By Margaret Bauman
Alaska Journal of Commerce

Two major Japanese companies heavily invested in processing some of the same Alaska fisheries will merge in October into a new entity, Maruha Nichiro Holdings Inc.

According to Maruha Group, Japan's largest seafood producer, its merger with a smaller competitor, Nichiro Corp., will be completed Oct. 1. Maruha first announced plans for the merger in Tokyo in early December.

Maruha's Westward Seafoods, with processing facilities in Dutch Harbor and near Anchorage, processes several species of fish and crab, fishmeal, fish oil and surimi. Nichiro's Peter Pan Seafoods, with plants in King Cove, Dillingham, Valdez and Port Moller, processes salmon, several other species of fish and crab, as well as fishmeal, fish oil, salmon oil, surimi and surimi seafood.

Peter Pan Seafoods recently was awarded a matching grant worth nearly $445,000 from the Alaska Fisheries Marketing Board to promote seafood sales. Peter Pan is one of several dozen companies that shared in $7.8 million in grants from the federal Saltonstall-Kennedy Fund. The fund is fueled by duties and tariffs levied against foreign seafood imports.

Officials from Westward Seafoods and Peter Pan Seafoods have so far declined comment on how the merger would affect their operations in Alaska, which process tons of seafood annually. A top official of Peter Pan Seafoods said it was too early to tell, and officials from Westward Seafoods did not return phone calls.

“Maruha and Nichiro are respectable and well-managed companies, and the merger makes economic sense for them,” said Jeff Stephan, manager of the United Fishermen's Marketing Association in Kodiak. “However, because these companies hold individual processing quotas in the Bering Sea/Aleutian Islands crab fisheries, in addition to the American Fisheries Act privileges, these mergers will more than otherwise affect their operations in Alaska, impact all species, and significantly affect prospects for economic growth and health in coastal Alaskan communities.

“The Bering Sea/Aleutian Island crab individual processing quota program was designed with incentives that encourage consolidations, combinations and concentrations in the Bering Sea/Aleutian Island crab processing sector, and impose artificial restrictions on competitive markets and harvesters,” Stephan said. “The Bering Sea/Aleutian Islands crab individual processors quotas and AFA privileges that are owned by the merging companies will significantly impede the ability of Alaskan coastal communities, harvesters and, indeed, the fishing industry to rebalance and to readjust to the ultimate impacts of these mergers.”

Maruha Corp. is one of 168 companies in the Maruha Group. Westward, which is currently hiring workers for the upcoming groundfish fisheries, has the capability of process 65,000 metric tons of seafood annually. The Japanese-owned, Seattle-based company was founded in 1991. Through its affiliated businesses, Maruha is also involved in sales of a wide range of products, from seafood and canned food to flavorings, health food, pharmaceuticals and cosmetics.

Nichiro, founded in 1914 as Nichiro Fishery Co., has 29 subsidiaries and five affiliates. Its main area of business is manufacturing and sales of processed foods, as well as harvesting, purchasing and selling marine products. The company is also in the cold storage business, manufactures and sells packing and packaging machines, and operates the Hakodate Kousai Hotel, an upscale hotel in Japan.

Margaret Bauman can be reached at margie.bauman@alaskajournal.com.