Samoan tuna plants hit hard


POSTED: Saturday, October 10, 2009

PAGO PAGO, American Samoa » The tsunami that killed nearly 200 people in the Samoas also dealt a vicious blow to the already sputtering engine of the American Samoa economy: tuna canneries.

The U.S. territory has long been home to Chicken of the Sea and StarKist plants that make more than half the canned tuna consumed in the U.S., filling American grocery store shelves with millions of cylindrical cans used for tuna sandwiches and salads.

Even before 10-foot-high tsunamis roared ashore Sept. 29, the territory had been bracing for the closure of the Chicken of the Sea facility, which meant nearly 2,000 people would lose their jobs. Thanks to the tsunamis, the end effectively came a day earlier than scheduled.

The cannery run by StarKist Co. lost power in the tsunami and isn't expected to return to full production for another month or so.

The canneries directly and indirectly make up about 80 percent of all economic activity in American Samoa, a remote Pacific island territory of 65,000 people about a five-hour plane ride from Hawaii.

“;It's like we've been hit by an earthquake, a tsunami and a cyclone all at once,”; said Gov. Togiola Tulafono, who added that the shutdowns will ripple through the economy as newly unemployed and idle workers won't have as much money to spend.

“;When the cannery shuts down, a whole lot of other things shut down. We need to get that company back up and working.”;

The industry was in trouble even before the disaster because of a 2007 federal law mandating that the same minimum wage laws that apply to the 50 states be enforced in the territory. The law is gradually hiking the minimum wage for American Samoa 50 cents a year until it reaches $7.25—the same standard as the rest of the country.

The law has boosted labor costs for the canneries by more than 30 percent, even as they compete with canneries in countries like Thailand and Vietnam where the hourly wage is less than $1.

Cannery workers in the territory now earn an average of $5.11 an hour.

Chicken of the Sea chose to shut down and move its canning to a leaner facility in Georgia.

StarKist laid off about 350 hourly and salaried workers. But it has chosen to stay and lobby for a new bill now before Congress that would provide U.S. fishing fleets with incentives to sell their fish in American Samoa. The bill would also pay subsidies to processors, like StarKist, in the U.S. territory.

“;It allows American Samoa to be globally competitive again,”; said Don Binotto, president of StarKist Co.

“;If that is passed, frankly, we see American Samoa as a place where we can continue to do business long term.”;

The two plants sit right next to each other in long, white rectangular buildings along a narrow waterfront in Pago Pago Harbor's small industrial zone.

The tsunamis largely spared both plants even though they destroyed dozens of buildings across the harbor. They did, however, drown the power plant that feeds electricity to StarKist, knocking the plant out of service.

To cope, StarKist is shipping 10 generators to Pago Pago from Los Angeles that will supply the plant with electricity until the local power plant is rebuilt. The plant should be fully operational by the sixth or seventh week after the tsunami, said Binotto, who flew into American Samoa a few days after the tsunami to assess the damage.

In the meantime, StarKist is storing 4,000 tons, or $13 million worth, of tuna in freezers run on generators.

StarKist said the disruption to production won't affect the supply of tuna on store shelves. The company has an eight-week supply already in the U.S. and a few more weeks' worth currently in containers heading for the U.S.

The governor proposed last month that the territorial government buy Chicken of the Sea's COS Samoa Packing plant to keep it open. A committee of territorial lawmakers was due to hold a hearing on the measure the day the tsunami hit, but had to postpone their deliberations because of the disaster. Chicken of the Sea says it plans to use Samoa Packing as a cold storage facility for fish caught in the Pacific.

On a recent morning, maintenance workers dismantling the tuna packing and sealing machines were among the few remaining employees on site. They were preparing the equipment so it can be shipped to Chicken of the Sea's new packing plant in Lyons, Ga.

“;We're still working for two or three more weeks. We're moving all the stuff,”; said Fotu Matola, 38, as he took a break with co-workers in front of a convenience store across the street from the plant.

“;But after that, we're looking for another job—and earn some money for the kids and family,”; added Matola, who has worked at the plant for 14 years.