TEDA to study need for latest project

After identifying one’s product it is a leading step in basic business development, define your target market and research the opportunities.

With more than three years experience of discussing the possibilities, conducting studies and discovering challenges related to opening a regional cold storage facility, the Terrebonne Economic Development Authority executive committee has decided to recommend to the TEDA board of commissioners that it take a step back and determine among fishermen if there is a market present that would justify sinking almost $4 million in yet to be secured federal grant money into such a project.

After reviewing a survey, conducted by the LSU AgCenter, that questioned only 10 bayou region shrimpers, eight shrimp processors, one oysterman and one oyster processor, many of whom are already making use of existing facilities in New Orleans, the certainty of a profitable cold storage facility in Terrebonne Parish could be in question.

According to the LSU AgCenter report, those approached for comment thought Houma was too large not to have a cold storage facility available for seafood producers. It also indicated that in order for it to be successful, a diverse product mix would be necessary.

TEDA had sold its intentions in building the facility based on offering a safe harbor operation for regional fishermen. During months of conversation, the economic development group also considered making use of a cold storage facility as a distribution center and as a business incubator.

Looking over a feasibility study, the executive committee found that, based on what TEDA anticipates having to spend on building and operating a cold storage facility, they would be able to construct a structure approximately 15,400 square feet with a minimum freezer capacity of 210 cubic feet.

TEDA staff researcher and grant writer Lisa Maloz told committee members that unless there is enough demand in the region to keep the facility full, its usefulness could become doubtful.

Committee member Clarence Williams said he would like to see greater input into the project coming from the seafood industry. “Have we had much discussion with fishermen?” he asked.

Committee member Lori Davis said it would be difficult to convince fishermen to make use of a new facility if they already are comfortable with storage and distribution centers that they are presently using. “Trying to convince them now is really hard,” she said. “TEDA needs to interact with fishermen and get their feeling.”

It is the attitudes of fishermen and processors that Houma-based Gulf Fish Inc. General Manager Danny Babin said could leave TEDA’s cold storage plans melting unless the organization gets back to focusing on the fundamentals of such a facility.

“I thought about cold storage years ago with some other processors and it never did come to pass,” Babin said. “We talked to [TEDA] probably four years ago, but as you know, the needs and wants of this parish have changed tremendously in the last year [primarily because of the BP oil spill in April 2010.]”

Babin said the seven processors he knows in Terrebonne Parish have told TEDA it cannot be assured they would use the cold storage facility because they took a 50 percent loss last year and even now are not generating as much product as they have in the past.

“We’ve all made different plans,” Babin said. “The point is if it can sustain itself without the seafood industry, then let’s build it. If you are going to rely just on the seafood industry to do it then it may not make it.”

Babin said his wholesale business on La. Highway 311 is capable of holding approximately 7,000 pounds of product. “I have been using cold storage away from here for years because [the services I use] are tied into truck lines that they use,” he said.

While there was a definite need for a cold storage when TEDA began discussing it, Babin warned that the function of such a facility would need to be changed from its original concept.

“A cold storage is simply a place to store product,” Babin said. “That’s what we use. If they are competitive, then I would definitely use the cold storage, but because of the downturn in the economy, because of the hurricanes we had a few years ago [and] the BP oil spill, the industry is entirely different now than it was when they originally started talking about building a cold storage here.”

“So far, I’m still where I was six months ago,” said TEDA Board Chairman Don Hingle, who confirmed he was not sure he understands with certainty the profitable demand for a cold storage facility.

The committee recommended that public notice be offered, requesting input regarding cold storage from those directly involved with the fishing industry. “If we get no response or very little response, there is your answer,” he said.

Terrebonne Economic Development Authority Executive Committee members, from left, Clarence Williams, Lori Davis, Don Hingle, Ken Jenkins and Colin Seibert look over material as they consider sending a cold storage facility recommendation to the full board of commissioners. MIKE NIXON