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Starkist tuna cannery. (Photo: Stock File)

Starkist assesses shifting part of its production to Senegal

  (AMERICAN SAMOA, 11/4/2015)

Cannery firm Starkist Samoa has decided to stop hiring staff and is considering the possibility of shifting production offshore due to the financial issues it faces, which have forced the firm to reduce investments.

According to the firm’s representatives, one of the main issues affecting the business is the mandatory minimum wage increase of 40 cents an hour, representing a 57 per cent increase in the wages paid in American Samoa since 2007, Radio New Zealand reported.

The firm has ensures it is undergoing difficulty having access to fishing grounds and disruptions to the supply of direct delivered fish have forced the cannery to procure fish from distant water reefer ships, further increasing costs in the territory.

Adding to the costs is that the recently completed Trans Pacific Partnership multilateral trade agreement will soon open significant new competitive pressures from countries such as Vietnam.

Starkist argues that its competitiveness has also been affected by fishing restrictions on the high seas and in the US economic exclusive zone. Therefore, the company calls on the US National Marine Fisheries Service (NMFS) to recognize the territory’s unique nature as a small and developing economy.

“The competitive position of American Samoa continues to be eroded day by day, and the decision by NMFS to forgo an emergency rulemaking for our purse seine fleet is another example of a lack of urgency for how difficult it truly is to operate a business here,” Starkist’s representatives argued.

In statements to the media, the firm’s CEO and president, Andrew Choe, explained they are now having to evaluate and look at alternative locations to shift some of the production that is now carried out at the American Samoa plant to Senegal.

The cannery is also looking at packaging facilities in the US mainland similar to those used by its competition.

Choe travelled to Washington DC last week to advise leaders and lawmakers about the difficult future of its long term operations in American Samoa.

The firm’s CEO summed up that because of the uncertainty of manufacturing costs in American Samoa, for example wage costs, energy costs, tax policy uncertainty and concerns about the volatility and supply of raw materials, and especially given what has happened in just the last six months, they would be "irresponsible" if they did not begun this process.

The cannery executive explained it’s extremely difficult for American Samoa to compete with other manufacturing locations where labor costs and other expenses are substantially lower.

Choe pointed out that StarKist’s competition is doing a bulk of its production in countries like China and Thailand and reaps the financial benefits of cheap labor and subsidized costs.

Related article:

Starkist warns it might close its cannery due to lack of tuna 


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