Arnar Sigurmundsson wrote this article for Fylkir in 1982. We reproduce it here with his permission.
Fifty years had passed on the 7th of December 1982 since the founding of Lifrarsamlag Vestmannaeyja and this remarkable anniversary was marked during a general meeting on the 11th of December 1982.
The background to the establishment of Lifrarsamlag Vestmannaeyja can be traced back to the need for a co-operative company to handle livers, instead of these being processed by different operators. There had long been disputes between the health authorities and liver processors over where these production facilities should be located and what health hazards might be involved. The liver processing plants were located close to the harbour and therefore in the vicinity of those houses at the lower end of the town. There had ben proposals to move liver processing west onto the lava grounds to the south of Torfmýri.
At much the same time, Útvegsbanki came to own fishmeal producer Hekla hf, and it also became apparent that Norwegian producers had been able to locate liver processing in towns with no ill effects. It was decided to investigate the Norwegian approach and one of those who took a major part in the process of developing co-operative liver production in the Westmann Islands, Hjálmur Konráđsson, travelled to Norway and Denmark.
A meeting was called following a proposal from the town council and the positive encouragement of the Útvegsbanki managers, Haraldur Viggó Björnsson and Helgi Guđmundsson. Things began to happen rapidly and at a meeting on the 4th of December 1932 of fishermen’s organisation Útvegsbćndafélag Vestmannaeyja the proposal was discussed of whether or not to establish co-operative liver production in the Westmann Islands. Útvegsbanki Íslands hf. had already offered to have the premises of the Hekla fishmeal plant refitted with modern equipment if there should be any will towards the proposal becoming a reality. The bank’s offer came with conditions that agreement would have to be reached on costs and payment terms. A committee of five was appointed to examine the possibility of setting up a co-operative enterprise.
Founding meeting, 7th December 1932
With preparations made, the committee made way on the 7th of December 1932 for the founding meeting, which was opened MP and head of the preparation committee Jóhann Th Jósefsson. Seventy vessel owners as well as the bank’s manager from Reykjavík, Helgi Guđmundsson, and the head of the Westmann Islands branch, Haraldur Viggó Björnsson, attended.
The ideas were presented for a contract with the bank and proposed co-operative use of Hekla to be fitted out as a modern reduction plant. A constitution for the proposed Lifrarsamlag Vestmannaeyja (Westmann Islands Liver Corporation) was put forward. The meeting discussed what equipment would need to be purchased and the company’s constitution, and those present were keen to go ahead with the proposed inauguration and the purchase of Hekla from the bank.
At the close of the meeting the constitution of Lifrarsamlag Vestmannaeyja was accepted, following the vote of 72 of the vessel owners to establish Lifrarsamlag Vestmannaeyja and to task the soon to be appointed board with negotiating with the bank.
At the close of the meeting the first board had been appointed with Jóhann Th Jósefsson MP as chairman and vessel owner Ólafur Auđunsson and Co-operative chairman Hjálmur Konráđsson also appointed to the board. Substitute members appointed were vessel owners Pétur Andersen and Guđmundur Einarsson. Bjarni Jónsson and Sigurđur Ólason were appointed to manage accounts and Bjarni Jónsson was appointed to assist with accounting and payments..
The First Year
1933 was Lifrarsamlag Vestmannaeyja’s first year of activity, while previously there had been at least six liver reduction plants. All of these were closed as the new plant opened, although several maintained their production into the spring season until the new plant was ready in April 1933.
That first year the plant received 1159 tons of liver that were used to produce 462 tons of oil with a yield of approximately 40%. The yield improved the following year and reached 50%. The plant was managed and run by engineer Thórđur Runólfsson who had come from engineering firm Vélsmiđjan Héđinn in Reykjavík which had overseen the installation of the equipment.
There was a staff of eleven during the first year. Contracts were until the end of May and the staff were paid a monthly salary of 200 krónur.
88,000 tonnes of liver
Lifrarsamlag Vestmannaeyja is estimated to have received 88,069 tonnes of livers for processing during its fifty years of production. 52,262 tonnes of oil were produced, as well as 414 tonnes of liver meal between 1934 and 1938.
The company also carried out cold extraction which produces stearin. This production came to 296 tonnes between 1941 and 1950, after which production of cold extracted oil came to an end due to sales difficulties.
Between 1980 and 1982 126 tonnes of liver were canned, and the company’s canning facilities were also used to produce canned roe as well as herring. Canned liver is only an option between February and May.
Half a Century
Like any other fishing enterprise, Lifrarsamlag Vestmannaeyja has seen good and bad times. There have been good years with high oil prices and tough years when the world market price has been low.
Initially oil was exported in barrels, which called for special premises, known as the Steel House, which subsequently housed the canning line. Later on, tanks were built for production and more tanks had too be added when sales were poor so the oil could be stored for the next season. Today the factory is well equipped with tank space.
Lifrarsamlag Vestmannaeyja has always been fortunate with its staff and managers. To begin with most staff were employed only over the winter months, but this soon changed. A smaller staff was needed as the technology improved and now there are six staff. The canning plant employs fifteen people and operates ten months of the year.
The highest production year was 1959 when 4050 tonnes were landed and 2565 tonnes of oil were produced with a 63.3% yield. The lowest year was the eruption year of 1973 when 274 tonnes were landed and 190 tonnes of oil were produced.
The co-operative has the rules that one vote accrues to each 1000 litres of liver that each member delivers, or to each partial thousand litres, while no member may hold more than 20% of votes. These rules have been in place from the outset.
Canning and Cold Extraction
Canned production began in 1980 and the background to this dates back to the board’s discussion of this option in 1976. Equipment was acquired the following year and in 1979 work commenced on refurbishing the building that was completed by the end of the year. Equipment has been steadily increased since the factory opened in 1980 and it is now very well equipped, producing canned liver during the winter and canned herring products at other times of the year.
Lifrarsamlag Vestmannaeyja decided at the end of 1981 to take part in the establishment of a new company to cold extract oil. The company was housed at Lifrarsamlag Vestmannaeyja and began its activities in the middle of 1982. This required the purchase of sophisticated equipment, although there was much that was needed already in place, such as the large and small tanks required for cold extraction.
As well as Lifrarsamlag Vestmannaeyja, liver producers in Ólafsvík, Patreksfjördur and Pétur Pétursson in Reykjavík all own shares in Lýsisfélag hf. Lifrarsamlag Vestmannaeyja owns a 40% share. Oil from Ólafsvík and Patreksfjördur is transported to the Westmann Islands for cold extraction.
Lifrarsamlag Vestmannaeyja has accounted for approximately 20% of Iceland’s production in the past few years. With the addition of Ólafsvík and Patreksfjördur to the cold extraction process, this figure has risen to 25%.
The main reason for the establishment of Lýsisfélag hf was that it had become less easy to sell oil that had not been cold extracted to traditional markets in Western Europe. Buyers were relatively few and it had become a tight market. On the other hand, there were significantly more potential buyers and larger market for cold extracted oil. This supports the policy of increasing seafood values as far as possible and for the work to be maintained in coastal communities.
The cold extraction equipment is highly sophisticated and it is well prepared to meet some tough competition. Cold extracted fish oil has been marketed mainly to the UK and Germany.
50 Years of Management
Jóhann Th. Jósefsson MP was the first chairman of Lifrarsamlag Vestmannaeyja. He remained in the post for almost thirty years until his death on the 15th of May 1961. Jónas Jónsson who had been on the board since 1934 took over took over and served as chairman from 1961 to 1969, remaining a board member until his death on the 31st of October 1971. Martin Tómasson took his place in 1969 and stayed until the end of his life on the 1st of January 1976 and also having been a board member since 1958.
Einar Sigurjónsson, who had been a board member since 1969, took over the position left on Martin Tómasson’s death and stayed as chairman until the beginning of 1979. Haraldur Gíslason was appointed chairman in early 1980 and he had already been on the board since 1974.
Listed below are those who have sat on the board since the 7th of December 1932 as either members or substitute members, in addition to those already mentioned above.
Hjálmur Konráđsson, 1932 until his death on the 17th of December 1933.
Ólafur Auđunsson 1932-1935.
Pétur Andersen, 1932-1940.
Guđmundur Einarsson, 1932-1935.
Ástthór Matthíasson, 1935-1958.
Sigurđur Á. Gunnarsson, merchant, 1953 until his death on the 12th of October 1941.
Tómas M. Guđjónsson, 1940 until his death on the 14th of June 1958.
Ársćll Sveinsson, 1943-1969.
Ágúst Matthíasson, director, 1958-1969.
Óskar Gíslason director, 1963-1969.
Sighvatur Bjarnason, 1969 until his death on the 15th of November 1975.
Hilmar Rósmundsson, skipper, 1969-1974.
Eyjólfur Martinsson office manager, 1976-1979.
Óskar Matthíasson shipowner, 1971-
Stefán Runólfsson managing director, 1976-
Magnús Kristinsson shipowner, 1979-
The present board of Lifrarsamlag Vestmannaeyja (1982) is chairman Haraldur Gíslason, Óskar Matthíasson and Einar Sigurjónsson. Substitute members are Stefán Runólfsson and Magnús Kristinsson. Accounts are held by Hilmar Rósmundsson and Sigurđur Einarsson. Accountancy services are provided by Thorvarđur Gunnarsson.
As has already been mentioned, Bjarni Jónsson was taken on to look after the company’s accounts. He fulfilled this role while his health lasted and until his death on the 3rd of December 1962. Jónas Jónsson took over this work and carried it out until his death in 1971. After that Samfrost took over handling Lifrarsamlag Vestmannaeyja’s accounts under office manager Arnar Sigurmundsson.
Many good people have worked for Lifrarsamlag Vestmannaeyja over the years. We have already mentioned engineer Thórđur Runólfsson who managed production for the first year and another engineer, Guđmundur Jónsson, took over for the 1934 season.
Karl Runólfsson from Keflavík was appointed in January 1935 as factory manager and he stayed until 1940 when he was replaced by Pétur Andersen who had been a board member from the outset and was very familiar with the factory. He remained in charge until his death on the 6th of April 1955 and Páll Scheving was appointed after having already worked there since early 1941. He stayed until 1972, apart from the years 1967-69 when he was forced to step back due to ill health, although he remained an active member of staff until the eruption in 1973. During his illness, Jakob Guđmundsson and Ásbjörn Guđmundsson stepped in, both of them long-serving members of the Lifrarsamlag Vestmannaeyja staff.
Björn Dagbjartsson monitored the oil production during the years he was at the FIVE research establishment and subsequently became director of the Fishing Industry Research Institute in Reykjavík.
The present (1982) factory manager, Alfređ Einarsson, joined the company in 1971 and took over as manager in 1972. Many staff have worked there for long periods. Júlíus Snorrason is notable among these after having worked there since 1960 and is still hard at work, having also been one of those who took part in founding Lifrarsamlag Vestmannaeyja on the 7th of December 1932.
At an important crossroads it is nothing unusual to look forwards and to look back at the past. At this point the future of Lifrarsamlag Vestmannaeyja looks bright. The company has grown in recent years and is ready to take on new challenges in the form of the tough competition presented by the canned foods market. Its expansion into cold extraction have guaranteed its security and lengthened the working time. Long may Lifrarsamlag Vestmannaeyja continue and benefit the community around it.
We can add to this that at the end of 1988 Vinnslustöđin hf. became the sole owner of Lifrarsamlag Vestmannaeyja hf., which had until then been owned jointly by Vinnslustöđin, Ísfélag Vestmannaeyja, Hrađfrystistöđin and Bergur-Huginn. Vinnslustöđin continued to run Lifrarsamlag Vestmannaeyja as a company in its own right until the end of 1991 when it was absorbed into Vinnslustöđin.
Following the period described above in Arnar Sigurmundsson’s article, Lifrarsamlag Vestmannaeyja’s activities declined, mainly due to reduced amounts of liver being landed. In recent years the Lifrarsamlag Vestmannaeyja equipment and premises have been leased to Lifró ehf, run by Jóhann Jónsson. Part of the premises are also now used for the Vinnslustöđin net loft and engineering department