StarKist CEO applauds the governor’s support

But does not allay fears of their leaving the territory in the near future
fili@samoanews.com

StarKist Co. president and chief executive officer, Andrew Choe has applauded Gov. Lolo Matalasi Moliga’s support of the canneries as well as his efforts to bring attention to challenges faced by the canneries in American Samoa, which impact the local economy.

However, Choe, in his letter, noted the global nature of the tuna business, where pennies matter and that these challenges continue to erode American Samoa’s main advantages, adding to the burden of StarKist’s operation costs in the territory.

In his address to the joint session of the Fono on Monday, the governor said the Administration’s five-year revenue generating plan assumes that StarKist cannery “might leave the territory in five years”, however, if the cannery leaves sooner, a financial crisis will occur and he explained the reasons why.

For example, the US Congress has taken away the federal 30(A) Tax Credit after the termination of the IRC Section 936 Tax Incentive. The territories of Puerto Rico and Virgin Islands are facing the financial effects of this Congressional action, the governor said. (See Samoa News July 11 edition for details).

In his letter yesterday, Choe noted the governor’s Monday address to the Fono and thanked Lolo “for your leadership and your hard work on behalf of the canneries” in the territory.

Choe wrote, “These are challenging times and we appreciate your leadership and ongoing attention to strengthen the economic foundation of American Samoa,” and noted that StarKist appreciates the governor’s support of the federal American Samoa Economic Development Credit, federal tax credit Section 30(A) and for addressing a number of pressing issues including the minimum wage and fishing access in American Samoa.

“30(A) is a significant factor for our company which allows StarKist to maintain a competitive operation in American Samoa,” he explained. “Its dissolution would present a serious hurdle to our long-term growth and success in American Samoa.”

He said StarKist has seen other companies come and unfortunately, have seen them leave. Choe said this is a reality of the many challenges that were detailed in the governor’s address to the Fono.

“The economic success of American Samoa is important to me and to the StarKist family,” Choe tells the governor. “It is imperative that we stand together to confront the challenges that threaten American Samoa."

Choe reiterated that the tuna industry is a “globally competitive, largely commoditized business where profit and loss are determined by pennies.”

He noted that American Samoa has historically been an attractive location from which tuna products could be manufactured as a result of a reliable and high quality supply of whole fish directly delivered to the canneries.

“These main advantages are being eroded, and that is adding additional burden and cost to our operation,” said Choe. “These are critical matters that are having a significant impact on our business.”

“We applaud your efforts to bring attention to the issues that are facing the canneries, American Samoa and its economy,” he wrote, adding that StarKist appreciates the opportunity to partner with the governor and the local leadership “to ensure that American Samoa is an economically attractive place for StarKist and other companies to sustain a successful business.”

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