Anchorage seafood plant considers processing farmed fish

Posted: Sunday, November 04, 2001

ANCHORAGE (AP) -- Alaska Seafood International might use some farm-raised fish to help make the business work, the plant's chief executive said.

Fish farming is illegal in Alaska and despised by many fishermen as a competitive threat.

For now, ASI plans to make sauced and breaded fish portions and appetizers using Alaska fish such as salmon, halibut and cod, said chief executive Russell Schreck. However, it's possible the company could use farm-raised fish such as warm-water tilapia or catfish, he said.

The imperative for ASI, a start-up company stalled by money and management problems, is to start making goods and a profit, Schreck said. Farmed fish and wild species such as tuna not usually found in Alaska waters might be part of the equation.

''That doesn't make us a traitor against Alaska seafood,'' he said. ''If we ever need product not grown in Alaska, if Alaska can't provide us what we need, we'll find it. But we're committed 100 percent to Alaska seafood and to Alaska fishermen.''

Schreck, who specializes in turning around struggling companies, was hired by Sunrise Capital Partners, a New York investment firm that spent $5 million in May for a 51 percent stake in the stalled seafood company.

The state of Alaska took 29 percent and acts as landlord to ASI, which occupies a 202,000-square-foot building built in the late 1990s with $50 million in state money.

Thus far, the ASI vision of turning Alaska's abundant fish into processed goods in-state has been unsuccessful. Money and management troubles plagued the project from the outset, the plant never made significant sales, and it never hired anywhere near the promised 450 workers.

Schreck has turned out almost all the plant's original managers and tried to inspire ''a whole new ball game'' within the plant. It now employs about 140 people, he said.

Lawsuits and overdue bills that once swirled around ASI have been settled and the company is within weeks of shipping major orders, including one to warehouse-store giant Sam's Club. Schreck wouldn't disclose the size of the orders.

ASI has sales agents in Boston, Chicago, Atlanta, Dallas, Los Angeles and other cities, and it's making good progress in lining up major buyers, he said.

ASI has about 4 million pounds of salmon and 1 million pounds of halibut in cold storage, and at full bore the company someday might generate up to $400 million in sales annually, Schreck said.

So far, ASI has purchased no non-Alaska fish, he said.

The Sunrise plan has one dark cloud, however. Schreck said he's been unable to get the line of credit the company promised when the state recruited Sunrise to take control of ASI. In the alternative, ASI has asked its partners, including the state and a Taiwanese bank, to invest more money.

Sunrise itself has chipped in $4 million more and the state might make $1.85 million in additional rent breaks, said Bob Poe, executive director of the Alaska Industrial Development and Export Authority, the state agency that owns the plant building.

A longtime ASI watchdog, state Sen. Kim Elton, D-Juneau, said he probably would not object to the company using farmed fish if it helped the project succeed. Use of farmed salmon would be hard to swallow, however, as skyrocketing global production of those fish has badly eaten into the value of Alaska's wild salmon.

But private seafood companies that pack fish in Alaska also deal in farmed fish, Elton said.

''So legally, morally, I don't think we can hold ASI to a higher standard,'' he said.

Schreck said it's simple: If a big customer such as Sam's Club or grocer Albertson's wants a product made from tilapia, a popular farmed white fish that doesn't live in Alaska waters, ''I'm going to sell them that. This is a business that's designed to make a profit.''

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