CDQ groups grow into economic force worth $150 million

AP Photo/Peter Haley/The News Tribune
Community Development Quota groups in Western Alaska have become powerful regional economic development engines, investing millions of dollars in docks, ports, seafood plants and other infrastructure, as well as fisheries businesses.

They may also be the fastest-growing business enterprises in the state, although the parent corporations are nonprofits. They started with nothing in 1992, but with a valuable "community share" allocation of valuable pollock and cod harvests of the Bering Sea.

By 1999 the groups had combined net assets of $103.7 million, according to data compiled by the North Pacific Fishery Management Council. Between 1999 and 2000, net assets increased 24 percent, to $128.8 million, the council data showed.

Larry Cotter, a fisheries consultant who helps manage one of the CDQ groups, predicted that combined assets of the groups could exceed $150 million by the end of this year.

Most of growth is in the businesses in which the CDQ groups are investing. All six now own part of the fishing companies with which they share their allocations of groundfish -- this year approximately 300 to 400 million pounds of pollock, cod, sablefish, halibut and crab -- from the rich Bering Sea fisheries.

"What these groups are accomplishing is the Alaskanization of the offshore fishing industry," said Trevor McCabe, executive director of the At-Sea Processors, the association of large catcher-processor vessel operators.

Large sectors of Alaska’s fishing industry have traditionally been owned by nonresidents, but the CDQ groups are changing those dynamics by buying into the catcher-processor fleet in a major way, McCabe said.

All of the six CDQ groups have now invested in vessels with their fishery partners. Examples include Norton Sound Economic Development Corp., which now owns 50 percent of Seattle-based Glacier Fish Co., and Coastal Villages Region Fund’s ownership of 20 percent of American Seafoods, a major offshore vessel operator.

Central Bering Sea Fishermen’s Association owns an additional 3.2 percent of American Seafoods.

The groups have become particularly important as a new source of investment in regional infrastructure. In Nome, NSEDC contributed $3 million toward a required $5 million local match for a planned $36 million major port expansion. The project has now been approved by Congress and should be under construction next year.

NSEDC earlier contributed over half a million dollars to improvements of Nome’s existing small boat harbor and is now building a $550,000 new seafood processing plant in Nome. The plant, operated by Norton Sound Seafood Products, a division of NSEDC, will include a retail seafood outlet, according to Eugene Asicksik, NSEDC’s president.

The new port will allow fishing to continue later in the year, as late as Nov. 15, Asicksik said.

Small processing plants have also been built in Unalakleet and Savoonga. The corporation is also fostering regional fisheries development and helping local fishermen, which is bringing new income into the area.

A small halibut fishery has developed in Norton Sound and the northern Bering Sea following test fisheries promoted by NSEDC. About 50 local fishermen, from Savoonga, on Saint Lawrence Island, to Nome, Golovin and Elim on Norton Sound, now fish the quota of halibut allocated to the corporation, Asicksik said.

Halibut fishing now brings more than $150,000 in seasonal income to Savoonga, a remote village where people formerly depended mostly on welfare and ivory sales for cash.

Through loan programs, the corporation is helping fishermen upgrade their boats and buy gear. Halibut fishermen may also be able to fish an allocation of red king crab that NSEDC receives, for example.

NSEDC has also been the only buyer of salmon in the region for six years now. In 1992, the corporation was able to pay fishermen the highest price for pink salmon in the state that year because of the efficiency of the high-volume processing ship Glacier Fish Co. brought to Norton Sound, Asicksik said.

For the past two years NSEDC has purchased chum salmon from Kotzebue fishermen who had no other outlet. Half a million pounds of salmon were flown this year from Kotzebue to NSEDC’s processing plant in Unalakleet, where fillets were prepared for ultimate sale in Seattle.

A similar success story is unfolding in the Aleutian Islands, where Aleutian Pribilof Island Development Corp. has developed Atka Pride Seafoods, a processing plant, in partnership with the community of Atka.

The plant had several years of start-up losses but is now in its third consecutive year of profitability, according to Larry Cotter, executive director for APIDC.

What’s important is that the plant and related investments in docks and other facilities has fostered the local small-boat fishery, creating jobs in the community, Cotter said.

12/23/2001 - 8:00pm