### 1 Project No.: 0172.08.030.033

Project Name: Alaska Seafoo d

TELEPHONE CALL RECORD Date: 12-16-2010 Time: 1 – 2 PM EST

Call placed by: Betsy Bicknell, ERG Contact Name: Sandro Lane

Company Name: Alaska Protein Recovery

Phone No.: 907-463-3447

GENERAL SUBJECT : ERG draft report of August 13, 3010 si te visit to Alaska Protei n Recovery, Ketchikan, AK



### TOPICS DISCUSSED AND ACTION TAKEN

After an exchange of emails about the draft site visit re port, Mr. Lane and I agreed to talk by telephone. Mr. Lane provided some corrections to the report. We agreed that cer tain process details were not necessary and I agreed to omit them from the report. Because of the relationship between Alaska Protein Recovery (A PR) and Trident Seafoods, we agreed that Mr. Lane would share the revised draft report with Joe Plesha, Trident Chief Legal Officer, to give Trident the opportunity to make CBI claims for information about its opera tions that is included in the APR site visit report.

Mr. Lane stressed that Trident is running the Cordova bypro ducts recovery operation using APR’s proprietary process. I asked how the new byproduct plant in Cordova was sized. He explained that it was based on the capacity of the Trident cannery, 1.5 million pounds of raw fish per day.

Mr. Lane mentioned that when the Cordova recovery plant first went on line, it caused stress on the community electric power system. When Trident started up the plant, the su rge in power demand produced some “melt downs” in the community power system. The power company has put Trident on a rigid start-up routine so they will not overtax the system. Mr. Lane noted that the APR barge that operates in Ketchikan can be self-sufficient because it has its own electric power generator. They can opera te even without shore power.

Trident has contracted with APR for marketing the salmon oil. APR is also helping with the hydrolysate, but on an informal (non-contractual) basis. Mr. Lane noted that the hydrolysate Trident produced in 2010 did not meet APR’s specifications but their 2011 production should. He also noted that the oil Trident produced in 2009 could not be certified as food grade because they did not have sufficient documentation that the waste used to prod uce the oil had been managed properly (not touched the floor and properly chilled).

Mr. Lane also explained that in additio n to the type of products produced, an a dvantage of the APR process compared to a conventional fish rendering plant is low odor. The high heat required for drying the meal produces a tremendous odor and odor control is costly.

Mr. Lane gave his permission for ERG to include photos and the process diagram from the APR website in the final report. Mr. Lane noted that he plans to simplify the process diagram in the near future, but he has no problem with ERG including the current version in the report.

During the August site visit Mr. Lane mentioned that APR might add additional reactor tanks to the equipment on the barge Alaska Venturer. He confirmed that APR was installing the tanks, so the maximum capacity will be 300 to 350 MT of fish waste per day. He explained that APR was installi ng the additional capacity in anticipation of the 2011 salmon season. NOAA predicts that the 2011 salmon season in SE Alaska will be 55-60 million pink salmon, compared to 18 – 30 million in a typical season. In addition to capacity, the additional digesters will a llow APR to adjust the reactor time and provide more flexibility in processing.

### 2 I asked Mr. Lane the minimum amount of fish waste that APR could process and he reported 15 MT of fish waste per day. He noted that managing the waste processing plants is cha llenging because they are designed to operate constantly but that is not how fish come in. I asked Mr. Lane if APR had made any progress on finding a market for the salmon bones. Mr. Lane said they had not and that the bones account for 3-5% of the fish waste (on a dry weight basis).

I explained to Mr. Lane that I had some literature from GE A Westfalia about their package plant for production of food grade fish oil. We noted that this plant has a heater, decante r, and oil polishing centrifuge, but it does nothing with the deoiled fish pulp. Mr. Lane stated that he had thought l ong and hard about an oil-only process and not a hydrolysate operation. He stated that there was at least one oil recovery operation he knew of in Naknek which discharged the protein after oil extraction from the waste. Mr. Lane expressed surprise that this type of waste material could be discharged into

the environment.