Updated Feb. 2, 2024
OBI Seafoods announced Wednesday, Jan. 31 it will not open its summer fish processing plant in Larsen Bay, on the west end of Kodiak Island. The company will still buy salmon from the area’s fishermen, but will rely on its facility in the city of Kodiak instead. KMXT’s Brian Venua reports it’s the latest plant to close in a tough year for Alaska fisheries:
Duncan Fields has fished in in Larsen Bay since 1961.
"And we were part owners in Kodiak Salmon Packers that owned the facility for about 25 years so I have deep personal and emotional ties with the plant in Larsen Bay," he said.
Major processing companies in Alaska’s seafood industry like Trident and Peter Pan have announced they’re either selling assets or closing plants for upcoming seasons. Now OBI is joining them in closing its processing plant on the west side of the island for summer 2024.
The site in Larsen Bay, first built by the Alaska Packers Association in 1911, was later bought by Ocean Beauty Seafoods, which merged with Icicle Seafoods to become OBI in 2020. The company is based in Seattle, with 10 plants in Alaska.
Fields said he’s not surprised the plant will close.
"Disappointed, but not surprised," he said. "We’re in a crisis – [the] word seems to be overused these days – but in truth the Alaska processing sector is facing headwinds on many fronts and particularly relative to salmon and salmon marketing."
All of the salmon harvested in Larsen Bay will instead be shipped to Kodiak to be processed by OBI's plant there. Fish may also be shipped to support facilities in Seward and Cordova according to OBI's announcement.
John Hanrahan, the company’s chief executive officer, said in a press release the decision was made in part because of a poor pink salmon forecast. The Alaska Department of Fish and Game also predicted a “weak” overall salmon run in 2024 last month as part of its forecast for Kodiak.
Hanrahan also cited “tough market conditions,” saying the Kodiak plant “has the ability to process salmon in a greater diversity of product forms making it better suited to respond to salmon markets in 2024.”
The company will however keep a small team at the Larsen Bay plant to provide services for its fleet. OBI officials declined a request for an interview, referring back to statements in the press release.
Ex-vessel prices, which is what fishermen are paid at the dock, for salmon were at record lows this year, which sparked protests in places like Bristol Bay and call for more transparency in the industry.
Trident fishermen even had their salmon season shortened across most of the state last year. The company blamed, in part, an influx of Russian fish in global markets.
But in a small community like Larsen Bay, which has fewer than 50 year-round residents, keeping the plant closed for the year could have a heavy impact.
Larsen Bay Mayor Bill Nelson said in a phone call on Feb. 1 the village will still provide utility services, like electricity, to the processing plant for its reduced crew. The community also has other revenue streams, including from seven nearby lodges. But Nelson said the whole village will have to tighten its purse strings to make ends meet.
Fields, the fisherman, agrees it will be a lean year for the village’s finances.
"The sales tax that would come to the city of Larsen Bay will not happen this year," he said. "So it’s a very small community – that’s a large part of their revenue and so that will be devastating."
The Larsen Bay plant has closed for a summer before, most recently in 2020 during the COVID-19 pandemic, but Nelson said they had some federal stimulus money to help relieve locals' financial woes.
OBI plans to reopen the Larsen Bay plant in 2025, but Fields said he’s still worried about the longevity of the facility.
"It’s hard to start those back up again – you’d have a crew that doesn’t have a job for a year, they'll go elsewhere," he said. "And as you get that crew back, you have all kinds of other costs that are increased because you haven’t operated for a year."
Fields said he understands OBI is just trying to survive as a company, and hopes they can continue to be a partner in the community.
Editors note: a previous version of this story was posted without an introduction.
