ASG pulls the plug on planned food processing plant
The government’s plans to set up a multi-line food processing plant at the Tafuna Industrial Park “have come to a close”, after efforts by Philippines-based AVM Bernardo Engineering failed to attract investors, according to the Commerce Department.
AVM had proposed to invest $106 million to set up the processing plant with the first phase of the project being the juice line, and the second phase being fish-based processing — targeting the US market.
The project broke ground in January 2016 promising to provide up to 800 jobs once fully operational. But there have been setbacks, with the company seeking new investors after the initial one pulled out.
There have been many public inquiries on the status of this project, mainly because it was to provide new jobs, and DOC director Keniseli Lafaele told Samoa News last October that AVM had submitted a request for work permits for skilled workers to start the construction phase, and thee containers of materials had already arrived on island.
Sen. Nuanuaolefeagaiga Saoluaga Nua during the Senate session last Thursday questioned the status of the project, which was supposed to provide more jobs, but to date, nothing has come to fruition.
Lafaele is expected to be asked about the AVM project when he appears today for a Senate committee hearing on the shipyard, for which he is board chairman.
Yesterday afternoon, DOC released a statement announcing the end of the project lead by AVM owner Anthony Bernardo, who was tasked with identifying financing to construct the plant and a third-party operator to lease and operate the plant.
While Bernardo had identified a lead investor, which in part was what led to the ground breaking, the investor ultimately decided to instead focus on the growth and development of their current business operation in the Philippines and U.S.
“After the initial investor opted out, we gave Mr. Bernardo the opportunity to seek out other partners to support the project,” Lafaele said in the DOC news release.
Efforts included discussions with investors and operators in Japan, the Philippines, Singapore and California — but unfortunately Bernardo’s efforts were not successful, the DOC director said, adding that ASG expresses sincere gratitude to Bernardo for his efforts over the past 2 years and wishes him well in his future endeavors.
He explained that the business model envisioned by AVM is similar to that being used by local canneries and future development plans in the agribusiness industry.
According to DOC, American Samoa remains the gateway to the U.S. market for the region and sourcing raw materials from local sources and the region, whether it is fish or produce, and processing or adding value to the raw material in American Samoa makes the goods eligible for export into the U.S. market tax-free.
“We remain optimistic about this competitive advantage we have as a U.S. territory. We are further encouraged by some of the decisions coming out of DC with the new administration, specifically as it relates to trade,” Lafaele said.
“While we still have challenges to deal with like the minimum wage, access to the U.S. market tax-free remains a tremendous opportunity for the right entrepreneurs and project.” he said.
The government is moving forward with evaluating potential candidates for the previously assigned AVM lot at the Tafuna Industrial Park, Lafaele said, adding that “job creation and the production of goods remain a priority in our decision-making process.”
During a news conference last November, Gov. Lolo Matalasi Moliga revealed that he had informed Lafaele that after 2017, if nothing had materialized on the AVM project, then “we might as well forget it.”
He said the “bottom line” is that investors, who want to invest in American Samoa, “want a good return on their investment”.
“You cannot invest money here, with [only] very little or no return at all,” he said, adding that it's very difficult to convince investors to invest their money in American Samoa.
Lafaele told senators early this year that it’s “very difficult to attract investors to invest in American Samoa, due to — among other things — transportation, and international trade agreements between the US and other countries.”
Samoa News should point out that AVM was prominently mentioned in the American Samoa Economic Development Authority (ASEDA) Response to Investor Questions for FY 2016 Fourth Quarter, December 7, 2016 document.
Asked by investors: “Has there been any material change in the leading employers (private and public) in the Territory over the past year?” ASEDA notes not only the multi-food processing plant being spearheaded by AVM, but also that AVM was also “currently holding talks with Tri Marine on the possibility of continuing STP and co-operating it.” To date, neither has come to fruition.
ASEDA also lists AVM under the Private Sector Investment category.
Of note, under the PSI category, of the 5 projects listed as ‘planned private sector investment’, only revamping the Shipyard is happening right now.
AVM is no longer on the table, and the new Rainmaker Hotel and the Tramway are still a pipe dream. For the technology based industry project — ASEDA notes that Hawaiki cable is still being touted for 2018 arrival, and Tui Cable out of Samoa is still trying to resolve connectivity issues of its own, which means it is not available in American Samoa to date.
Puzzling though — the Shipyard revamp is not funded with private sector investment money, it is with federal funds — CIP funding to be exact, which is used for infrastructure projects.