever. Plus, I felt that there were other processors out there with the relevant ex- pertise. Our expertise was in growing quality salmon quickly, not cutting fish. So the last thing I did before the Americans took over was close down that part of the business. It was a difficult time, as it led to the loss of 200 jobs, but we felt it necessary at the time.’
McCarthy left Marine Harvest in 1995 when Booker McConnell bought the business. ‘I was asked to stay on but I decided to retire instead. I had found my time at Marine Harvest an incredible business experience; a memorable and exciting challenge.
The demand for salmon had always been there, so once you got the production right it was a very good business”