American Samoa’s Chamber of Commerce says small businesses are starting to suffer from the closure of the Chicken of the Sea Samoa Packing plant. About 2,000 people lost their jobs when the tuna cannery closed its doors last September.
American Samoa’s Governor, Togiola Tulafono, is currently in Thailand meeting with the cannery’s owners, Thai Union, to ask for more time to find the money to purchase the cannery’s assets. Until now his attempts to get the US$5 million needed to buy the plant have met with resistance from the country’s legislators.
Presenter: Stephanie March
Speaker: Joey Cummings, American Samoa Chamber of Commerce chairman; Herman Gebauer, general manager of Samoa Packing until 2006; Laolagi Savali Vaeao, Vice Speaker of the American Samoan legislature
MARCH: More than 2,000 people lost their jobs when the Chicken of the Sea Samoa packing cannery closed last September. Joey Cummings from the American Samoa Chamber of Commerce says the closure is now affecting small businesses.
CUMMINGS: Particularly in the area of the islands where the canneries are located, there are stores closing in that section of the island. Particularly the ‘mom and pop’ shops that sell just the daily grocery goods and sodas and that sort of thing.
MARCH: Most of the workers who lost their jobs had come from neighbouring Western Samoa. Herman Gebauer was the general manager of Samoa Packing for ten years until 2006. He says it’s those migrant workers that are now finding it tough.
GEBAUER: I have people living next to me who are scrambling to look for jobs but they can’t with the immigration status they have. There is a lot of them here who have had kids on the island and it’s another problem for them. If they go back it is going to be tough with the immigration status for their kids in Western Samoa.
MARCH: Before the closure last September, American Samoa’s Governor, Togiola Tulafono, tried to persuade the Chicken of the Sea to reconsider its decision. Now he wants the government to buy the cannery’s assets. The country’s legislature rejected a a US$5 million appropriations bill to acquire the remaining assets. Those opposed to the bill questioned whether the money could be better spent in other areas like health and education. Some legislators also warned against the territory taking on a business that would be competing with private enterprise.
Laolagi Savali Vaeao is the Vice Speaker of the American Samoan legislature:
SAVALI: My concern is that he doesn’t really have all the stuff that he needs to provide the legislature with, like a business plan and so forth. Purchasing the assets is one thing, but we don’t know. He might come back and ask for more for the operation. The cost of operation, we did some research, it’s a million dollars a day.
MARCH; Joey Cummings chairman of the Chamber of Commerce says the best case scenario is for the government to buy the assets, but leave the operation to a private company.
CUMMINGS: There is concern that the government will want to buy it and run it and this can be worrisome, because many people point out the fact that the government has had a less than sterling track record of running businesses or agencies that should be privately run, i.e. a hotel.
MARCH: The Samoa packing operation shutdown because the owner said it was no longer financially viable. It’s thought the closure was largely due to sharp increases in the minimum wage. But former Samoa Packing general manager, Herman Gebauer, believes the business could be revived and turn a profit for the new owners.
GEBAUER: It is a momentous task, but given the right circumstances, it’s a viable business. But I don’t think they can do it like the normal tuna canner would be, like marketing a product and distribution. They won’t be able to do it, but if they do other processes, mostly private label go backing for the big tuna companies, I think it is viable. It’s feasible.
MARCH: Thai Union which owns the Chicken of the Sea plant was unable to speak to Radio Australia about its plans for the cannery assets. In its investor notes for the 2009 third quarter, Thai Union said the American Samoa plant would be sold if the right buyer is identified. The company will keep a cold storage facility on the island to collect fish from the area to be sent to plants in Thailand for processing. Thai Union started a new plant in Georgia in the United States in October last year to takeover most of the American Samoan cannery operations.
