Kake-Seafood-Plant-Business-Plan
Total Page：16
File Type：pdf, Size：1020Kb
February 2012 Business Plan Prepared for Haa Aani, LLC Photos courtesy Alaska Seafood Marketing Institute Prepared by In Association with RedPoint Associates Anchorage Kake Seafood Plant Business Plan Prepared for: Haa Aani, LLC PREPARED BY: Juneau Anchorage In Association With: RedPoint Associates Anchorage February 2012 Table of Contents Executive Summary .................................................................................................................. 1 Fish Supply ............................................................................................................................... 1 Equipment and Facility ............................................................................................................. 1 Labor and Employment ............................................................................................................ 2 Management ........................................................................................................................... 2 Marketing ................................................................................................................................ 2 Summary Assessment ............................................................................................................... 3 Financial Summary ................................................................................................................... 4 Feasibility Evaluation ................................................................................................................ 5 Summary of Preliminary Findings ............................................................................................. 6 Strategies for Fish Supply ......................................................................................................... 8 Key Assumptions ...................................................................................................................... 8 Paying up for District 11 Gillnet Fish ........................................................................................ 8 South Chatham Troll Fisheries .................................................................................................. 9 Seine Supply Strategy............................................................................................................... 9 Early, Late, and Overflow Agreements .................................................................................... 10 Hatchery Cost Recovery ......................................................................................................... 10 Icy Straight Troll Fishery ......................................................................................................... 11 Preliminary Evaluation of Other Major Factors ..................................................................... 12 Equipment and Facilities ........................................................................................................ 12 Labor Supply .......................................................................................................................... 12 Management ......................................................................................................................... 12 Marketing .............................................................................................................................. 14 Internal 2011 Season Summary .............................................................................................. 14 Business Plan ........................................................................................................................... 15 Plant Management and Labor ............................................................................................... 16 Plant Management ................................................................................................................. 16 Labor Requirements and Job Creation .................................................................................... 17 Equipment and Facility ........................................................................................................... 20 Repair and Maintenance Summary......................................................................................... 21 Salmon Market Conditions ..................................................................................................... 22 Financial Evaluation ................................................................................................................ 27 Summary ............................................................................................................................... 27 Key Factors and Assumptions ................................................................................................. 27 Pro-Forma Income Statement ................................................................................................ 29 Appendix: Contact List ........................................................................................................... 30 Executive Summary This report provides an initial Feasibility Evaluation, followed by a detailed Business Plan, for Rocky Pass Seafoods, a company owned jointly by Kake Tribal Corporation and Haa Aani, LLC. The company was formed in 2011 and operates out of the Kake Seafood Plant. In addition to the feasibility evaluation and detailed financial data, the report includes suggested strategies for maximizing the opportunity for financial success. These strategies address fish supply, labor, equipment and facility, management structure, and marketing. Also included is reference material on salmon market conditions. Fish Supply Fish supply is the single most important key to success. Onsite fleet management and quality tender service are especially critical to obtaining a sufficient fish supply. Most harvesters have well-established relationships with existing processors, and the following strategies are suggested to meet the challenge of developing an adequate fleet as well as obtaining supply from other processors and hatcheries. • Early and late agreements with larger plants and individual seine boat owners. • Recruiting trollers to target chum salmon in South Chatham Strait, and buying troll-caught chum salmon from the Icy Strait fishery near Hoonah. • Initially paying up for gillnet fish from District 11 (Taku River and Snettisham) in order to build a fleet in that area. • Negotiating with other regional plants to buy fish when their plants are in danger of exceeding capacity. • Selectively buying hatchery fish with no competitive market, such as king salmon from the Port Armstrong hatchery. Equipment and Facility A number of equipment issues and facility repairs will need to be addressed before the season if the plant is to operate efficiently and open on time in 2012. These items can be resolved with an estimated offseason repair and maintenance budget of $221,000 to $266,000. Onsite holding tanks need to be plumbed and hooked up to chilled seawater (CSW) or refrigerated seawater (RSW) system in order to improve the plant’s storage capacity of unprocessed fish. These improvements will improve product flow, maximize tender utility, and improve quality. • The plant has two processing lines, but only one was operational in 2011. Both lines need to be overhauled by company repair technicians and plumbing issues need to be resolved to ensure the machines work properly. Kake Seafood Plant Business Plan McDowell Group, Inc. • Page 1 • The refrigeration system is a safety hazard with a variety of fixable problems that currently drive up utility costs. Problems include ammonia leaks, incorrectly installed valves, corrosion, and worn out compressors making the refrigeration system dangerous and inefficient. • A roe dryer is essential for the plant to produce significant volumes of highly profitable ikura (chum salmon roe). A complete list of suggested R&M items and costs can be found in the Equipment and Facility section. Labor and Employment The Kake Seafood Plant could create 51 seasonal and year-around jobs in the seafood processing and commercial fishing sectors. This amounts to 18 full-time year-round equivalent jobs crucial to rural Southeast Alaska. In addition, the plant would improve the jobs of 40 to 65 skippers and crew working in the seine and gillnet fisheries. It is expected the plant will need to hire about 20 to 30 workers during the salmon season. Expected Staffing Needs for Kake Seafood Plant - 2012 Position Number of Workers Plant Manager 1 Fleet Manager and Dock Foreman 1 Quality Control and Administrative 2-3 Repair and Maintenance 1-2 Receiving Dock and Shipping (glazing/packing) 5-8 Processing Line and Other Floor Workers 10-16 Source: Study team estimates. Management Sealaska representative Dennis Gray proved to be a valuable managerial asset last year and has a firm grasp of the obstacles present in the current operation. The study team considers Mr. Gray an exceptionally competent manager for the plant in the short term if Sealaska is willing to put him in that position for at least the first two years of full-scale operation. Going forward, the operation could benefit from implementing a clear chain of command and creating policies for fleet management, quality control, and product handling. These should resolve issues relating to inconsistent quality, fleet relationships, and organizational consistency cited as significant issues in the initial 2011 operation. Marketing