Businesswoman profits from hot corn therapy

Anchorage businesswoman Renee Kimmel bursts with enthusiasm when she talks about her "Hot Rocks" business and the medical and therapeutic benefits of the specially shaped bags filled with corn that she produces.They soothe soreness and relieve pain. Physicians, chiropractors and therapists, prominent among a growing group of loyal customers, seem to agree."Where’s your pain?" Kimmel asks a visitor to her South Anchorage shop. Everyone has some pain somewhere, she says, in the lower back, a knee, a neck, tummy cramps.She microwaves one of her belted bags of corn and drapes it over a visitor’s shoulders. It brings instant relief, along with the soothing scent of warm corn.Kimmel describes herself as a combination inventor and entrepreneur. She started her small business seven years ago after she closed a successful food service business.Hot Rocks now has a small following of steady customers. She wishes she could grow faster, but an undercapitalized small business faces limits, she admits.Still, Working Women Magazine invited Kimmel to be one of 60 women-owned businesses to exhibit at a national conference hosted by the magazine in May. Hot Rocks is the first Alaska business to be featured.Kimmel has found a niche market, exploiting the unique therapeutic qualities of corn, which retains heat. After two or three minutes in a microwave, the corn-padded belt remains warm for an hour and a half. She has now developed 25 separate products from her basic concept, all of them protected by patents."It’s the only line of products I can think of that are gift items as well as medical supplies," she said.She is about to market a new product, a combination heat and cold pack than contains bags of corn, for heat transfer to relax muscles, and cold packs, for cooling injuries. She invented the product with a local physician. Patents are pending, Kimmel said.The firm has four employees and has just hired a marketing manager. Three-quarters of Hot Rocks’ business is local and a good part of the out-of-state business comes from the New York area for some reason she can’t fathom. One Greenwich Village physician has been a customer for years, Kimmel said.She does sewing and manufacturing and maintains a small retail store in a small strip mall off Old Seward Highway in South Anchorage. But much of her local marketing is through the weekly Saturday Markets during summer and a year-round kiosk at Dimond Mall."The Saturday Markets generate year-round repeat business because when people buy the product at the market they want more later in the year," she said.Out-of-state sales come through Internet marketing and inquiries from physicians who have seen articles about the product in medical publications, Kimmel said.Meanwhile, based on her experience in business, Kimmel wants to spread a "can-do" message to other women in Alaska."Too many women from all walks of life say ’No, I can’t.’ I want to show them that they should say, ’Yes, I can!’ " she said."I’ve met countless people who say, ’I’ve got a great idea,’ but then give you all the reasons why they think they can’t do it. I want to make them realize they can do it," Kimmel said.She said the recent Working Women Magazine conference drove home the point that "no idea is too small or too seemingly insignificant, that with the proper structure and marketing diligence, can’t work."For herself, the help offered through the University of Alaska’s Small Business Center has been substantial."They helped me focus by developing a business plan. I’m an inventor and an entrepreneur, and people like me develop good products but don’t have the follow-through to market them successfully," Kimmel said.Kimmel’s business is still small, but she hopes to expand and eventually sell it to a major medical supply company."I have a company like Johnson and Johnson in mind," she said.A key opportunity to showcase her products, and the new combination heat-and-cold pack, will come in August when she makes a presentation to a national chiropractic conference in Orlando, Fla.If the right venture capitalist is there, "Hot Rocks could go to a billion-dollar company," she said.

Some snow crab disaster money to put St. Paul into cyberspace

Federal crab disaster funds will help a Pribilof Island diversify its economy into cyberspace.St. Paul’s village Native corporation is putting some of the Bering Sea snow crab disaster relief money to work online. Tanadgusix, or TDX, has received $318,000 to develop a Web site it’s calling BeringSea.com.The funds were granted by Congress after the 1999 crash of Bering Sea snow crab.TDX computer consultant Evan Cutler foresees the venture as "the Yahoo of the Bering Sea." He said the grant will provide work for three youths and two adults for one year. They will post local material on the site, including fish prices, fisheries regulations and digital images of local art. Local fishermen could sell halibut online.BeringSea.com is TDX’s latest move into information technology.TDX chief executive officer Ron Philemonoff said the corporation owns the local cable television company, where 70 homes on the island have been connected to high speed cable modem Internet service since July.Philemonoff sees the Internet as a way for rural Alaskans to work at good jobs while remaining in their villages. "With broadband connections, you might as well be next door to the customer on the other end, whether you’re in Nome, St. Paul or Brazil," he said.Now that TDX has secured the crab disaster funding, Philemonoff hopes to bring the Internet service to other Southwest Alaska communities using some of the $30 million in federal disaster funds made available after restrictions were placed on the commercial fishing industry to protect the endangered Steller sea lion.St. Paul received the biggest chunk of the federal snow crab disaster money, $2,811,188; St. George $1,874,125; Aleutians East Borough, $1,184,791; and Unalaska, $592,396. The communities must provide a 25 percent match.Various projects are receiving funding, according to Jo Cooper, grants manager for the state Division of Community and Business Development in Fairbanks, which is administering the program.In St. George, disaster funds are going to various entities. The city will use the money for a landfill survey, a harbor hydrographic study and propane tank farm upgrade. Tanaq village corporation is planning hotel renovations and a birder-based tourism marketing program, and the traditional council will use its funds for clinic repairs.The Aleutians East Borough will install a wave barrier for a small boat harbor in Akutan; harbor equipment in King Cove; and engineering work on a proposed road from King Cove to Cold Bay.The only other project currently funded in St. Paul is $300,000 for tourism development at the Government House community center. Unalaska hadn’t submitted any proposals as of press time.Nearly all the money goes to communities, although individual crab fishermen can receive interest-free $1,000 loans from a pool of about $200,000, according to Pat Poland, director of the state community and business development division.The Alaska Marketing Association unsuccessfully applied for some disaster relief for crab fishermen."It was never intended to go to fishermen. It was to make up for some lost tax revenues that communities would have been able to obtain if it was a normal fishing year," said Jake Jacobsen of the AMA, which negotiates prices for Bering Sea crabbers.Jacobsen had an idea to develop a pot fishery for Greenland turbot, using disaster funds."It just seems rather funny to me, but also business as usual, that they’d have an opie disaster relief fund, and none of the money would be eligible to the guys that actually go out and catch the fish," said AMA president Gary Stewart.Jim Paulin is a free-lance writer living in Unalaska. He can be reached at ([email protected]).

Phillips drops Beaufort project

FAIRBANKS -- Phillips Alaska Inc. is dropping its plans to drill an exploratory well in the Beaufort Sea.Conditions set by the Alaska Department of Environmental Conservation for a state permit forced the company to back off on the McCovey Prospect, Phillips said in a letter to the state."In our opinion, the proposed stipulations go far beyond any interpretation to date of what could be viewed as ’reasonable terms and conditions’ that ADEC may attach to plans it approves (under statute)," the company complained in the letter.But DEC spill prevention manager Susan Harvey said the state requirements were nothing unusual and that Phillips executives told her the project was snagged by its own questionable economics.Phillips spokeswoman Dawn Patience would not elaborate on the decision to halt the project."We’ve spent a lot of time and effort on the McCovey Prospect," Patience said. "It seems as though we were not really moving forward."The company intends to re-evaluate the project later, she said.The project drew strong opposition from the North Slope Borough government and was the subject of lawsuits filed by environmentalists and a group of area Inupiat.The North Slope Borough said Phillips underestimated the ice forces of the area and that existing spill response methods would be ineffective.Offshore oil development in the Arctic is a subject of intense controversy. Many North Slope residents think a spill could threaten the whales, fish and seals they use for food.The McCovey Prospect is a dozen miles off the coast. Phillips, with partners Chevron and Alberta Energy, planned to drill an exploratory well from an ice island connected to Prudhoe Bay by an ice road.The plan got federal approval, but also required a state review.Phillips wanted to do the work this past winter, but postponed it a year due to the delay in getting a state permit.Then, on April 30, Phillips withdrew its permit request entirely.DEC and other state agencies had several concerns about the McCovey exploration plan, which Harvey said was unique.DEC’s worries included the stability of the proposed ice island and the type of drilling rig to be used. The agency wanted to ensure there was adequate ice monitoring and a spill prevention and response plan, she said."We don’t think these are unusual or onerous requirements," Harvey said. "Other operators are working in that context."But Ken Boyd, former director of the state’s oil and gas division, thinks Phillips was blocked by a DEC mandate that drilling be shut down by April 1."If everything’s the same as it was before, then why was the project stopped?" he said. "This was a big project." Companies were on the ice into May on earlier projects, he said.Boyd, a geologist, is now a consultant for a group lobbying to open the Arctic National Wildlife Refuge to oil development.DEC’s Harvey said the agency was following regulations dating from the early 1980s, with no recent changes. In order to operate later in the year, the company would have to demonstrate it could clean up a spill in broken ice, she said.

Federal council to suggest changes to Community Development Quota program

KODIAK -- It’s time for federal managers to do a thorough review of Alaska’s Community Development Quota program.That was the decision made June 7 by the North Pacific Fishery Management Council after lengthy debate at its meeting in Kodiak.The CDQ program is the only one of its kind in the nation that allocates a portion of a resource to a specific region in order to provide long-term economic development. The program, which has been in place since 1994, provides royalties from a percentage of all the fish and shellfish harvests in the Bering Sea to more than 55 Western Alaska communities, which are divided into six regional groups.In all, CDQ fish royalties each year pump nearly $60 million into some of the most remote regions of the state. The money is earmarked primarily for fishing related projects within the communities. Many have used their quota shares to build fish processing plants, docks and other infrastructure, and to provide training for jobs within the fishing industry. Other groups have purchased ownership shares in harvesting vessels and other fishing businesses.The state of Alaska reviewed the CDQ program two years ago. However, the council has not reviewed the program since its launch eight years ago."It’s time for a reality check," said council member Robin Samuelson, who is also a member of the Bristol Bay Economic Development Corp., a CDQ group.The CDQ Policy Committee provided a report outlining recommended changes to the program. Among them, the committee recommended establishing a fixed allocation cycle of three years, instead of the current two years, addressing evaluation criteria for the CDQ allocation process and modifying the appeals process.Much of the council debate centered on allowable investments by CDQ groups, which now are restricted to fisheries-related projects. The Yukon Delta group, for example, is concerned about not having any fishery-related projects to invest in during some years, due to stressed salmon fisheries in that region."Some feel there should be no limit, and they can do what they want with the CDQ money, while others feel all investments should be fishery related, except for things like scholarships, or small donations to civic organizations within their communities," said committee chairman Rick Lauber.The CDQ Policy Committee recommended that federal regulations be "relaxed" to allow CDQ groups to invest up to 20 percent, or a maximum of $50,000 of their royalties, in nonfisheries projects.At the heart of the CDQ program recommendations is clarification of government oversight. The state of Alaska provides "oversight and compliance" for the CDQ program, and it is bankrolled by the federal government via the fishing royalties."Does the government just have oversight over the decisions made by the CDQ groups (on how to spend their money), or does that oversight extend to the businesses and subsidiaries owned (or invested in) by the groups?" asked Sally Bibb, CDQ program coordinator for the National Marine Fisheries Service.Council chairman Dave Benton said he felt it was important for a review to go forward. "The program has grown and changed and matured. There is a whole set of new dynamics. I am proud of the CDQ program and this council will have to be the body to put new procedures in order."The council voted 10-1 to initiate an analysis of the proposed issues and alternatives.Bibb said it would be a year or more before final changes would be made.

Fishermen face market challenges as salmon season kicks off

Salmon fishermen around the state are gearing up for the summer season, and although there will be differences between major fisheries in Alaska, overall the 2001 harvest is expected to be similar to the 2000 harvest.Market conditions, and prices, aren’t likely to be much different either, according to Chris McDowell, an analyst with McDowell Group, the Juneau-based economics firm.An important trend in sales, however, is that more salmon is going into cans these days, with less being frozen, McDowell said.It’s a long-term trend, caused indirectly by farmed salmon eating into a key market for frozen salmon in Japan.Farmed coho salmon from Chile compete head-on with Alaska sockeye salmon in Japan and are a big reason why Alaska is selling less salmon to Japan, and why prices there are lower, McDowell said. With sales of frozen salmon down, processors put more of it into cans.Alaska canned salmon production has increased by 60 percent in the past 15 years, McDowell said. From 1985 through 1989, canned salmon production averaged 3 million cases per year. From 1990 through 1994, the average increased to 3.8 million cases per day. From 1995 through 1999, the Alaska industry produced an average of 4.8 million cases per year."In 1999, sales of canned salmon brought in more money than frozen salmon," McDowell said.Sales of new salmon products like canned "skinless-boneless," in which meat from pink and chum salmon are canned after the skin and bones have been removed, are steadily gaining, McDowell said, but are still a small part of the market.What’s being canned more and frozen less is higher-value sockeye salmon from places like Bristol Bay. That’s because sales of sockeye salmon to Japan are down and Japanese buyers usually prefer frozen salmon, McDowell said.Many of those Bristol Bay sockeyes are still being exported, McDowell said. Once canned, many are sold in the United Kingdom, traditionally Alaska’s strongest market for canned salmon, or to Canada, where some are re-exported to the United Kingdom, he said."We exported over a million cases of canned sockeye last year," McDowell said.The trend toward canned salmon is good in one respect: Canned product is sold in markets less vulnerable, at least so far, to competition from farmed salmon.However, Barbara Belknap, executive director of the Alaska Seafood Marketing Institute, a state agency that works with industry funding to promote seafood, said she saw canned Chilean farmed coho salmon while on a recent trade mission to Europe.Canned Chilean salmon is now selling big in Australia, although it has yet to reach Europe, which is a major market for canned Alaska sockeye salmon, Belknap said.Seventy percent of Alaska’s salmon harvest last year was pink salmon, however, and 80 percent of that is canned and sold mostly in domestic markets. Sales volumes, and prices, are directly influenced by harvest levels, which swing wildly from year to year in places like Southeast Alaska.Canned pink salmon markets are stable, if not growing much, but McDowell thinks these markets are somewhat insulated from competition from farmed salmon, unless some technological breakthrough develops.That’s because Alaska’s pink and chum salmon are so inexpensive, particularly in a year with a big harvest, that salmon farmers find it difficult to compete."We don’t have to feed these fish. We can sell pink salmon into the market for about 50 cents a fish. It’s tough for salmon farmers to compete with that in canned salmon markets," McDowell said.Last year 1.7 million cases of canned pink salmon were sold, up from 1.14 million cases in 2000 and somewhat above the 1.4 million cases sold in 1998, McDowell said.All through the 1990s pink salmon sales have ranged in a band of 10 percent, up and down, he said. In 1991, 1.75 million cases were sold."Alaska’s salmon harvest has been large and stable over the last 10 years, but the species composition of the harvest changed substantially in the 1990s," McDowell said.Between 1990 and 1994 higher value species like sockeye, coho and king salmon made up 49 percent of the harvest, with 41 percent of it sockeye. Lower-value fish like pink and chum salmon made up the other half of the harvest, or 51 percent.Between 1995 and 1999, however, sockeye harvests declined, and pink salmon catches boomed. The harvest of lower-value pink and chum salmon increased to two-thirds of the harvest while the higher value fish decreased to a third.That’s mainly due to pink salmon harvests being at or near record levels throughout most of the 1990s, because ocean conditions have been favorable to wild stocks and Alaska’s salmon hatcheries have been prolific in their production of pink and chum salmon.Eighty-three percent of pink salmon is canned, which explains the growth in the canned salmon pack, McDowell said.But even though sockeye salmon made up only 29 percent of the catch over the last five years, it still accounted for two-thirds of the value of the state’s salmon fishery, he said.If Alaska is producing much more lower-value salmon, with most of that going into cans, the challenge is selling it, according to ASMI’s Belknap.Canned salmon is considered a mature industry. Sales are steady, but the market demographics haven’t changed a lot in recent years. Americans are eating more fish, but tuna producers have captured much of that growth, she said.Some Alaska processors are experimenting with new product forms like salmon-in-a-pouch. While these are popular, only tiny amounts are being produced.The Alaska salmon industry may be approaching a key decision point if it wants to expand market share, Belknap said.Processors could decide to make basic improvements in cans, making them easier to handle and the contents more attractive. Alternately the companies could invest in a major shift to new product packaging, like salmon-in-a-pouch.Tuna producers are now moving toward using pouches, Belknap said, and salmon producers may be able to ride with this trend. Alaska salmon companies can take advantage of the marketing muscle of the huge tuna industry, she said.

Knowles seeks Canada's gas line help

Gov. Tony Knowles continued his efforts to build links with Canada on natural gas in meetings in Ottawa May 31 with Canadian Prime Minister Jean Chretien and government ministers who are part of a Cabinet-level gas working group.Bob King, spokesman for Knowles, said the meeting with Chretien went well.Knowles also spoke to the Canadian National Press Club, proposing a new "partnership of prosperity" between the two countries in energy development.The governor said two gas pipelines should be built, one from Alaska along the Alaska Highway and one from Canada’s Mackenzie River delta."We believe the demand for natural gas is so strong ... that two pipelines can be supported," Knowles said at the press club."Yet, only with a sense of urgency and a spirit of cooperation can we take advantage of the narrow window available for the development of arctic gas," he added.Knowles warned that competing foreign sources of energy are under development, especially coal, nuclear power and liquefied natural gas. Cooperation between Alaska and Canada is necessary to ensure that arctic gas in both nations is developed in a timely way, the governor said.Knowles said an Alaska project along the Alaska Highway is ready for development now. Sixty percent of the 1,800-mile pipeline is through Canada, and its construction would bring tremendous benefits to both countries.Responding to concerns in Canada over opposition in Alaska to an "over-the-top" northern pipeline route, Knowles told the press club that, "I’m sure you can appreciate the frustration felt in my state over this route. It would take gas, which belongs to all Alaskans, immediately out of Alaska with no economic benefit to Alaskans nor energy for Alaska communities," he said.Knowles signed a bill May 19 passed almost unanimously by the Alaska Legislature this spring that prohibits a right of way across state lands for a northern "over-the-top" pipeline.But the governor added that "a pipeline to pick up Mackenzie Delta gas reserves is justified by continental energy demand and should also be built."In the end, the marketplace will determine the feasibility of any gas project, he said. That’s why the state of Alaska is working closely with the private sector and Alaska’s oil and gas producers, which are in the midst of a $75 million gas development analysis, Knowles said."They have committed to submitting a gas pipeline project application to the state by year’s end, and we are working hard to hold them to that," he said.

This Week in Alaska Business History June 18, 2001

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesJune 18, 1981Market Place of Alaska to close doors June 27By Bill WhiteTimes WriterIt really is a going out of business sale.Mike O’ Brien, one of the three owners of The Market Place of Alaska, said shoppers have just eight days to rummage through the remaining toys, jewelry and giftware bearing close-out prices.At abruptly 6 p.m. on Saturday, June 27, the owners of the store at 100 W. Fireweed Lane will lock the doors for the last time.Last February they filed for bankruptcy after a year-and-a-half effort to bring discount prices to the Anchorage retail market.Retailing "is a competitive business and it takes money to operate. Capital shortages was the main problem," said O’Brien, who joined his friend Howard Smith and Dennis McCoy in the venture 15 months ago after a 16-year career in the grocery business.Smith and McCoy opened the business in September 1979 after working in the construction industry.... The building on Fireweed housed the old Anchorage Sports Arena in the late 1960s and early 1970s.Anchorage TimesJune 21, 1981Delta farmers double crops without guaranteed marketThe Associated PressDELTA JUNCTION -- Farmers in the Delta area have planted almost twice as much barley as last year’s crop, although the state still has grain left over and it won’t guarantee the farmers a market this year.More than 13,000 acres of barley have been planted, along with 2,000 acres each of oats and grass seed and 200 acres of wheat, according to Bob Pollock, executive director of Alaska Agricultural Action Council.The figures represent all farmers in the Delta area, not just the state-backed agricultural project there, he said."That’s almost double the barley we had last year, and a lot more of the oats," Pollock said.10 years ago this weekAlaska Journal of CommerceJune 17, 1991Diminishing returns at PrudhoeBy Ray TysonFor the Journal of CommerceThe law of diminishing returns on company investments in the Prudhoe Bay oil field likely will occur sometimes in the mid-1990s as the giant reservoir moves into ever-increasing decline."I don’t want to give the impression that if we keep advancing technology the garden is all rosy at the end of the day," said Mike Davidson, BP Exploration’s manager of Prudhoe Bay resource development.Davidson said "diminishing returns" may set in with the GHX-2 gas-handling project, which is expected to cost from $1.3 billion to $1.5 billion, up from initial projections of $1.1 billion.Alaska Journal of CommerceJune 17, 1991International service shrivelsAlaska Journal of CommerceThe easiest way to describe the future of international air passenger service at Anchorage International Airport is to resort to a cheap pun: It’s up in the air.The trend for those who like a lot of options for travel to the Far East and Europe is depressing. As things stand now, by the end of the year only one airline -- British Airways -- will offer passenger service to Japan or Europe from Anchorage.Already gone are Lufthansa, SAS, KLM and Sabena. Swissair will soon join them. Japan Airlines and Air France will depart this fall.Lufthansa, the German airline, quit landing in Alaska because it flies long-range Boeing 747-400 aircraft between Europe and the Orient. Sabena, the Belgian carrier, has begun flying 747-300s through newly opened Siberian airspace, and has likewise opted out of Alaska.-- Compiled by Ed Bennett.

Around the World June 18, 2001

STATEConservation groups want logging, road bans back JUNEAU -- Environmental groups seeking wilderness protections for the Tongass National Forest have asked a federal judge to reinstate a ban on logging and road-building, pending appeal to the 9th U.S. Circuit Court of Appeals.U.S. District Judge James Singleton on May 23 suspended a logging ban and made plans for an evidentiary hearing.The Sitka Conversation Society, the Sierra Club, the Alaska Center for the Environment and the Wilderness Society also have asked Singleton to clarify that the injunction applies only to roadless areas eligible for wilderness consideration.Mark Rorick, chairman of the Juneau group of the Sierra Club, said the groups have asked the injunction to be reinstated because logging has been resumed in roadless areas.Fairbanks borough tries to outlaw outhousesFAIRBANKS -- The Fairbanks North Star Borough is trying to outlaw outhouses in neighborhoods that have sewer and water hookups.The ordinance would require properties that have a sewer line to either hook into it or get a septic system. Established outhouses are not affected by the proposal.The issue of outhouses was brought to a head by a situation in a subdivision where some rental properties owned by a plumber have modern facilities while others only have outhouses. Neighbors are concerned about sewage from the outhouses seeping into the water table.NATIONAT&T Wireless to spin off on July 9, parent saysNEW YORK -- AT&T Corp. has set July 9 as the date to spin off its wireless business as an independent company, the first stage in management’s plan to dismantle the ailing telephone and cable TV empire.All AT&T investors will be receiving about a third of a share in the new company, AT&T Wireless, as a special dividend on every regular AT&T share they hold. Any fractional wireless shares will be paid out in cash.On the same day, the so-called "tracking’’ shares that represent AT&T’s wireless business will be converted into a common stock on a one-to-one basis.AT&T Wireless, with 15.7 million subscribers, is the nation’s third largest mobile phone company.Exxon Mobil chairman doubts refineries will be builtDALLAS -- The chairman and chief executive of Exxon Mobil Corp. says he can’t imagine any company building U.S. refineries, and that gasoline-making capacity will be further strained in the next few years by clean-fuel rules.Lee Raymond said a big hurdle in the short run is that U.S. refiners are gearing up to spend $8 billion over the next few years to meet government standards for reducing sulfur content in gasoline and diesel fuel.The result, he said, would be refineries closing temporarily for retooling and leaving some independent gasoline marketers unable to find supplies.Raymond said companies are reluctant to build new refineries because profit margins are too small -- they could invest in other things "and you wouldn’t have the aggravation of everybody accusing you of always cheating’’ by manipulating gasoline prices.WORLDBusinesses must keep workers in the loopLUXEMBOURG -- European Union ministers agreed June 11 on rules that will oblige businesses across the 15-nation bloc to supply more information to their employees about developments within the company including planned layoffs.The agreement came after four years of negotiations during which Britain had led a minority of EU nations that had blocked the new rules fearing they would harm the competitiveness of businesses.The British government said it dropped its objections after the others agreed to phase in the new rules more gradually for smaller companies.Japanese economy still sputteringTOKYO -- Japan’s economy contracted by 0.2 percent in the fourth quarter of its latest fiscal year, dragged down by slumping exports and business investment. The decline meant the economy grew more slowly for the year than the government’s target.The Cabinet Office said June 11 that Japan’s gross domestic product, the value of all goods and services produced in the nation, grew 0.9 percent for the fiscal year ending in March. That fell short of the government target of 1.2 percent growth.The data underline the depth of the problems plaguing Japan, which has battled a economic slowdown for more than a decade. Japan’s economy grew 0.7 percent during the October-December period.The situation could worsen in the months ahead if Prime Minister Junichiro Koizumi carries out promised economic reforms.Compiled from business wire services.

WOMEN$fund offers savvy to men and women

Some of Alaska’s small, women-owned businesses have started out with more than just an idea. Hundreds of graduates of WOMEN$fund, a program of the YWCA of Anchorage, opened their business doors or built profits armed with entrepreneurial training and business finance savvy gleaned from WOMEN$fund courses. Despite its name, WOMEN$fund offers its business training classes to everyone, regardless of gender. Courses range from developing a business plan or basic business accounting to schooling in computer programs like QuickBooks, Microsoft Word and Excel. WOMEN$fund also provides professional business training in specific areas like operating assisted-living homes, child day-care centers and food and beverage establishments. "These courses have brought a type of client who is very focused and wants to gain all the expertise possible in a one-stop setting," said Jennifer Abbott, WOMEN$fund director. WOMEN$fund started in 1994 as a micro-loan program for women seeking to start or grow a small business. In 1996 the U.S. Small Business Administration Office of Women’s Business Ownership selected WOMEN$fund as the Women’s Business Center for Alaska. This designation allowed WOMEN$fund to offer its training, networking and technical assistance programs to anyone in the community, Abbott said. Since the mid-1990s about 700 students have attended WOMEN$fund classes, 90 percent of whom are women, Abbott said. The program has helped open more than 150 businesses that include construction companies, therapeutic massage centers, retail businesses, gift stores, caterers, Web designers, artists and assisted-living homes, she noted. Renee Kimmel, owner of Hot Rocks Heating Pads in Anchorage, attended "Starting with Success" on the basics of successful business operation. "A lot of people say, ’I’ve got a great idea,’ and I say, ’Put it in writing,’ " Kimmel said. "I learned you don’t just come up with an idea (for a business) unless you have a business plan," she said. Kimmel touts WOMEN$fund to men and women.

Cruise ship pollution bill sails through special session

JUNEAU -- The Alaska Legislature has passed a landmark bill establishing state oversight of cruise ship pollution. The House of Representatives passed the bill 29-5 about 10:35 a.m. June 9, and the Senate followed with a 13-6 vote about seven minutes later, sending it to Gov. Tony Knowles for his signature. The bill, with final touches from a House-Senate conference committee, authorizes the Department of Environmental Conservation to negotiate with the cruise industry on regulations for wastewater discharges, air emissions and solid-waste handling, thereby reinforcing and surpassing federal environmental protections. A $1 per passenger fee will be assessed to pay for the state’s program. Cruise companies will register with the state and agree to comply with the regulations, as well as provide a series of reports. While there was sharp debate about whether the bill went far enough or too far -- including a close vote in the Senate defeating a $10 passenger head tax -- the legislation is groundbreaking. It contains the first regulation on the content of graywater discharges ever passed by any government. "Bam! We’ve kicked it up a notch, haven’t we?" a smiling Knowles said soon after the Legislature adjourned the special session he had called. He said that DEC Commissioner Michele Brown, "a true hero," will start preparing for negotiating rules with the foreign-based cruise companies. "Whatever flag they fly, they must honor, in our waters, our values and our environment," the governor said. Brown said that the bill gives the department the tools it needs to inspect ships, monitor emissions, take water samples and enforce pollution limits. But despite the historic occasion, there was discord along the way. Six Senate Democrats, including Juneau’s Kim Elton, voted against the bill because the final version that came back from a House-Senate conference committee wasn’t as explicit as the Senate-passed bill in guaranteeing testing for all kinds of pollutants in wastewater. "It is a good day, that we passed cruise ship legislation," Senate Minority Leader Johnny Ellis of Anchorage said later, without enthusiasm. "It could have been a better day." House Democrats unanimously supported the bill but also expressed misgivings. "I think this is sort of a wimpy response to the problem," said House Minority Leader Ethan Berkowitz of Anchorage. The bill’s co-author, House Finance Co-Chairman Eldon Mulder, bristled at that, emphasizing that Alaska now has gone where no other state has gone. "This is a huge step; it really is," said Mulder, an Anchorage Republican. Meanwhile, majority Republicans said the Democratic governor’s three-day special session was crassly political because nothing will be achieved before next year that couldn’t have been anyway. The North West CruiseShip Association had agreed to abide by the provisions of the bill, and receipt authority was given to DEC in the operating budget to collect $700,000 in industry fees. The regulations that DEC will negotiate won’t be done before this cruise season is over. "But the fact is, the momentum was there," acknowledged Senate President Rick Halford, a Chugiak Republican. Three instances of wastewater discharges in violation of federal law, all since the May 8 adjournment of the regular session, helped sustain the drive for passing the bill. Brown said that accepting a civil contract with the industry in lieu of law, even if temporarily, would set a bad precedent. And the state wouldn’t have the same enforcement ability to deal with criminal violations, she said. Putting the bill off until next year also would have slowed the rulemaking process. However grudgingly, Republicans moved the bill rapidly through their committee structure and to the floor. Along the way, they made changes delaying the new wastewater discharge requirements for small cruise ships and state ferries, and shored up the bill to ensure DEC access to all holding tanks. Concern had been raised about whether ballast water was being mixed with sewage, as several ships are holding their waste for discharge outside of Alaska waters rather than risk exceeding the new federal limit on fecal coliform colonies in blackwater, or toilet waste. A final amendment clarified that the state can inspect ballast tanks or other holding tanks if they have been used for storage of sewage or graywater, which comes from showers, sinks, laundries and galleys. But the conference committee ended in a dispute about whether the industry should report to the state any discharges of photo-processing chemicals, medical waste and other toxic materials, which are illegal to dump under federal law. The conference committee voted along party lines against requiring such reports, although industry representatives agreed to a statement by the Legislature that it expects them to notify the state of any such discharges. Mulder was angered by the final push for placing another reporting requirement on the industry. He said federal law ensures adequate reporting, although that was disputed. "Do we want to be duplicative, redundant and otherwise repetitive?" Mulder asked after the conference committee adjourned. "It appeared to me to be picking a fight where there was none." Rep. Beth Kerttula, a Juneau Democrat who has been pushing for cruise ship regulation the past two years, said it was a "right to know" issue for the state. If cruise ships don’t discharge illegally, they merely would file a report saying so, said Kerttula, one of the conference committee members. "As an attorney, as an Alaskan, I want it clear in our law that we know exactly what is coming out of these ships." But Republicans on the conference committee, including Juneau Rep. Bill Hudson, wouldn’t go along. "It’s a shame that here we had the Senate pass a bill that made it clear that all discharges could be tested and all discharge systems could be examined, and the House wouldn’t go for that, presumably at the industry’s behest," said Gershon Cohen of Haines, a clean-water activist. "The result is maybe we closed part of a loophole; maybe we didn’t. Maybe we closed most of a loophole; maybe we didn’t ... It is remarkable and noteworthy that a bill was passed." Kerttula said her father, former House Speaker and Senate President Jay Kerttula, gave her some perspective. While it took 10 years to get an anti-trust law on the books, he reminded her, she was able to achieve a comprehensive cruise ship bill in just two. "I feel very good about what we accomplished," she said. "But this voyage isn’t over yet." Halford, who worked with Kerttula on the issue, said he believes the environmental issues mostly have been resolved. The state can test for whatever pollutants it wants to now that it has access to any facilities used for blackwater and graywater, he said. "Whatever you find in the sample, you have all the other laws to act on." But Halford said there are revenue issues remaining, including making the cruise industry pay the apportioned corporate income tax and a passenger head tax. An amendment for a $10 head tax was defeated by a vote of 10-9 in the Senate. It would have raised about $7 million, which co-sponsor Randy Phillips, an Eagle River Republican, said would be a modest contribution toward the facilities and resources that the cruise industry enjoys in Alaska. Sen. Gene Therriault, a North Pole Republican, countered that the industry does a lot more marketing for the state of Alaska than either the state or the domestic private sector. Sen. Alan Austerman, a Kodiak Republican who represents small coastal communities in Southeast that might be affected by cruise ship pollution, voted against the head tax and against the Senate bill on June 8. He refused to discuss his reasons. The Alaska debate has drawn widespread attention, with a recent editorial in a Honolulu newspaper urging Hawaiian lawmakers to pass a similar bill. Former British Columbia Premier Mike Harcourt was at the Capitol watching the proceedings. And Randy Ray of the U.S. Cruise Ship Association said he was aware of several states or Canadian provinces that are studying the legislation. Ray told lawmakers: "This will set the template for the rest of the planet."  

Women-owned businesses

Jean Conn is a Caddo Indian from Checotah, Okla., raised on her family’s cattle ranch, a former manager of the family-owned gas station and convenience store in Checotah, and now president and owner of her own paving, snowplow, construction and equipment leasing business in Anchorage. She is so satisfied with the company, and confident in its future, that she refused a recent buyout offer. Conn was educated to be a teacher -- she has a bachelor of arts degree in elementary education from Northeastern State University in Tahlequah, Okla. -- and loves working with children. But there was no doubt in her mind that she would eventually be in business for herself. "I grew up in a family that ran businesses, including cattle, gas stations, and a part interest in a local bank," she said. "Being in business for yourself was natural. It was part of life." Growing up in rural Oklahoma also taught her to enjoy working outdoors, to endure long hours, and to be quick in taking charge when things happen. In 1998 her husband, James "Shorty" Conn had a stroke. It left him partially disabled. Jean and Shorty Conn had formed their company in 1994, buying out the assets of Custom Paving, a company in which other family members held interest. Conn had been in charge of the business side, leaving equipment management to her husband. After the stroke -- it happened on their 31st wedding anniversary -- she had to take control of everything. In Alaska Women owned 25.9 percent of nonfarm businesses in Alaska in 1997, the latest data available from the Census Bureau. The percentage is about the same as women-owned businesses on the national level, which was 26 percent in 1997, the Census Bureau said. In Alaska, women owned about 16,000 business firms and employed 16,520 people in 1997, according to the U.S. Small Business Administration. The latest data available on women-owned businesses was published April 4 by the Census Bureau in a report, "1997 Survey of Women-Owned Business Enterprises." On a national level, the census data shows women-owned businesses increasing faster than businesses owned by men. Comparing the 1997 data with 1992, the previous year for which statistics on women-owned businesses were reported, the number of firms owned by women increased 16 percent compared with less than 2 percent for men. Also, the number of women-owned firms with employees increased by 37 percent, or three times as fast, as the number of women-owned firms without employees, which grew 12 percent between 1992 and 1997. However, 84 percent of the women-owned firms had no employees, according to the census data. In contrast, the number of firms with employees owned by men declined by 4 percent between 1992 and 1997, according to the data. Nearly all the firms covered in the census studies in 1997 and 1992 were small businesses. Receipts for women-owned businesses were typically small. Nearly 69 percent had revenues of less than $25,000 in 1997, the Census Bureau said.  

Pearce heading for D.C.

JUNEAU -- Sen. Drue Pearce, R-Anchorage, announced June 9 she is leaving the Senate to take a job in Washington, D.C.Pearce said she’s not free yet to discuss details of the new job. She would only say she’ll be continuing to influence Washington decisions that affect Alaska, but from inside the Beltway.It has been rumored for months that Pearce was being considered for a job in the Bush administration.Pearce announced her departure on the Senate floor at the close of a special legislative session on cruise ship legislation."It has been a true privilege and honor to represent the people of Anchorage these 17 years," Pearce said. "I am proud that Alyce Hanley and I were the first two women elected to represent a district in Alaska and I’m proud that while I have served, women -- including me -- have served in every leadership position in the Legislature."Pearce was Senate president 1995-1996 and 1999-2000, has been co-chairwoman of the Senate Finance Committee and this year is chairwoman of the Senate Rules Committee.Senate President Rick Halford, R-Chugiak, said the procedure for replacing a departing senator is that Republicans in her district will forward a list of names to Gov. Tony Knowles who will appoint the replacement. That appointment must be confirmed by Senate Republicans.Republican Reps. Andrew Halcro and Norm Rokeberg are the two House members who live in Pearce’s Senate district, and both said they are interested in the job.Neither Halford nor Knowles would comment on candidates for the job. Halford did say governors have traditionally tried to appoint a candidate who’s not interested in running again for the seat.

Business Profile: Alaska Business Insurance

Name of the company: Alaska Business InsuranceEstablished: 1983Location: 1400 W. Benson Blvd., Suite 410, AnchorageTelephone: 907-272-1825Web site: www.alaskabusinessinsurance.comMajor focus of services: Alaska Business Insurance provides insurance services, chiefly commercial, but also serving personal lines. The agency has developed a niche business by providing insurance services for the Alaska aviation industry as well as guides and outfitters.History of the company: After working for another insurance agency four Alaskans decided to open their own company, Alaska Business Insurance. The company started with the quartet of owners plus one employee.In the mid-1980s Alaska Business Insurance moved to its current office in Midtown Anchorage. In 1988 Alaska Business Insurance acquired Alaska Frontier Insurance with an office in Eagle River and retained the employees.The agency also operates a downtown Anchorage office for life and health insurance.In 1992, two of those owners -- Wayne Burger and Jim Campbell -- bought out the other two.Today, the insurance agency employs Burger and Campbell plus 16 other Alaskans.Last summer Alaska Business Insurance introduced online insurance applications for some services including personal lines and aviation.Top accomplishment of the company: "We’ve been able to attract and keep competent employees," cited Burger, Alaska Business Insurance secretary/treasurer. "Over the years we’ve had very small turnover. We also have some real long-term clientele. We’re one of the few remaining small independent agencies not part of a nationwide firm or a large firm."Major players: Wayne Burger, secretary/treasurer, and Jim Campbell, president, Alaska Business Insurance.Burger worked in the surety bond business in Seattle between 1975 and 1981 before moving to Alaska. Campbell was transferred to Alaska with the U.S. Air Force and decided to stay in the state after completing military service. He began working in the insurance industry in the mid-1970s.-- Nancy Pounds

Home Depot to begin construction in Fairbanks

FAIRBANKS -- Home Depot officials expect to start construction later this month on a Fairbanks store. The start of work on the 130,500-square-foot store would come a month sooner than previously stated. Spokesman Chuck Sifuentes said the store should open next spring. The Anchorage firm of Koonce, Pfeffer, and Bettis is designing the Fairbanks store, Sifuentes said. A general contractor has been selected, but Sifuentes declined to name the company because contracts have not been signed. The store will be larger than most in the Atlanta-based chain, Sifuentes said, but smaller than Anchorage’s 133,179-square-foot store. The Fairbanks store will employ 150 to 200 workers, feature a 20,000-square-foot garden center and offer 500 to 700 parking spaces. Sifuentes said the company will begin construction once the city of Fairbanks issues building permits.  

Hats off to Alyeska for improving safety in Prince William Sound

Our group -- the Prince William Sound Regional Citizens’ Advisory Council -- doesn’t hesitate to criticize Alyeska Pipeline Service Co. when the occasion calls for it. Neither do we hesitate when praise is in order, and this is such an occasion. I am pleased by the improvements Alyeska is making to the crude oil transportation system in Prince William Sound and at the Valdez Marine Terminal, and it is time to say so publicly. The Sound has one of the safest crude oil transportation systems in the world. Alyeska’s contractor, Crowley, operates a fleet of 10 vessels, including five new escort tugs designed specifically to assist tankers in the challenging environment of the Sound. Since 1989, Alyeska and its owners have increased oil recovery capability more than 11 times; have increased containment boom from five miles to 35 miles; and have increased storage capacity for recovered oil from 27,000 barrels to more than 800,000 barrels. The Coast Guard operates one of the most modern vessel tracking systems in the world and closely monitors ice and weather conditions that could affect navigation in the Sound. An excellent system of weather reporting buoys provides critical information to operators of the tankers, their escorts and the public. Major stakeholders -- including the tanker operators, Alyeska, the Coast Guard, the Alaska Department of Environmental Conservation and the Prince William Sound Regional Citizens’ Advisory Council -- provide oversight for these systems and train together in drills and exercises that simulate oil spill response. Our group has not merely reviewed and commented on these developments, but it has taken the lead in some projects like the ice detection radar project. In collaboration with National Oceanic and Atmospheric Administration, the U.S. Coast Guard, the Canadian Coast Guard, the Alaska Department of Environmental Conservation and the Oil Spill Recovery Institute, the council is working on plans for a sophisticated ice detection radar system to be installed on an island near Bligh Reef. This radar will provide the Coast Guard and tanker operators with better information on ice presence and movements than any port has ever had. Alyeska’s support has been central to the radar project. The company has contributed site engineering, the tower for the radar equipment, logistical support and assistance with funding. At Alyeska’s Valdez Marine Terminal, years of deferred work were causing reliability problems in the complex operations of oil storage and tanker loading. Alyeska recognized the needs and has started to address them. A key example involves upgrades to the terminal’s Fire Prevention and Response System. Alyeska tested the seawater intake at the main fire water pumps and confirmed the capability to deliver large volumes of fire water anywhere on terminal grounds. After addressing a critical sludge problem in all 18 crude oil storage tanks, Alyeska tested and confirmed the ability of the foam system in those tanks to pump retardant foam to suppress a tank fire. Alyeska next successfully tested the foam delivery system in the East Metering Building, one of the most critical facilities at the terminal. There are other examples, ranging from upgrades to the tanker vapor recovery system to repairs of the piping that delivers ballast water from tankers to the shore-side treatment facility. With government oversight, continuous improvement, and citizen involvement, we can have both the benefits of oil production and protection of the environment that makes Alaska an incomparable place to live. Our council will never allow a return to the complacency that made the Exxon Valdez spill possible. History justifies our concerns, as do monthly spills on the North Slope. The oil delivery system consisting of the trans-Alaska oil pipeline, the Valdez Marine Terminal and the tankers have all been part of a proven engineering feat that continues to perform after 24 years. Alyeska’s maintenance and special project efforts are essential to ensure that, as it ages, this oil delivery system continues to meet the expectations of Alaskans for safety, integrity and environmental performance. All of this is an effort measured not just in the millions of dollars, but in the dedication of the men and women who work for Alyeska. We salute the company and its people for their work to reduce the risk of catastrophic oil spills from tankers and at the Valdez Marine Terminal. Stan Stephens, who operates a cruise- boat business in Valdez, is president of the Prince William Sound Regional Citizens’ Advisory Council. He can be reached by e-mail at ([email protected]).  

When is a business loan a good idea?

Borrowing money can be appropriate when the purpose is productive and the use of the money will cause liquidation of the loan. Here are a few examples of when it is appropriate to borrow money: * To purchase a piece of equipment used to make a product that will sell at a profit. Increased profits result from the additional equipment, which repay the loan. * To purchase inventory that is then resold, either in the raw form or as a finished good. The proceeds from sales then repay the loan. * To purchase a facility to house a business. The profits generated from the business being housed will repay the loan. In each of these examples, there is an additional source of repayment resulting from the loan proceeds: sale of equipment, liquidation of the inventory, or sale of the facility. Here are a few examples of loans that create greater risk that a borrower or lender should normally avoid: * To pay taxes. Taxes are a part of doing business. There is no repayment source derived from a loan for taxes. A business owner should be planning for this expense and holding back the cash needed. * To cover payroll. There are few instances that a loan should pay for normal operations such as salaries, supplies and rent. Unless salaries are used to generate well-defined revenue, the cash provided from the business should support normal operating expenses. A business owner should ask the question, "Does this salary benefit the business’ bottom line?" One of the few instances where this might make sense could be when a business is seasonal or service-related. Nevertheless, borrowing for operating expenses is higher risk. * To purchase personal assets or cover the cost of a vacation. Both of these reasons for borrowing suggest a lack of planning resources for future desires. There are exceptions for borrowing money for the above purposes. For instance, when money from operations is used to purchase equipment and subsequently the business is short of cash for taxes. A lender will take this into consideration when reviewing the loan request. When the banker requests collateral and will loan less than 100 percent of the value of the collateral, it’s to assure a repayment source is available to cover the full outstanding debt even if the primary source is lost. Neither the borrower nor lender succeed when a secondary source of repayment is insufficient to repay an outstanding obligation. The approach a lender takes to a loan request is exactly the same approach a potential borrower should take. * Do I have the means to repay the loan within the terms provided? * If my plan fails, can I still repay the loan from other sources? * Will the loan increase revenues or improve production, thereby reducing expenses? Borrowers are optimistic or they wouldn’t be requesting the loan. Justification can be easy if a borrower only reviews the positive elements in the request. A quality lender does a better job for a prospective borrowers by measuring the positive elements and comparing them to the risks associated with the loan. Bankers want to make loans when everyone gains from the credit extended. If you are considering borrowing money, even if it’s from Cousin Bob or Uncle Ralph, I encourage you to present your package to a banker and see what he thinks about your project. I can assure you the banker is the "ultimate sounding board" who will help you see the risks, and thereby determine if the rewards are worth it. Ron Kukes is president and chief executive of First Interstate Bank of Alaska. He can be reached via e-mail at ([email protected]).  

Icy Straits to add dry kilns as one of seven companies to receive federal grants

JUNEAU -- Icy Straits Lumber Co. in Hoonah hopes dry kilns will take its manufacturing operations over a value-added hurdle."Right now we sell wood and tell people to make sure they dry it for a couple of weeks inside, under cover," general manager Wes Tyler said.With federal support, Icy Straits plans to purchase two small dry kilns that will give its products more of an edge in the marketplace. Each kiln should hold about 15,000 board feet of timber, Tyler said."It adds value to wood that wouldn’t have very good value. We’re able to make a lot of products we weren’t able to make before. But one of the greatest things is we’re going to put more people to work and keep more people at work," he said.Icy Straits -- a division of Whitestone Logging -- processes a wood mix of about 70 percent Western hemlock and 30 percent Sitka spruce at its Hoonah sawmill. With the dry kilns, the company will be able to tighten its focus on dimensional lumber, paneling and tongue-and-groove decking for floors.Whitestone employs about 95 people, with 15 to 20 people employed at the sawmill. Tyler said the company hopes to expand markets in Hoonah, Juneau, Gustavus, Haines and Interior Alaska. In Juneau, company representative Lloyd Anderson began selling Icy Straits’ products in April from a lot near Costco.Icy Straits is one of seven Alaska forest product companies to get federal support to build new dry kilns, planers and lumber-storage facilities. A dry kiln keeps lumber from shrinking and warping and makes wood stronger.Sen. Ted Stevens, R-Alaska, with help from the Alaska Forest Association, secured $2 million last year to open markets and foster value-added manufacturing, according to the U.S. Forest Service. The agency grants range from $53,000 to $700,000, forester Alan Vandiver said.Grant recipients were selected from a list of 38 applications based on how much money the companies were willing to contribute, how many jobs might be created and how much value could be added to the products, Vandiver said."It turned out we funded some moderate-sized mills, some very, very small ones and a mix in between," he said.The businesses that will receive funding make doors, windows, moldings, hardwood flooring, siding and other products. Kiln drying time depends on the moisture content of the wood."Companies realize that wood is going to get harder and harder to get. The further you can stretch the wood you’re getting, the better utilization you get out of the resource," Vandiver said.Rol-An-Door Enterprises in Ketchikan is a small, family-owned business that will use a $80,000 grant to make doors, window casings and trim out of Southeast Alaska wood. The matching funds will be used to purchase a milling machine and a dry kiln with 12,000- board-feet capacity, according to Uriah Rolando."We’ll be able to take rough, wet lumber and dry it, then mold it into the components we need," he said. "It makes it more economical."The company uses yellow cedar, red cedar, hemlock and spruce and has a small stained glass studio for custom doors, Rolando said. Rol-An-Door hopes to have operations set up by the end of the summer and will market to trade shops and architectural firms in the Pacific Northwest.Rolando said the company’s yellow cedar products are highly rot-resistant."We think we have something fairly unique," he said.In Wasilla, Poppert Milling will use a $205,000 grant to expand markets in Alaska and the Lower 48. The company produces tongue-and-groove flooring, wall paneling and architectural molding, according to production manager Dave Poppert.The company already operates dry kilns and will use the funding for three new 10,000-board-foot kilns, dry storage and a planer, he said."You can’t build cabinets out of a green piece of wood. Kiln drying takes the process into a specific time frame of two to three weeks," he said. It might take birch a year to 18 months to air dry, he said.The bulk of Poppert Milling’s wood comes from the Trapper Creek area, and the family-owned company uses Alaska birch, cottonwood and spruce.The Southeast Alaska Conservation Council supports efforts to set up dry kilns in the region, grass-roots organizer Matthew Davidson said."It’s a step in the right direction. Anything we can do to add value to trees, through in-state processing or finished projects, is good for the resource and good for the economy," he said.Other companies slated to receive federal funding are J&J Enterprises in Willow, The Valley Sawmill in Point MacKenzie, Viking Lumber in Klawock and W.R. Jones & Son Lumber Co. in Craig.

Bush may turn back Clinton mining rule change

FAIRBANKS -- The Bush administration is considering overturning a last-minute Clinton administration rule setting new mining regulations, according to the Fairbanks Daily News-Miner.Opponents to the Clinton-era rule include Sen. Harry Reid, D-Nev., the second-most powerful Democrat in the Senate’s new majority. Overthrowing the rule could affect more than 100 operators on federal land in Alaska.Under the old regulations, only larger mines had to obtain a bond to guarantee that the land would be "reclaimed," that is, naturally contoured and covered with topsoil after mining was complete. The miner also could pledge corporate assets as backing to obtain the bond.If a mine limited its current working area to five acres or less, no bond was required.The new regulations say all miners must obtain a bond, regardless of acreage, and corporate assets can’t be used as backing. The rules also may outlaw the kind of bonding pool that many small miners in Alaska use to meet the requirements.Reid led a fight to limit the Clinton administration’s mining regulations last year.While Reid didn’t succeed in blocking the rules, he did manage to pass a law that said the new regulations had to be consistent with recommendations from a National Academy of Sciences report on the nation’s mining laws. That report recommended few changes.After the final rules were published on Jan. 20, the day Clinton left office, mining groups and others filed suit. They said, in part, that the rules violated Reid’s legislation.In March, Secretary of the Interior Gale Norton proposed to suspend the rules."BLM has concerns about substantial policy and legal issues raised in the lawsuits and wants to resolve such concerns before implementing a new regulatory program," the agency said in explaining why it proposed the suspension.

It's time Alaska competes on salmon

Let’s talk about salmon.The state of Alaska recently released the latest salmon industry statistics. Summed up, canned salmon sales have increased over the past five years and frozen salmon sales have declined. The drop in the frozen market was not offset by the increase in canned sales.Farmed-raised salmon is taking over the market, particularly for high-end frozen and fresh product sales, leaving Alaska little more than a few boutique niches, like Copper River, and the bottom-rung canned market.Within the Alaska salmon industry the outcry about what has happened to the international salmon market has become deafening.If Alaska is to continue to be a major supplier in either the international or domestic salmon market, it is time to quit whining and start working on ways to remain, or more appropriately, return to competitiveness in this arena. We can start by separating some realities from fantasy.First, the farmed salmon industry is here to stay. It will not be legislated or regulated away. It has been so successful because it is responding very effectively to the demands of basic consumer behavior. Reliable supply, consistent quality, competitive prices and improving standards are the basic elements the fish farming industry has used to take control of the market. They are delivering a product buyers believe is both a good value and of high quality.Second, the government can’t save us. The latest bailout scheme is to request a finding that foreign producers are "dumping" their farmed products on the U.S. market, displacing Alaska-caught wild fish.There are glaring problems with the dumping approach. A finding for dumping requires proving the product allegedly dumped is being sold at below production cost. The fact is, farmed salmon, no matter what the source, foreign or domestic, costs less to produce and get to market than Alaska fish.Even if by some political miracle a dumping restriction were to be put in place, the vacuum in the market would be filled with increased numbers of domestically farmed fish, not Alaska salmon.The use of environmental regulations to shut down farming holds little more promise than the dumping argument. The fish farming industry is already moving to "dry land production" to negate water quality, escapement and contamination complaints.Third, consumer behavior is what it is. Price and quality are by far the biggest factors in a buyer’s decision. There may be some consideration give to other intangibles, such as catch methods, sources and organic certification, but they are comparatively small concerns.Therefore, it can be surmised that our uniquely Alaska problems, such as transportation costs, up-and-down runs and inefficient allocation processes will have little to do with a consumer’s choice of salmon products. Not many consumers are going to pay more for salmon just to feel good about supporting the Alaska fishing industry.Despite the difficulties, things can be done to re-establish Alaska as the world’s premier salmon producer. None of them is more important than understanding how important quality standards are to successful salmon marketing efforts.The one bright spot in Alaska salmon’s competition with farmed products is based on taste comparisons. Wild Alaska fish consistently scores better in side-by-side taste tests. This is the cornerstone on which to build. As it comes out of the water, Alaska salmon is the clear choice for best flavor. This superiority can be used to ensure a place in the market as a premium product, one commanding a high margin.Unfortunately, Alaska salmon’s superior value is often lost while the fish journeys from water to table. Those taste tests compare farmed products to hand-selected, carefully prepared fresh Alaska salmon fillets. Very seldom is this the actual Alaska salmon offered to the consumer.More often than not, the supermarket shopper is confronted with a frozen, or previously frozen hunk of fish. Bruises, skin damage and scale loss, freezer burn and deterioration from overlong storage are very common.Initial processing leaves the fish unbled, poorly cleaned and looking like it was butchered with a chain saw. The result is, rather than learning to appreciate the superior quality of Alaska fish, buyers often end up taking fish home that is of marginal flavor and appearance, and is sometimes just plain nasty.Consumers remember when they get stuck with bad products. Alaska salmon producers are asking customers to pay premium prices to gamble on products in a range from great to gross, and the consumers are saying no. If you want to sell at premium price, you have to be able to guarantee delivery of a premium product.In conclusion, let’s talk about what to do about this, who should do it, and -- perhaps most importantly -- who should pay for it.Uniform quality standards for all aspects of the industry should be codified. They should include rules governing handling, grading, processing, storage, transport and shelf life. Regulations of this sort give consumers confidence in other foodstuffs including eggs, milk and meat.These rules should make it impossible for a supermarket shopper in Des Moines, Iowa, to buy a bad piece of Alaska salmon. Ideally the standards would be put in place by the state with the rule of law behind them. However, it is doubtful the Legislature will ever have courage enough to enact this sort of program. Therefore it falls to industry to do it.While AFDF has been speaking out on this issue for some time, broad industry support is required. It is time for those who have a stake in the industry to act. As for who pays, if we want improvements to occur in our industry, helping our bottom lines, making our lives better, we will have to pay for them. Which is as it should be.Marc S. Jones is executive director of the Alaska Fisheries Development Foundation. The opinions expressed are his alone. He can be reached via e-mail at ([email protected]).

Gottschalks weeds its Lamonts stores

In addition to the Gottschalks at University Center, company officials are closing four other stores in the Pacific Northwest. Gottschalks Inc. closed five former Lamonts stores in June including one in Alaska. The Fresno, Calif.-based retailer was due to close the University Center store in Anchorage after deciding earlier not to renew its lease at the mall. "The lease was up, and we chose to remain operating in the two better centers, Northway (Mall) and of course, Dimond (Center)," Gottschalks President Jim Famalette said in a telephone interview. Gottschalks officials sold the leases for four Pacific Northwest stores for a total of $2.9 million, the company reported in its first-quarter earnings statement released in May. Three of these stores were in small locations in eastern Idaho and Oregon in what Famalette called in the earnings statement "markets we determined were not a good long-term fit for Gottschalks and where we were unable to leverage our marketing and logistics costs." Gottschalks closed stores in Pocatello and Idaho Falls, both in Idaho, plus another in Astoria, Ore., Famalette told the Journal. The retailer also closed one store in Anchorage and another in Seattle. "We do not anticipate the store closings will have a material impact on our second quarter financial performance," he said. Gottschalks reported a net loss of $4.6 million for the quarter, compared to a loss of $841,000 for same period last year. Same store sales for the quarter, excluding former Lamonts stores, which have not been operating for 12 months, increased 4 percent for the quarter compared with first quarter 2000 results. "While our same stores continued to meet our top line growth expectations during the first quarter, our recently acquired stores in the Northwest did not perform as we had originally projected," Famalette said. "Our financial performance for the first quarter was adversely impacted by lower than expected sales in our Northwest stores and the resulting gross margin impact of higher markdowns in these stores to move through seasonal inventory. The inventory levels at those stores are now in line with our revised sales expectations going forward." After closing the University Center store, Gottschalks will operate two Anchorage stores, plus one store each in Fairbanks, Juneau, Soldotna and Wasilla. The University Center lease expired in June, Fred Bentelspacher, Gottschalks vice president of marketing, told the Journal earlier this spring. The last day at the mall is set for June 16. The decision was based on lagging sales volume per square foot at the location compared to other stores, he said. Bentelspacher did not offer sales figures for comparison. Location was another factor coupled with prospects for the mall, he said. "We were not sure about the future of the mall so we didn’t want to sign another long-term lease," Bentelspacher said. Gottschalks employed 45 full- and part-time workers at the University Center location, he said. Employees could be transferred to Gottschalks’ two other Anchorage locations. The retailer acquired all but one of Kirkland, Wash.-based Lamonts Apparel Inc.’s 38 stores last year after that company filed for bankruptcy. Gottschalks reopened 34 of the stores under its own name last September.  

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