Kyle Murdock, 24, attended Worcester Polytechnic Institute before dropping out to start Sea Hag Seafood in 2010, a lobster processing company in St. George. In October, Murdock was named one of eight international winners of the Hitachi Foundation’s Yoshiyama Young Entrepreneur’s Program, which provides a $40,000 grant and business development and mentoring assistance. Sea Hag Seafood has about 65 employees during the height of processing season in August. Murdock said his company ships roughly 1 million pounds of lobster a year, with revenues of about $10 million annually. His annual salary is about $40,000.

Q: With the lobster processing industry concentrated in Canada, why did you start a processing business in St. George?

A: I grew up in the industry and after the price crash of 2008, I think everyone wanted to make a difference and help the industry recover. I was driving home from college to visit my parents for the weekend and I knew we were going to have the endless debate about why there are no lobster processors in the state. That’s because no one is starting them.

I’m the only male in my family who’s not a lobsterman. My dad, both my uncles and my brother are all lobstermen and I wanted to do something to make an impact for my whole community.

Q: What kind of hurdles did you face?

A: Like anything in the seafood industry, it’s extremely low margin, which makes it very high risk. And it requires a massive capital investment. The equipment is very expensive. With the equipment, it costs just as much to move it as to put it in, so you have to figure out what you’re going to need in five or six years and buy that initially and carry that expense for several years.


Q: How did you raise the capital you needed?

A: I raised a big chunk from private investors. We got some pretty substantial loans and I dealt with a local bank because I felt it was good to keep it right here in the community. We also got some grants from the federal government and the state and some tax incentives from the state. It was probably somewhere around $2.5 to $3 million total. We had identified a really great factory that was on the market and it probably wasn’t going to be there forever. With the industry hopefully climbing – it’s like what they say about the stock market, you don’t want to buy when the market is high – we want to be part of that recovery and got in while there was an opening.

Q: How do you deal with such a volatile business?

A: Very carefully. That’s the truth of it and that’s why it can be so hard to operate a seafood business.

It’s a big learning curve. I knew there would be a seasonality component to it, but I didn’t really know how different it could be from one day to the next. It takes a lot of hands-on management to run every day. I run cost and price projections every day. It comes down to whether we can make money on the lobster we’re bringing in. If we can, we operate and if we’re going to lose money, we don’t operate. This season we weren’t open more days than not. Last season we were. Certainly we want to expand our operations here to maximize production and minimize plant downtime. We want to start finding ways to bring our product into new markets.

It’s a problem with the seasonality of the industry and because we’re new, we don’t have relationships or other products we can work on during the times we’ve had to slow down on lobster.


The things that make the most sense (for additional products) are shrimp and crab. Obviously, there’s not going to be a shrimp quota this year, but we’ve been processing crab as an experiment.

Q: Where does your lobster go?

A: We’ve sent it pretty much all over the world. We send it to Boston and our customers distribute it all across the South and there’s a major customer out West who sends the lobster all over the world. I know a couple of containers ended up in Australia this spring.

Q: Is it difficult to compete with the established Canadian processors?

A: We have some competitive advantages over the Canadians and they have some advantages over us. During the height of the shedder season, we’re closer to the source and suffer less dead loss, but they’ve been around the whole time and have markets that we dream of getting in the next five or 10 years. So they get better value out of their products. From what I hear, the customers they’re selling to are the people we want to build toward selling to because they’ll pay more for the product. They also get help from their government.

Q: Was it hard to drop out of college to start this?

A: My mother very much prefers the word “withdrew.” It wasn’t the hardest decision, I always had the option of going back, but this opportunity I knew it wasn’t going to stick around and would expire if I didn’t make it my life and go out and seize it.

Edward D. Murphy can be contacted at 791-6465 or at:

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