Sealaska looking to sell money-losing plastics limestone business
JUNEAU -- Sealaska Corp. is planning to sell its unprofitable plastics business. It also wants to find a partner for its limestone operation -- or sell it, too.
The Southeast regional Native corporation also expects to post a year-end loss for the first time in 17 years. Juneau-based Sealaska is one of the more successful of the 13 regional Native corporations formed when the Alaska Native Claims Settlement Act was signed in 1971.
The corporation is speaking with companies interested in buying TriQuest Precision Plastics, a Vancouver, Wash.-based injection-molding manufacturer, said Ross Soboleff, Sealaska spokesman. He didn’t say how the company did last year, but Sealaska’s newsletter said the plastics company "experienced heavy losses in 2000."
A review of TriQuest’s industry standing last year indicated the company needed to grow substantially or find niche markets. Without one of those, the review said TriQuest wasn’t positioned for success, Soboleff said. Sealaska doesn’t want to invest more money into TriQuest, he said, so it is looking for buyers.
"We would like to recoup the investment," Soboleff said.
Sealaska also would like to get a partner or divest SeaCal, a company that owns the Calder limestone mine on Prince of Wales Island. The land the mine sits on was acquired with the purchase of another company, Soboleff said. It used to operate as a marble quarry around the turn of the century, he said.
The area sat idle until Sealaska began construction of the mine in 1997. It began operating the next year, but the investment didn’t pan out. The mine cost more than expected to set up and one of its main markets weakened and hasn’t fully recovered.
"The Asian markets are still pretty soft," Soboleff said.
Limestone is used in a wide array of products from toothpaste and paper to rubber, glass and roofing products. But the market is proving hard to crack. Normally, once a buyer has a limestone supplier, they tend to form long-term relationships, Soboleff said.
The mine will continue to operate in 2001 while an investor is sought.
The sales are part of Sealaska’s plan to move toward a corporate strategy of investing rather than owning and running companies.
Sealaska’s third subsidiary, Sealaska Timber Corp., will not be sold and is the one bright spot for the company this past year.
"That did well -- very well," said Soboleff, who did not provide further details.
But the performance of the timber company wasn’t enough to counter balance Sealaska’s poor performance by its two other subsidiaries and investment portfolio.
The investment portfolio roughly mirrored Wall Street, Soboleff said. The stock market did poorly in 2000 after years of growth. The Dow Jones Industrials lost more than 6 percent while the broader market S&P 500 index lost 10.1 percent in 2000.
Despite the expected loss, Sealaska paid out about $8 million in dividends to its 16,500 shareholders last year, the last one $208 -- less than a month before Christmas for the typical shareholder with 100 shares. In 1999, Sealaska paid out more than $9 million in dividends and reported net income of $10 million on $176 million in revenues.
Soboleff said the corporation won’t know for months exactly how poorly Sealaska fared last year. Sealaska’s annual report won’t be completed until April, he said.