Hundreds of jobs lost as Tri Marine explains the failure of its plant in American Samoa

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samipareti

By Samisoni Pareti, Pacific Media@WCPFC13

One of the South Pacific’s largest tuna canneries is closing shop as Pacific fisheries managers wrangle over tuna fishing controls with the world’s leading fishing nations in Fiji this week.
Eight hundred out of the 900 employees of Samoa Tuna Processors in American Samoa face a bleak Christmas now that the company has confirmed that 16 December will be it last day of production.
At this stage the future of the plant looks bleak.
Samoa Tuna is owned by global conglomerate Tri Marine, and Joe Hamby, CEO of Tri Marine’s The Tuna Store, says a combination of unforeseen factors made production of its Pago Pago cannery unviable.
“This is a large-scale cannery. We can’t just do limited production. We’ve invested a lot of money there, we have to amortise that investment with a lot of production. To have a lot of production we need to have a lot of customers. Unfortunately not all the customers appreciate the value that’s implied when you have an island based supply chain,” explains Hamby to Pacific journalists in Nadi, Fiji where he is attending the 13th session of the Western and Central Pacific Fisheries Commission (WCPFC).
“What does it take to process tuna on the islands? You need labour, and labour is available, but it is not cheap. From the time we decided to invest in American Samoa, the minimum wage went up. That’s the result of a political decision, beyond our control.
“You’ll need fish. You’ve seen the Obama administration deciding to create some national marine monuments under the Antiquities Act, which by signing, he closed a number of our traditional fishing grounds. So we have less areas to fish, and when there’s less areas to fish, boats are forced into other areas where they have to pay a lot of money to go fishing and it became uneconomical for some boats, and .. the supply of raw materials to American Samoa was impacted.
“The other thing you need in any tuna operation is a tuna plant with all the energy to process the tuna and guess what, in the islands ..energy is super expensive. So when a customer comes to you and says, ‘I want some tuna and I’d love if it comes from American Samoa but can you give it at this price?’ I will ask ‘where did you get that price from?’ ‘Well from some place with really cheap labour, really cheap energy, huge volumes of production, very low overhead costs,’ and we can’t just compete with that.”

Hamby would not comment on whether Tri Marine is in talks with potential buyers for their US$70 million plant in Pago Pago.
He said Tri Marine’s American Samoa plant cannery could not supply tuna Tri Marine’s market in Australian because the current supplier is based in Thailand, where it enjoys duty considerations in the Australian market.
Tri Marine also runs a large cannery in Noro, Solomon Islands, and this operation supplies the Pacific and the European markets.
The Tri Marine executive said the conglomerate hasn’t made any approaches to the administration of the American President-elect Donald Trump.
“We’ll have meetings after the handover in January. We will continue to advocate for American Samoa. We will continue to mention that American Samoa is a fragile economy that is dependent on the tuna to the extent that free trade agreements that erode American Samoa’s value of its duty exemptions, to the extent that fishing grounds are limited that has left less tuna coming to the territory, to the extent that minimum wage goes higher still, to the extent that nothing can be done with the energy cost. These are things that will be working against American Samoa.

“We have been trying to sensitize the Obama administration of all of these things but their priorities have obviously been elsewhere. We’re disappointed in that. We will continue to work hand in hand with Governor Moliga’s administration to improve the prospects of the cannery in American Samoa.”

Author: samipareti

Former editor of Islands Business now a writer and media/communication consultant in Suva, Fiji.