UniSea: first-class seafood.

In business, timing is everything. According to Dick Pace, president of UniSea Inc., good timing, the ability to adapt to changing conditions, and a little luck have helped this Dutch Harbor-based firm become one of the largest seafood processing companies in Alaska.

From its beginning in 1974 in the basement office of Pace's Woodinville, Wash., home, UniSea has grown to include two processing plants and two hotels in Dutch Harbor, a secondary processing plant and cold storage warehouse in Redmond, Wash., a secondary processing plant in Bellingham, Wash., and a crab processing barge anchored in St. Paul in the Pribilof Islands. UniSea also owns a 25 percent interest in Dutch Harbor Seafoods, which operates the mobile processors Galaxy and Omnisea.

Last year, nearly 144,000 metric tons of pollock, crab, cod, black cod, halibut and herring crossed the docks at UniSea, leading to the company's top ranking in terms of tonnage among Alaska seafood processors.

Despite the high volume processed, other factors -- low surimi prices, shortened pollock seasons and slashed opilio crab quotas -- have hit UniSea and other processors hard.

"This may be the beginning of the most difficult era ever" for the fishing industry in Alaska, Pace says.

"Before we had resource failures. Now we have not only a diminishing resource -- in terms of opilio, which is an important part of our business -- but we also have a severely over-capitalized industry," he says.

As a result, Pace is seeking to reduce costs to an absolute minimum, while at the same time working to increase production.

"I think that there are some who are participating in the shoreside industry that won't be here in a few years if things don't change," Pace says.

But he is confident that UniSea, having weathered the stormy seas of the Alaska fishing industry for the past 20 years, will survive this latest downturn.

UniSea is a wholly-owned subsidiary of one of Japan's largest fishing companies, Nippon Suisan Kaisha Ltd. Decisions on capital expenditures are made by the Nippon Suisan's board of directors, while management decisions are made by Pace -- a relationship he says has worked well.

"And quite frankly, in the last few years -- which have been pretty tough -- I feel fortunate that I have a well-financed, large organization that we are working for and with," he adds.

The story of UniSea is also the story of Dick Pace, one of the company's founders and president since its inception.

Growth of an Empire

Pace began his career in fisheries as a seafood inspector for the Food and Drug Administration. Upon graduating from college in Washington state, he went to work in the fish markets of lower Manhattan.

He "managed to last nearly three years" before returning to Washington and applying for a job in Alaska. Pace soon found himself on an airplane going to Fairbanks to teach Native village sanitation at the university. In 1959, he was assigned as the first health officer to Kodiak.

He spent the next two years doing health surveys in rural villages from Kodiak to the Aleutian Islands.

During these travels, Pace met Lowell Wakefield, the father of the king crab industry, and went to work for him in 1960.

At that time, Pace says he knew nothing about king crab and very little about the seafood industry in general. But he quickly gained experience, working as a director of quality control at Port Wakefield for five years and then in Seldovia as manager of the Wakefield plant there.

"By the late '60s, it was obvious that the crab was moving west," Pace says. So he left Wakefield and went to work for Vita Food Productions in Dutch Harbor.

Vita Foods had a crab-processing barge, the Vita, anchored near the present site on UniSea's G-2 plant, and Pace became the general manager in charge of crab operations.

It was there that he met Vita owners and managers Aaron and Bob Gilman. Aaron Gilman was particularly interested in the secondary processing of surimi. At that time, Nippon Suisan was one of the largest surimi producers in the world.

The largest single crab producer in the world, Nippon Suisan matched Pace's desire "to start this crab company." Nippon Suisan was also very interested in gaining a foothold in the Bering Sea and Alaska. Japanese ships had been fishing the Bering Sea for decades, but in the mid-70s changes were taking place that would eventually bring an end to all foreign fishing in Alaska waters.

Officials at Nippon Suisan "were visionary enough to realize that their time was limited," Pace says.

The Gilmans left Vita, joined forces with Pace, and provided the financial expertise to put Universal Seafoods together. In the beginning, the company was 50.01 percent American owned and 49.99 percent Japanese owned.

"The Gilmans provided the land, I guaranteed delivery of fishing boats, and the Japanese provided the actual cash," Pace recalls.

Waves of Growth

In 1974, Universal purchased a World War II liberty ship and converted it into a crab processing barge. It was christened the UniSea and began processing in Dutch Harbor the following year.

"At that time it was rather a gamble," Pace says. "Because although there were crab in the Bering Sea, there were not many crab being found anywhere else, and there was no fleet as yet developed to fish the Bering Sea.

"We hit this thing at absolutely the low ebb. Everybody had lost faith in crab, there was no future, and we got in just at the bottom end of the cycle for the development of the Bering Sea," he adds.

What followed was probably the biggest boom in the history of the fishing industry. Between 1975 and 1980, the red King crab quota in Bristol Bay rapidly rose from about 45 million pounds to 128 million pounds.

Business boomed, and Universal began expanding its operations both in Dutch Harbor and Washington state. During this time, Dutch Harbor Seafoods Ltd. was also formed with 25 percent Nippon Suisan ownership and 75 percent American ownership. In 1975 Dutch Harbor Seafoods acquired a surplus U.S. Coast Guard buoy tender and converted in into a mobile crab processor and freighter.

The following year, construction was completed on a 150,000-square-foot cold storage warehouse and secondary processing plant in Redmond, Wash. And in 1978 Universal bought Vita Food Products, the barge Vita in Dutch Harbor, and Vita Foods' crab processing area in Washington state. That same year, Universal also built the UniSea Inn in Dutch Harbor, a 10-room hotel with a restaurant and lounge.

Surimi Sales Soar

After the peak year of 1980, the king crab suddenly disappeared. In 1982, crabbers found only 33 million pounds; the next year, there was no commercial fishery.

The UniSea Inn and the Redmond cold storage were the two activities that kept the company afloat during the crash, Pace says.

"During the worst of the king crab crash, the production arm of UniSea ended up with only 10 employees," says Pete Maloney, director of UniSea production in Dutch Harbor.

In 1985, the company changed course and ventured into surimi production. At this point, the Gilmans and Pace decided to sell their interests to Nippon Suisan, which then became 100 percent owner of the company. Universal was renamed UniSea Inc., and the surimi production arm was christened Great Land Seafoods.

In 1985 UniSea purchased the Pacific Pearl plant in Dutch Harbor and spent $10 million converting it into a surimi processing plant, G-1. The following year, the new G-1 plant was ready for production, but again Pace ran into problems finding a fleet to deliver to the plant.

In those days, most of the pollock trawlers were still delivering at sea to the foreign joint-venture processors. The money was good in the j-vs and fisherman were reluctant to deliver onshore.

"The fishermen, like all people, were resistant to change ... and they thought the j-vs would never end," Pace says.

Pace went to Jeff Hendricks, "one of the more progressive fellows in the fishery in terms of equipment and in terms of willingness to analyze and study the problem." Hendricks was then general manager of a small fishing company and had three larger trawlers that were delivering pollock in Kodiak.

In 1988, with financial help from UniSea, Hendricks had two former mud boats converted into the pollock trawlers auriga and Aurora.

With these added capabilities, UniSea was soon able to produce surimi 10 months a year.

Market Boom and Bust 

By the late 1980s, surimi prices in Japan were high, domestic consumption was on the increase, and plans were made to further expand the company. "Everything was just great," Pace says, "We were basking in the success and pride of ownership."

Over the next few years, $60 million to $70 million was spent at the Dutch Harbor site to build a new and larger surimi plant, G-2, a new dock, a 15.6-megawatt power plant, and a new galley and bunkhouse buildings for employees.

At the same time, because the UniSea Inn was turning away up to 100 people a night, the decision was made to build a second and larger hotel.

"When we finally made the decision to spend this huge amount of money," Pace recalls, "the surimi market was at an all-time high, fish were large, we had large quantities of roe, we had made more money than we had ever made before ... None of us really recognized how many factory trawlers were in the pipeline."

In September 1990, the G-2 plant opened. By 1992, UniSea was the largest producer of surimi in the United States and possibly the world. Between 1990 and 1993, the Redmond facility expanded and Dutch Harbor Seafoods acquired a second mobile processor.

In May 1993, UniSea opened the 110-room Grand Aleutian Hotel, featuring two restaurants, two lounges, a gift shop and 2,800 square feet of meeting space, in Dutch Harbor. That year, UniSea employment in Dutch Harbor hit a high of 1,100.

Since then, UniSea has cut its workforce by 30 percent and is looking at further cost-cutting measures.

"We are in hard times now. We are just going to have to adjust accordingly," says Pace.

As far as the industry as a whole, he says, "It is difficult to determine what is best ... But we must not let the pressures we as an industry have to survive economically allow us to over-exploit and destroy that resource.

"That has got to be the overriding objective of all of us," he adds. "Bottomfish is our last great hope. If we destroy the resource, we are truly doomed this time. If government won't meddle too much ... I think laissez faire economics works absolutely all the time. We may not like the results sometimes, but it absolutely will work."