By Bob Tkacz
For the Journal

Two major South Korean food companies, working separately to introduce Alaska salmon to their huge domestic seafood market have found mixed success as their first fresh-fish-buying season here draws to a close.

One company could get less than half of the 500 metric tons it wanted. The other's plans to reopen the shuttered Port Graham village cannery and ship finished product in Alaska are on hold until next year.

Copper River Seafoods, the supplier for both Korean companies, expects to sell upward of 200 metric tons of salmon to Dongwon Food and Beverage Co. Ltd. this season and has begun selling its popular smoked sockeye in jars to Lotte Ham & Milk Co. Ltd. Lotte Ham & Milk is one of 10 food and beverage businesses among 34 subsidiaries of the Lotte Group, which posted $20 billion in overall sales in 2003. Dongwon pioneered Korean's canned tuna market in the 1980s and claims 75 percent current sales there. It annually produces 80,000 metric tons of tuna products.

"We're trying to help develop the market over there for sure," said Scott Blake, president of Copper River Seafoods. "The reason it worked with Dongwon is they were capable of buying H&G (headed and gutted) product from us, and we were capable of producing it without large investment this year."

By mid-August, Copper River, for which canned fish has not been a major product to date, had shipped about 140 metric tons of frozen H&G pink salmon to Dongwon's facilities for final processing.

"We are about to ship another 20 tons of filleted pinks and another 20 tons of coho fillets," said Andy Kwon, president of M.C. Corp., Aug. 16. The Anchorage-based trading company partnered with Copper River in the development of the new market and completion of what was Dongwon's original 500-ton purchase target. A serious shortfall in pink salmon returns to Prince William Sound Aquaculture Corp. hatcheries left them short.

"Given that the pink season is coming to a fast closure we don't have enough fish to send to them," Kwon said. Dongwon is talking with other suppliers for the 2005 season, but soloed with Copper River this year because of its focus on quality.

"We wanted to make sure we identified the supplier and had a consistent quality of fish. Since Prince William Sound was chosen, and in particular Copper River Seafoods was chosen, we're sticking with Copper River Seafoods," Kwon said.

Dongwon began buying coho partly to fill the immediate pink shortage, but also as part of long-term plans for what is still an exotic fish to most Koreans. "We're trying different approaches so we can expand the type of salmon as well as different products we can create. We don't want to limit ourselves to just one product," Kwon said.

"Since there's no salmon market in Korea they wanted to make sure they import the best quality pinks to open up the market so they can follow suit with sockeye, coho and kings," explained Joe Egemo, Copper River's general manager and chief financial officer. Dongwon's "very tight specs" for product color and texture further limited the volume of wild pinks available from the PWSAC harvest, he added.

In contrast with Dongwon, Lotte determined that canning in Alaska would yield a better product than final packing in Korea and began looking at available facilities early this year. A Lotte research team visited the Seattle headquarters of Alaska's major seafood companies as well as Kenai Peninsula and Prince William Sound plants this spring and had focused on the Port Graham plant by the time state officials arrived in Seoul for the "Alaska Salmon Experience" promotion, May 24-25.

The inability to retool the Port Graham plant to produce pop-top cans in the 150-and 170-gram Korean sizes in time for operation when the fish returned in July scotched that project for the year. Lotte set a June 30 deadline for completion of the refit but after being shut down for more than two years, the mechanical and logistical challenges were too great to overcome in the available time. No remodeling work was done in the plant this year.

"We're going to regroup and move forward for next year," Blake said Aug. 20. He couldn't, however, guarantee Port Graham would be part of the plan. "That would be the intent ... We don't have the details worked out. We haven't gotten that far," he said.

Earlier this year, Lotte gave Copper River Seafoods and the Port Graham Corp. a confidential letter that expressed its "strong interest and commitment to enter into long-term supply agreement" through a joint venture partnership between Copper River Seafoods and Koskimo Co. Ltd.

Koskimo, the Korean word for "Eskimo," is another Korean-Alaska company established by Anchorage businessman Kenneth Zong. Zong organized the state's May promotion and also announced plans at that time to open the Koskimo restaurant chain with an exclusively Alaska seafood menu. Zong said he hoped to open a 250-seat Koskimo in Seoul this year.

The letter, read to a reporter by an official, declared Lotte's intent "to enter into a long-term supply agreement" with the joint venture, based on the joint venture partners' ability to retool the plant with processing equipment that meets Lotte's standards. It also declared that Lotte expects "to execute the long-term agreement with the joint venture company as soon as commercially practicable."

In the meantime, Lotte is buying 10,000 jars of Copper River's smoked salmon for sale during Korea's New Years festival in February when gifts of food are traditionally exchanged. "We should be shipping that out toward the end of this month. It's a large smoked salmon order," Blake said.