Tuesday, March 29, 2011

Does this SMOG deal smell right?

The board of the Alaska Industrial Development and Export Authority, a state lending agency, is scheduled to hear a pitch on Thursday from a company called SMOG LLC.

SMOG is an unappetizing acronym for the Sitka Meal, Oil and Gelatin Co.

The company wants to start a plant at Sitka to process fish waste into goods such as aquaculture and pet feed and human nutritional products.

And it wants the state agency, AIDEA, to finance and own the plant — a project that will cost more than $9 million, agency documents show.

Fish waste, of course, is a monumental headache for Alaska's seafood industry. In many cases, the only option is to grind up the fish heads, frames and guts and pipe the gurry offshore.

SMOG wants to dry and process the waste into marketable products.

It's not the first time fish waste has been processed into something usable, such as fishmeal.

But SMOG has a "new method" to better stabilize the waste, to dry it faster and to extract products higher in nutrients and thus more valuable, AIDEA says.

This newfangled Sitka plant has the support of seafood processors such as Icicle, Ocean Beauty and North Pacific Seafoods, who say they're under pressure from regulators such as the U.S. Environmental Protection Agency to find a better way to deal with fish offal.

But SMOG's technology apparently has never been tried on a commercial scale. AIDEA board members, at a meeting on March 2, had lots of questions regarding feasibility, and ultimately tabled a funding request until the next meeting.

SMOG initially seeks $450,000 from AIDEA for engineering, legal work and other steps necessary to bring the project back to the board for final consideration.

Under a proposed "user agreement," SMOG is obligated to reimburse AIDEA if either party decides to back out of the project.

"However, due to the fact that SMOG has limited financial capacity to reimburse AIDEA's expenditures, there is a substantial risk that if the project terminated, AIDEA will not be able to recover its investment," an agency memo says.

The AIDEA staff, however, seems sold on the project.

Read the agency memo and letters of support from processors here.

SMOG's organizer is Peter J. Stitzel of Seattle, state records show. Stitzel or other SMOG representatives are scheduled to give a presentation to the AIDEA board on Thursday.

Of course, AIDEA might well proceed with caution when it comes to "value-added" fishery projects.

The agency ended up with an embarrassing white elephant after a Anchorage venture called Alaska Seafood International went bust in 2003. AIDEA was landlord for the $50 million, state-owned processing plant, which today serves as a church.


Anonymous said...

Deckboss; You may want to check out the protein plant that is currently operating in Hoquiam, Washington. Ocean Protein LLC. Thanks for the updates--"Ol' Corkstacker"

Anonymous said...

Wesley - SMOG has a real chance to make a dirrenece in the industry.How much longer can everyone just pump waste down the pipe? We have to do something different and AIDEA is trying to help Alaska's largest private employer.

c.cook said...

I agree with Anom above, but not his or her spelling. Plus, what does this new fangled fish meal plant for $9 million that at least some in industry support have to do with the $50 million ASI plant that no one wanted? Isn't developing new ideas what AIDEA is supposed to do?

Umbriago said...

If AIDEA finances the $500K seed money, a bank will finance the balance, so AIDEA won't really have to do $9 Million+

Anonymous said...

way too much wasting practices, our visitors are still continuing to toss and throw what ever they think is not needed. They still never seem to get the idea that what they wasting away will soon bite them in the behind along with all of us throughout the world. from fossil fuels to our food and wild and renewable resources whether in the land or sea and air.

chumtroller said...

This sounds like a great idea. I had no idea it would cost this much to get a plant going but it would be wonderful to turn our fish waste into a salable product.

Anonymous said...

If it was such a good idea, then why does it need a state subsidy?

Why are the promoters not already operating a facility somewhere else with this "new" technology?

I'll bet these promoters try to sell the fish oil to themselves or friends, to skim off the profits.

In the end it is about priorities, is this new fangled technology owrht the risk of skipping the liot plant stage and installing a full blown facility in high priced Alaska, and hope that will work.

When the only way you can build a plant is to ask for taxpayer funds, and you have no private investment, and you have no management that has done this before;


This project would not ever, ever be funded by a banker, which is a red flag.

I'll bet they have lined up an impressive list of politicians which support this, and the politicians are not going to invest any of their personal money either.

Anonymous said...

I hope I understand here. Who is paying for the disposal now? Maybe they should ultimately finance SMOG. What will SMOG cost after that cost is deducted?

Anonymous said...

bravo 6:18, this stinks and with a closer look, seafood processors are probably lurking beneath the surface. they already enjoy cheap exports while paying little in taxes, and some have used state and fed money to build facilities.

Anonymous said...

Why is it the out of state companies reap the profits, and we get left with subsidizing a garbage business for their benefit?

Anonymous said...

because the people disbursing funds, like the stevens millions, are easily influenced. who is going to get fish for this plant, oh lets see....who is next door...and will there be a charge? ha ha

Anonymous said...

Sandro's plant got run out of Psg. What ever became of his operation?