The privately held company ranked as one of the major players in Alaska's salmon industry, and its financial troubles reflect the stiff competition from the farmed salmon that is now a year-round fixture at seafood counters around the world.
The Seattle-based company — owned by the Brindle family — announced yesterday that it's shutting down salmon operations. Unable to gain bank financing for the new year's harvest, the company now plans to put all its Alaska salmon plants up for sale.
Wards Cove has retained Zachary Scot, a Seattle investment banking firm, to sell the plants. The company
will continue to operate Alaska plants that process pollock and crab. "This is a very sad day for the Brindle family, our employees, our fishermen and our friends throughout Alaska and Washington," said Alec Brindle, the company chairman. "Unfortunately, due to competition from farmed salmon and weak overseas markets and domestic markets, we have suffered sustained, significant and accelerating losses."
Wards Cove was founded in 1928 in Ketchikan and grew from a single canning line to a network of plants in Southeast Alaska, Kodiak, Cook Inlet, Chignik and Bristol Bay. It employed thousands of people at the harvest peaks.
In their heyday, Wards Cove and other Alaska salmon processors were the dominant force in global markets, supplying five species of wild salmon to Asia, the U.S. and Europe.
But within the past decade, corporate farmers — who raise the fish in floating pens — have emerged as the biggest source of salmon. And the price competition from the farmed fish had what Brindle termed an "enormous impact" on the company's attempts to make a profit.
Brindle said canned salmon also has suffered from glutted markets and low prices.
"It's a systematic problem. The value of the fish has gone away," Brindle said.
In recent years, other Alaska processors have closed plants or gone out of business. But Wards Cove's pullout represents the biggest blow and reflects the broader economic stress in the industry, according to Gunnar Knapp, a University of Alaska-Anchorage professor who tracks the salmon business.
Last year the company operated five Alaska processing plants and employed several thousand people. The plants were fed by fishermen who work the coastal waters with a mix of beach-set nets, gill nets and seine nets.
"In many cases, fishermen tend to be loyal to their plants," Knapp said. "And there may well be fishermen that have sold to Wards Cove for generations."
But there also has been friction between fishermen and processors over harvest prices. Wards Cove problems are compounded by its involvement in a class-action antitrust suit filed by Bristol Bay fishermen. That case is scheduled to go to trial this winter, and the potential liability made it more difficult to sell the company outright, according to Brindle.
Still, he expects to find some buyers for the plants among other companies looking to expand. "They are in strategic locations, and have excellent operating personnel," Brindle said.
Hal Bernton: 206-464-2581 or firstname.lastname@example.org.