Silver Bay Seafoods making bold moves for 2018 rebound

Nov 24, 2017

Mega-buyer to bring legendary John Lowrance back to Bristol Bay, improve food and living conditions at the Naknek plant, add a second four-station tender, aim for a final 2017 price of $1.50, and hopefully drop 50 boats before next summer.

Credit KDLG

The record-setting 2017 commercial sockeye season in Bristol Bay was tougher than usual for most companies in Bristol Bay. The run size, 56.5 million total, was a whopping 42 percent bigger than the state predicted, and the 37.7 million sockeye landed was 10 million more than anyone was planning for.

Nearly every company “plugged” up and put their fleet on limits while they struggled to keep up. Added to that list in 2017 was Silver Bay Seafoods, whose processing plant in Naknek fell behind the massive harvest its highliner fleet was bringing in.

This was never supposed to happen. Silver Bay Seafoods built the Naknek plant from the ground up to freeze huge volumes of salmon. Their fishermen, who buy shares to become part-owners, signed on with hopes to never be on limits, and maybe get a premium price, too. As the company did with pinks in Southeast, SBS hoped to raise the value by sending head-and-gutted sockeye to Asian markets for reprocessing. By year two, just as other big buyers were beginning to follow suit, Silver Bay Seafoods moved towards fillets, which expanded each subsequent season. Its aim was to produce the quality of Leader Creek at volumes previously reserved for canning.  

Fishermen flocked over to the new titan. Ahead of 2017, SBS signed on some 50 new skippers, pushing the fleet to around 250. Even before the first net hit the water, fishermen were correctly nervous that their company had too many boats. Still, among the many developments, twists, turns and statistics of the 2017 season, perhaps none was spoken of with such shock as “Did you hear Silver Bay went on limits?”

At a meeting last week with its fishermen, many of whom shared details but asked their names not be included, Silver Bay addressed some of the main issues and pledged solutions. Topping the list of problems is the 50 boats too many, which SBS hopes to cut before next season. Disgruntled as some fishermen were, it seems few – if any – are willing to go voluntarily.

Getting fish delivered to the plant in good time was a problem, too. The company told its fishermen that “millions” of pounds had come in at very low quality after having sat too long in tenders, and often after having been “deckloaded” on the drift boats. There was a crucial pump that failed, and spare parts were not on hand. Mild high tides also cut back the number of hours tenders could pump off fish at the plant a few miles up the Naknek River. The fleet office had issues: fleet manager Chris “Coach” Hansen left Naknek for a family commitment that had been arranged and approved preseason, but his fishermen are still harshly critical of that move. Hansen’s number two – and possibly others – walked off mid-season, disgruntled.

Then there were the workforce problems that slowed operations, drew negative press, the attention of Alaska’s governor, and an investigation by state and possibly federal labor officials.

“The Silver Bay Seafoods inspection at the Naknek location is not yet complete,” Deborah Kelly, the Director of the Division of Labor Standards and Safety, updated last week. It’s nearing completion, we’re hoping to have it done shortly.”

Kelly said Silver Bay was not the only company the state received complaints about, and that across the industry, the number of complaints seem to have gone up. They are “across a range of issues,” including workplace safety, wage and hour regulations, and general labor standards.

Krystyna Markiewicz, Chief of Alaska Occupational Safety and Health (AKOSH), has been watching this industry for decades. What she saw in 2017, including under-trained, tired employees working long hours, improper pay, and complications due to language and cultural barrier, happen every year.

“In my opinion the issues are not different than in previous years. What happened this year, I think, is that seafood companies brought employees from Puerto Rico, and they are not afraid to speak up,” she said. Silver Bay leaned heavily on labor from Puerto Rico, and some of the workers alleged extremely poor treatment when they went home. The Governor of Puerto Rico took those complaints personally to Gov. Bill Walker, singling out Silver Bay Seafoods by name.

SBS fishermen say the company has already revamped the food program and is building a new bunkhouse in Naknek to improve working conditions. Last season some plant employees had to bussed back and forth from housing in King Salmon, and complaints about the food circulated widely.

Another notable way Silver Bay is rebounding for 2018: John Lowrance has agreed to come out of retirement to help run or consult on operations next year. Lowrance, who built Leader Creek Fisheries from the ground up, is revered as something of a Bristol Bay legend for the quality and value-added revolution he started in 1999.

Silver Bay is said to be acquiring another mega-tender that can buy at four stations. A similar vessel used last year was much appreciated by the fleet for how quickly it moved the delivery line along.

And the company also had a very profitable year, its fishermen said, though some were disappointed to not be paid off for the lost fishing time when they were on limits in Bristol Bay. They do believe, however, that the company will settle on a fish price of $1.50/lb for the 2017 catch. That news appeared to soothe the hard feelings of even the most cantankerous fishermen in their fleet.

dave@kdlg.org or 907-842-5281