State loans $2.5 million more to seafood plant

Anchorage facility continues search for private investor

Posted: Sunday, July 23, 2000

ANCHORAGE - The state has loaned a massive new seafood plant $2.5 million to keep it going while the company scrambles to find new investors.

Alaska Seafood International has asked the state for an additional $15 million, but ``we are reluctant to do so unless certain requirements are met,'' a state official wrote this week in reply to an inquiry by state Sen. Kim Elton, a Juneau Democrat.

The state already has spent $50 million to build the Alaska Seafood International factory. The Alaska Industrial Development and Export Authority, the state agency that handled the plant's financing, calls it ``the largest and most technologically advanced seafood plant in the nation.'' AIDEA owns the building that houses the plant.

The project was envisioned as a bold attempt to do advanced seafood processing in the state.

But the plant, which began making products last fall, suffered a financial jolt this spring when its major private investor, the Central Investment Holding Co. of Taiwan, withdrew most of its commitment to the project.

For now, Alaska Seafood's president, John Brady, said the focus is on landing a major new investor.

``We're very close,'' he said last week. He declined to name the prospect.

Brady called the state's $2.5 million loan a ``bridge loan to get us through until we close with an investor.''

Sen. Elton, a former executive director of the Alaska Seafood Marketing Institute, raised pointed questions about the plant in a recent letter to AIDEA.

He asked whether AIDEA had given the project any more money, how it would be used, what plant managers were paid, whether some had left, and what the factory was buying and selling.

``These are just basic questions that I think need to be asked and answered, not so that we can say `I told you so,' but so we can make some good decisions on what we do now,'' Elton said in a recent interview.

Elton said many in the established seafood processing industry have long questioned the economic viability of moving fish, breading and packing materials to Anchorage and then back out again.

Keith Laufer, AIDEA's acting executive director, replied to Elton that he couldn't answer many of the questions due to state confidentiality laws. However, he explained the $2.5 million loan and said AIDEA had talked to several companies interested in investing in or taking over the plant.

Two companies ``appear interested,'' but might want to wait to see whether Alaska Seafood survives before acting, Laufer wrote.

For the state to invest any more in the plant, Alaska Seafood first must find ``a substantial new investor with seafood experience'' and update its business plan, Laufer wrote.

Brady, Alaska Seafood's president, confirmed the company's vice presidents of manufacturing, human resources, and research and development have left recently, as well as a production line foreman. But such changes are normal in a start-up company, he said.

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