“An unfortunate but temporary step,” said management.
King Cove, Alaska
By Nat Herz/Northern Journal
January 11, 2024
In a major hit to Southwest Alaska’s fishing industry, Peter Pan Seafood Co. will keep its huge plant in the village of King Cove shuttered this winter, meaning that the company won’t be processing millions of dollars worth of cod, whitefish and crab.
“It’s one of the most difficult days of my life,” Rodger May, one of the company’s owners and a longtime player in the seafood industry, said in a brief interview Thursday. “It’s just a devastating time for the industry.”
The closure is the latest sign of the widening turmoil in Alaska seafood markets, which are contending with depressed global demand across many different species and intense competition from producers in Russia.
Last month, one of the industry’s biggest processors, Trident Seafoods, said it would sell off four of its plants amid a restructuring, and over the summer, salmon fishermen in Bristol Bay staged a floating protest of historically low prices offered for their catch.
“You can’t keep on going to work producing product and selling it at a loss,” May said, adding that his company remains “asset rich” and is not close to declaring bankruptcy.
Peter Pan first informed local officials Thursday about the closure in King Cove, where its plant contributes some $2 million in yearly fish tax revenue for the community of 850 people.
The winter months that the plant will stay closed typically generate roughly one-third of that revenue, said Gary Hennigh, King Cove’s city administrator.
May worked with two investment firms — including Anchorage-based McKinley Capital Management, which was using money from Alaska’s state-owned Permanent Fund — acquired Peter Pan in 2021 and made a splash in the industry by offering fishermen high prices for their catch.
But as the industry ran into trouble this year, signs of instability at the processing company had been popping up for months.
An array of fishermen and companies filed liens against the processor last year for unpaid deliveries of seafood, including, in December, one of the stars of the Deadliest Catch reality show.
Erik Velsko, a fishermen from Homer who delivered cod to Peter Pan last year, said his payments were months late, and he plans to fish for Trident this winter instead. Other fishermen and boats, however, may not be able to find another processor to buy their catch.
“Trident, they can’t just take every boat,” Velsko said Thursday. “I think there are a lot of boats that don’t have markets.”
Statement by Peter Pan Management
We are saddened to inform our fishermen and the King Cove community that Peter Pan Seafood will not be able to operate our King Cove facility for the 2024 A Season. This is an unfortunate but temporary step. We will be open for the 2024 B Season, and we remain steadfast in our commitment to Alaska, our fleet, and the communities where we do business.
We did not come to this decision quickly or easily. The current state of the seafood industry is tumultuous, and it has impacted many operators in the region. The industry is facing inflation, interest rates hikes, financing challenges, and high fuel costs. We have worked through these issues as diligently as possible and have explored possible options. This temporary step, while difficult, is necessary to maintain our long-term commitment to the future of our business in Alaska.
We remain committed to continuing to provide the best service and support possible to our fleet, communities, and stakeholders while continuing our mission to be an exemplary global supplier of top-quality and responsibly sourced seafood. Looking to the future, we will employ more than 1,000 this year as we open the King Cove facility for the 2024 B Season and our other three facilities as normal for the salmon season.
We are steadfast in our future commitment to Alaska, our fleet, and the communities we do business in. We are grateful for the strong relationship we have with King Cove and we remain committed to doing everything in our power to support the community and fishermen during this time.
About Peter Pan Seafood
Peter Pan Seafood Company, LLC is a vertically integrated seafood company dedicated to a strong future of prosperity and sustainability composed of Peter Pan Seafood’s assets and the value-added sales channels of Northwest Fish Co., LLC (“Northwest Fish”). The ownership group is Rodger May of Northwest Fish, the Na’-Nuk Investment Fund, LP (managed by McKinley Alaska Private Investment, LLC and McKinley Capital Management, LLC), and the RRG Global Partners Fund (managed by RRG Capital Management, LLC).
Jennifer Thompson, Thompson & Co. PR