OBI Seafoods has decided to close its Larsen Bay plant on Alaska’s Kodiak Island for the 2024 salmon season.
The Seattle, Washington, U.S.A.-based seafood company, formed in 2020 through a merger between Ocean Beauty Seafoods and Icicle Seafoods as a means to help OBI compete against rivals Trident Seafoods and Silver Bay Seafoods in Alaska, is a major player in the salmon fishery in the U.S. state of Alaska. But its footprint will get smaller in 2024 after its decision not to operate its Larsen Bay plant for the 2024 salmon season, and instead process salmon caught around Kodiak Island at its facility in Kodiak town.
“Capacity should not be an issue, with OBI’s Seward and Cordova facilities able to support Kodiak during the peak of the season in August,” the company said in a 31 January statement.
OBI Seafoods CEO John Hanrahan, who was promoted in November 2023 from his previous role as chief operating officer in charge of sales and marketing following the retirement of former CEO Mark Palmer, said the decision to not operate the Larsen Bay plant “is due to the poor pink salmon forecast issued by the Alaska Department of Fish and Game and tough market conditions for salmon products in general.”
“The Kodiak town plant operates year-round and has the ability to process salmon in a greater diversity of product forms, making it better suited to respond to salmon markets in 2024 as we navigate this challenging time for the industry,” Hanrahan said.
OBI Seafoods operates 10 processing plants throughout Alaska, producing fresh, frozen, and canned seafood. Hanrahan said his company “has every intention” to operate its Larsen Bay facility again in the 2025 salmon season, and through the 2024 season, will continue to operate it as a fleet-services provider.
“The Larsen Bay facility, ideally situated close to the island’s west side fishing grounds, will remain open with a small team fully dedicated to providing services to its fleet,” he said. “This team will include OBI’s fleet manager, office manager, chief engineer, port engineer, welder, general maintenance, fishermen’s services, laundry, and beach gang.”
The closure follows the mid-January move by Peter Pan Seafood to shutter its seafood processing facility in King Cove, Alaska, U.S.A. for the 2024 “A” pollock season, and the December 2023 announcement from Trident Seafoods it plans to sell off a significant portion of its assets in Alaska and to trim its workforce by 10 percent. Trident recently listed its Diamond NN South Naknek Cannery for sale for USD 1 million (EUR 921,000).
Larsen Mettler, the managing director of S2G Ventures’ oceans and seafood investments, who previously worked as chief financial officer of Alaska processor Silver Bay Seafoods and director of KeyBanc Capital Markets’ seafood investment banking portfolio, told SeafoodSource Alaska seafood processors got themselves into trouble in 2023 by holding onto their 2022 sockeye pack too long, not paying enough attention to quality, and not managing their balance sheets well.
Photo courtesy of OBI Seafoods