BBNC nets two fishing companies in one deal
The Alaska Native corporation with a “fish first” principle is making its first foray back into the signature Alaska industry in roughly 40 years.
Bristol Bay Native Corp. announced an agreement Sep. 17 for it to purchase Blue North Fisheries and Clipper Seafoods, two Seattle-based longline fishing companies that operate in the large Bering Sea Pacific cod fishery.
BBNC CEO Jason Metrokin said in an interview that Blue North and Clipper will be merged into a new subsidiary, Bristol Bay Alaska Seafoods, when the deal closes Sept. 30.
Metrokin said BBNC focuses on providing economic value and employment opportunities for its shareholders while being good stewards of the region’s land and resources, and acquiring Blue North and Clipper was an opportunity to check all of those boxes.
“They’ve got experienced management and executives; they have a quality brand and they’re known for safe fishing and quality products,” he said of the fishing companies. “You add all of those things up at a time when BBNC was looking for an investment in seafood and it made tremendous sense for us to start here.”
Bringing ownership of the seafood resource back to Alaska — through the Pacific cod fishing quota held by the companies — was very important to BBNC, Metrokin added.
BBNC owned Peter Pan Seafoods in the late 1970s and has been out of the seafood business since, he said.
The company has also formed Bristol Bay Seafood Investments LLC, a holding company for Bristol Bay Alaska Seafoods and any other future seafood forays, according to a Sept. 17 company statement.
Clipper Seafoods President David Little, who will manage the merged company, said BBNC is simply a “really good fit” for Blue North and Clipper.
“I’ve always believed, and I know Mike Burns, the president of Blue North feels the same way, that the Native corporations or the Native economic development corporations were always going to be the rightful owners of these seafood businesses over time and so we’ve been talking to a number of them over the years and we found that Bristol Bay Native Corp., in our opinion, is the leader of all of them and we’re really impressed with the way they run their operation and their business knowledge,” Little said.
He added that senior staff at the companies will remain with Bristol Bay Seafoods.
By combining the Blue North and Clipper fleets, Bristol Bay Seafoods will have a fleet of 11 large fishing vessels and it will hold 37.4 percent of the freezer longline sector Bering Sea and Aleutian Islands Pacific cod quota, according to Little. He said the freezer-longline sector holds about half of the overall harvest limit of Bering Sea and Aleutian Islands Pacific cod, which is about 175,000 metric tons this year.
Set by the North Pacific Fishery Management Council and approved by National Marine Fisheries Service, or NMFS, the annual total allowable catch for the massive Western Alaska Pacific cod fishery has fallen sharply from its near-term high of 261,000 metric tons in 2012.
The freezer longline sector is one of nine gear and fishing type sectors that fish for Pacific cod in Western Alaska waters.
However, Little noted that cod stocks can rebound quickly and there is optimism among cod fishery managers and participants that current juvenile recruitment can lead to more harvest opportunity soon.
Based on Little’s figures, Bristol Bay Seafoods would hold approximately 33,000 metric tons of Pacific cod harvest quota in 2019. According to the latest data available from NMFS, the first wholesale price for Bering Sea Pacific cod caught by freezer longline vessels averaged $1,665 per metric ton in 2017, which would translate to nearly $55 million of wholesale value for the combined Blue North and Clipper 2019 quota.
Additionally, freezer longline vessels averaged $6.4 million of revenue in 2017, according to NMFS reports, or $70.4 million total extrapolated to the 11 vessels owned by the two companies.
Metrokin declined to disclose a price for the deal, but he did say it “will ultimately be one of BBNC’s largest company acquisitions in our history.”
Blue North and Clipper are companies that have recognizable brands, high-quality products and a presence in markets around the world, making them a sound investment despite the current down cycle in Pacific cod stocks, Metrokin said.
And while freezer longline vessels cumulatively harvest thousands of tons of cod each year, Little described the freezer longline sector as a “boutique fishery” in that longline vessels can typically harvest only about 10 percent of the volume of fish that a trawl vessel can in a given day. Instead, freezer longline companies focus on quality instead of quantity.
“Our fish is primarily destined for white table cloth restaurants around the world whereas a lot of trawl-caught fish is destined for fish and chips,” Little said.
The Blue North and Clipper fleets are comprised of relatively new vessels, meaning there are no immediate plans to invest in new vessels or other major infrastructure, according to Little, who also said the companies’ offices are likely to remain Seattle where the fleets are based.
The vessels will stay in Seattle when they’re not fishing simply because that’s where the shipyards are and large boats require lots of upkeep.
Little noted that the busiest time for a fishing company’s office staff is usually when the vessels are home from the fishing grounds.
“It’s important to have an office in Seattle or somewhere close to ship repair and maintenance,” he said.
Metrokin said BBNC leadership is enthusiastic about getting back into the fishing industry through a fishery that takes place near the company’s region and aligns with its mission.
“Every time we make a business decision we want to know what the benefits or impacts will be to fish and while this investment is outside of the Bristol Bay fishery, it still meets our value, our mantra, of fish first, so it’s very much in alignment with where BBNC is going,” he said. “It may be a stepping stone, a very large stepping stone back into the seafood sector and we’re excited about other opportunities that might present themselves down the road.”
Elwood Brehmer can be reached at [email protected].