Fono: Tri-Marine revenue won't be realized until 2014
Senate Budget and Appropriations Committee chairman Sen. Lemanu Peleti Mauga says that any new revenue for the government from Samoa Tuna Processors Inc., will not be realized until fiscal year 2014, based on testimony from a company official.
In line with the Fono’s Legislative Financial Office recommendation to question sources of revenue of the government’s FY 2012 budget, testimony came from Samoa Tuna Processors manager of human resources and government affairs, Alfonso Pete Galeai, who was called yesterday by the committee, which has started a review of the four main points of government revenue for the fiscal year 2013 budget.
At the start of the hearing, Lemanu read out loud a portion of the governor’s cover letter to the Fono, accompanied by the FY 2013 budget book, which states that the local canneries plan to increase their workforce next year to meet increased demand. Lemanu says the government is expected to collect additional taxes due to the hike in cannery workforce.
Galeai told the committee that he could not comment on the government’s projections but Bellevue, Wash., based Tri Marine International, owner of Samoa Tuna Processors, has reaffirmed its commitment to rebuild and operate the old COS Samoa Packing facility.
He said hiring and full operations at the facility is based on the completion of three to four ongoing construction projects and the “market demand”.
At this point, the cannery has a workforce of 45 people, he said.
He outlined some of the projects currently in operation, which is the fresh fish export via air freight and frozen fish export via ocean transportation. Among operations underway is sashimi grade fish, which is received fresh, graded, packed and shipped by air to premium markets in Japan and the U.S.
Galeai also provided updates about on-going construction projects, which Samoa News reported last month based on a letter from Tri Marine president and chief executive officer Renato Curto to Congressman Faleomavaega Eni.
The company is now operating one 2,000 ton cold storage facility while the other cold storage facility is being demolished and a new 5,000 ton capacity, energy efficient cold storage is under construction to be completed in February next year.
Another construction project is the facility for processing and packing tuna into cans and pouches, and this is expected to be completed in the second half of next year.
Galeai said the company has applied for a land use permit for the reconstruction of the wharf next to the plant, and the environmental impact study is completed, which is currently being reviewed by the ASG Project Notification Review Service board. From there, it goes to the U.S Army Corps of Engineers — which is expected to be the “last hurdle” and the company is hopeful that the federal agency will give approval later this year.
He said the company is looking at a workforce of between 1,200 and 1,500 once all operations are in full swing and this will mean “significant hiring” on the company’s part. However, he emphasized more than once to the committee that this workforce estimate, as well as the company’s full operation, depends on the construction projects being completed, as well as market demand.
Responding to an almost the identical question from the committee, Galeai reiterated the company is looking at the second half of the year 2013 to be in full operation, and believes this data has been communicated by top Tri Marine officials to the Governor’s Office.
Sen. Alo Dr. Paul Stevenson noted that — based on this information from Galeai — any major revenue generated from the cannery is not going to happen until fiscal year 2014. He said he believes that local revenues for FY 2013 are “over projected”.
(Samoa News notes that the second half of the year 2013, is around July, which is the start of the 2013 fourth quarter.)
Responding to another committee question, Galeai said the company does have a tax exemption from ASG. While he didn’t have the actual dollar amount of the company’s investment in this local operation, Galeai said that its in the tens of millions of dollars and this is a “major commitment”.
Once the witness left the chamber, the committee held a brief discussion where Lemanu reminded his colleagues about Galeai’s testimony that it's the second half of the year 2013 when they will see any full operation at the cannery.
Therefore, he said, any major tax revenues collected by ASG in FY 2013 on Samoa Tuna Processors will not be fully realized until fiscal year 2014. He asked the committee to keep Galeai’s testimony in mind when the Fono starts budget hearings next week — when it comes to the issue of ASG revenues.
Today, the committee will hear from ASG Shipyard Services Authority and tomorrow from the ASG Tax Office, but it's unclear if the Senate will seek any StarKist Samoa testimonies on record.