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.
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