Seafood plant to ramp up for operations in July

Posted: Friday, May 18, 2001

ANCHORAGE (AP) -- Alaska Seafood International could be producing packaged fish products by early July, the company's new chief executive said this week.

The start-up fish factory has been dormant since last August, when it laid off its 40 production workers because of financial troubles.

Last week a New York investment firm, Sunrise Capital Partners, closed a deal to buy a 51 percent stake in ASI. John Brady, ASI's former chief executive, resigned effective Wednesday, and Russell Schreck of Sunrise has taken over.

Nearly all the company's other top managers have left.

The Alaska Industrial Development and Export Authority, a state agency, owns 29 percent of the operation, with most of the rest held by Taiwanese investors. AIDEA is ASI's landlord, having spent about $50 million to build the 202,000-square-foot factory in the late 1990s.

Bob Poe, AIDEA chief, said Sunrise offers hope that ASI can finally carry out its vision of doing advanced seafood processing in Alaska and employing hundreds of people.

But Poe cautioned, ''They really only have one more chance.''

That's all Sunrise needs, said Schreck, ASI's new chief executive.

''What this company tried to do a few years ago, we are going to do it because we have the money to do it,'' he said.

Sunrise paid $5 million for its stake in ASI, but it also has pledged to line up operating cash to buy raw fish and other processing materials and get the factory producing again. In all, up to $32.5 million could go into reviving the plant, Sunrise officials said.

The restructured ASI also will benefit from rent breaks with the state. ASI is scheduled to make its first monthly rent payment of $360,000 in October 2002. But a third of that amount won't be due unless the company passes a certain profit threshold. AIDEA will be entitled to convert unpaid rent into a bigger share of the company, Poe said.

The Sunrise deal also settled some lawsuits swirling around ASI, most seeking payment of debts.

State officials have, for many years, talked about a value-added seafood processing industry for Alaska. Like the state's other natural resources, much of the state's seafood leaves the state without much value added.

But established Alaska seafood processors, most of them based in Seattle, have never given ASI much chance of success because of its formidable distance in Anchorage from fishing grounds and Outside suppliers.

Schreck described himself as an avid trout fisherman and chief executive for hire with much experience in either starting up or turning around a diverse range of companies, from food to software. He said he earned a master's of business administration from San Jose State University and once taught there.

''I am known as someone who comes in and makes companies more profitable,'' Schreck said.

Sunrise specializes in acquiring and turning around distressed companies.

The original ASI concept was good, just poorly executed, said Joseph A. Julian Jr., a principal with Sunrise in New York.

Schreck said he wasn't sure how many people the plant will employ at the restart in late June or early July. He said the company will turn out packaged halibut, cod and chum salmon portions with glazes and coatings, as well as goods like salmon burgers and fish tenders.

He said the Alaska seafood industry, which depends on seasonal wild fish harvests as opposed to fish farms that can produce steady supplies year-round, ''has a bad name in the Lower 48 -- not dependable, not quality, a lackadaisical attitude.''

The ASI plant will operate all year using fresh or frozen fish and will use its neighbor, the Anchorage airport, to zip out orders, Schreck said.

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