Fish processing and the Russian connection

On the Waterfront

Posted: Thursday, January 30, 2003

On the WaterfrontBy Elton Engstrom

With major canneries in Ketchikan, Excursion Inlet, Kodiak Island and Bristol Bay scheduled to close down, the biggest fish story in Alaska this year is how to process the millions of pounds of salmon that have in the past been handled by Wards Cove Packing Co.

The need is especially acute in Southeastern Alaska, because Wards Cove represents about 30 percent of the canned salmon capacity. One alternative is to allow foreign ships to buy Alaska salmon.

This is an idea that was rejected by the state last year, and as John Winther of Petersburg, a fisherman and processor of king and snow crab and Pacific cod in the Bering Sea, says, it is an option, but first an effort would have to be made to see if U.S. processors can take care of the catch.

For the past days, Oleg Nikitenko, president of Global Seafoods, has been in Juneau, soliciting support for his fish-buying plans. The governor's OK must be obtained before any foreign processors can operate in state waters.

Last Sunday Nikitenko discussed his background and ideas. Nikitenko, 36, is a Russian citizen, born in Vladivostok. His family has a long history in the fish business. His father, Nikolai, was for 12 years the head of one of Russia's largest fishing companies, the Vladivostok Fishing and Refrigeration Fleet. Nikitenko spends most of his time in the United States. He has a home in Bellevue, Wash., and hasn't been back to Russia since 1997. He owns a plant in Kodiak under the banner Global Seafoods North America. It principally processes pollock, cod and halibut. The capacity of the plant is 140,000 pounds a day of pollock and cod, 70,000 pounds by fillet machine and tunnel freezer, and 70,000 pounds in industrial blocks of 16 1/2 pounds each. The industrial blocks are sold to companies like Groton and Van de Camp for additional processing. The fillets are packed in two-pound bags and sent to England and Germany in 1,000-pound totes. The refrigerated vans are sent from Kodiak to Dutch Harbor, where ocean-going cargo liners pick them up. The halibut is filleted and steaked and shipped to the North American fresh market.

Nikitenko hopes to bring into Southeastern waters Russian freezer ships that individually can process 200,000 to 600,000 pounds a day. The pink salmon would be gutted, then frozen whole, transferred to freighters on the high seas, and taken to St. Petersburg, Russia, and to the Russian public, one of the high per-capita users of fish in the world. Nikitenko says fishermen immediately would be able to take fish tickets to a Wells Fargo bank to be paid by letter of credit. When asked what a reasonable amount of credit would entail, he said $5 million to $10 million.

John Winther pointed out after the interview with Nikitenko that foreign processing ships operate under much cheaper standards than the U.S. processing industry, and that the state needs to work with the existing processors to see if they can handle the catch.

There are still three canneries in Petersburg, but the void left by the departure of Wards Cove is a big one to fill. Don Kubley, who is Nikitenko's Juneau representative, says it only wants to buy the surplus pinks that no one else wants, and that Alaska is facing a big run of fish this year and if we don't buy all the fish the fishermen can catch, we'll be forcing the fleet to shut down, and will lose the skill and experience that many generations of Alaskans have built. Nikitenko, according to Kubley, may be a life-saver for the hatcheries as well. The permit that is requested by Nikitenko covers buying operations from Ketchikan to Kodiak, according to Kubley, and must be signed by the governor by the end of February to allow the operation time to be set up.

Whichever course Alaska takes, we are entering a time of trial and anxious expectation.

• Elton Engstrom is a lifelong Alaskan, retired fish-buyer, lawyer and legislator (1964-70) who lives in Juneau. He can be reached at 586-1655.

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