Agreement could send more fresh fish to Asia

Contract creates air cargo-trade exchange

Posted: Sunday, February 04, 2007

A nonprofit group in Anchorage and the owners of a Chinese free-trade zone have signed an agreement that may broaden market opportunities for Alaska seafood.

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Anchorage Economic Development Corp. President Bob Poe said he signed a contract in January with Beijing Liqiao Bonded Logistics Development Corp. to create an air cargo-trade exchange that would carry fresh Alaska salmon to Chinese processors.

Salmon, cod, halibut and other Alaska seafood is now mostly exported to Asia by ship, which takes longer and requires the fish to be frozen.

Money that would be spent on higher air transportation costs would be saved by using the cheaper Chinese labor force to process the fish, Poe said.

"If you substitute transportation for really low wages, we really think this can pay off," he said. "We are trying to capture as much value as we can before the fish gets too old."

Fish such as salmon can last fresh for roughly 10 days, which is why his company freezes the seafood it ships to China, said Mike Erickson, president and co-owner of Alaska Glacier Seafood.

He said he had not heard of the agreement, but he did not think it would have an impact on Southeast Alaska.

Neither did Eric Norman, vice president and general manager of Taku Smokeries and Fisheries, who doubted that it would be cost-effective to use such an expensive method of transport to haul seafood.

"I'd like to see a map on that one and see what kind of savings you would get," he said. Taku does not do any business with China, he said.

The Li Qiao Free Trade Zone is located roughly 2.5 miles from the Beijing Capital International Airport and is owned by Beijing Liqiao Bonded Logistics Development Corporation.

It is the first privately owned free-trade zone in China and also serves as a manufacturing and warehousing area for several major U.S. and Chinese corporations. A free-trade zone, or "bonded zone," allows companies to import merchandise without going through formal customs procedures or paying duties.

The arrangement would mean that headed, gutted, and chilled seafood would be flown to the Beijing free-trade zone. There, they would be processed for shipment to Chinese markets or sold fresh.

Poe said that the demand for fresh fillets has dramatically increased and that the arrangement would increase the value of Alaska seafood.

"Now you have these fillets, and within a matter of a day or two it can go to any market. The population in Beijing is 20 million in the city, 38 million people (in the surrounding area). That is essentially like the West Coast of the United States. They eat fish one out of every two meals," Poe said.

China has become a larger player in the market for Alaska seafood in recent years, and Erickson said he was not surprised to learn there was movement in forming such an agreement.

But can it work?

"It depends on how badly they wanted the product," Erickson said. "China is a long ways away. It is kind of an expensive item to do by air."

As part of the arrangement, the Chinese could send products by air to Anchorage, one of the busier cargo airport hubs in the world with more than 650 wide-body aircraft landings each week.

The Chinese goods would then be transferred to container ships heading to Washington state ports. That would mean the shipping time for products with a short life span, such as fruit, would be decreased.

Poe said the agreement is nonbinding, which means that the deal might not work out. A feasibility study must first be completed.

Alaskans in the fishing industry, however, should begin looking to Anchorage as an ever more viable way to get seafood to consumers, he said.

"A lot of people tend to look south before they look north. Seattle is a minor blip on the radar screen," he said.

AEDC is a private nonprofit corporation that was founded in 1987 to encourage business growth in the Anchorage area.

• Brittany Retherford can be reached at brittany.retherford@juneauempire.com.



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