Diversification propel Alaska native corporations: billion dollar returns on important lessons.

• Author: Stricker, Julie
• Position: NATIVE BUSINESS

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Putting all your eggs in one basket is a time-honored way of courting disaster, literally or as a business strategy.

It's a lesson many Alaska Native corporations learned the hard way, but it's a lesson they learned very well. In the past decade alone, the 12 Alaska-based regional corporations and many of the village corporations have greatly diversified their business operations, spreading out over the globe and growing by double digits annually.

ALASKA NATIVE CORPORATIONS

In the process, Alaska Native corporations are offering more opportunities for shareholders in terms of education, jobs and training as well as increased dividends. The companies have become a potent economic force in Alaska, bringing millions of dollars in revenue back to the state.

"I don't think there's any question that the ANCs (Alaska Native corporations) are business powerhouses in Alaska," says Jim Jager, director of corporate communications for Cook Inlet Region Inc. "They've reversed the Alaska business model."

Traditionally, outside entities have come to Alaska to harvest its resources--fur, gold, timber, fish, oil--and take the profits Outside. While many of the Alaska Native corporations have stakes in natural resource development in Alaska, it's their investments around the globe in areas as diverse as construction, tourism, oil field services, alternative energy and contracting that are driving millions in dollars in profits back to Alaska.

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Thirty years ago, such a scenario was all but clear.

ANCSA

Under the 1971 Alaska Native Claims Settlement Act, 12 Alaska-based regional corporations and about 200 village corporations divided nearly 44 million acres of land and nearly $963 million to settle aboriginal land claims, which would enable the construction of the trans-Alaska oil pipeline.

The corporations were tasked with improving the economic and social well-being of their shareholders. But many lacked experienced business leaders and some corporations floundered in the first decades, with two filing for bankruptcy. In part, they struggled because of an over-emphasis on natural resource development, which tanked in the mid-1980s.

By the turn of the century, however, the companies had matured, broadened their investments and began generating headlines for their success in a number of ventures.

CIRI

One of CIRI's investments a decade ago showed the rest of the state that the Alaska Native corporations had come of age. A lucrative telecom deal in 2000 paid off in a huge way, resulting in windfall dividend pay-outs that totaled $65,000 for the average shareholder. "That...