Bumble Bee Seeking Tariff Concessions At Levuka Port

PAFCO employs more than 1000 local staff, making it a vital part of Ovalau’s small economy. Bumble Bee Foods, Pacific Fishing Company Limited’s (PAFCO) larg­est customer, says a tariff conces­sion
27 Apr 2018 12:07
Bumble Bee Seeking Tariff Concessions At Levuka Port
 From left: Assistant Minister Infrastructure and Transport Vijay Nath, Bumble Bee Foods general manager operations Brett Carter  Assistant Minister for Local Govern­ment, Housing and Environment Lorna Eden and opposition members Viliame Gavoka and Prem Singh after the Standing Committee on Economic Affairs met on April 26, 2018 Photo: Sheldon Chanel

PAFCO employs more than 1000 local staff, making it a vital part of Ovalau’s small economy.

Bumble Bee Foods, Pacific Fishing Company Limited’s (PAFCO) larg­est customer, says a tariff conces­sion should be considered for vessels di­rectly delivering raw materials to the Port of Levuka.

Company general manager operations Brett Carter told the Standing Committee on Economic Affairs yesterday that they were committed to keeping operations on the island.

But he said the costs of operating in Levu­ka was creeping up to the extent that PAF­CO was no longer the American seafood leader’s best low-cost producer.

PAFCO employs more than 1000 local staff, making it a vital part of Ovalau’s small economy.

Committee Chair and Assistant Minister for Local Government, Housing and Envi­ronment Lorna Eden asked Mr. Carter if a concession had been sought

Ms. Eden also queried whether it was PAF­CO or Bumble Bee who would have to seek the concession.

Bumble Bee supplies Albacore tuna to PAFCO which is processed into tuna loins at the factory and sold back to the Ameri­can company.

Policy makers see the link between the majority Government-owned Company and Bumble Bee as critical to PAFCO’s surviv­al.

According to Mr. Carter PAFCO produces 11,200 or so tons of fish loins for Bumble Bee.

Mr. Baker said this accounted for 50 per cent of the company’s albacore tuna busi­ness which had a global revenue of US$982 million (FJ$2,016.1m) in 2016.

Mr. Carter heads a team of five who car­ry-out an influential consultancy role from Levuka, it was revealed to the committee.

The team comprises a quality consultant, an engineering manager, a production con­sultant and an operations consultant.

While Bumble Bee does not manage the plant, Mr. Carter said, it provides support in the form of preparing PAFCO for audits, availing capital loans and improving infor­mation technology infrastructure.

In 2013, it issued a US$3 million (FJ$6.16m) loan to PAFCO, which Mr. Carter said was paid last July. The company later issued a $US5.5 million (FJ$11.29m) loan, of which US$3m Mr. Baker said was used to partly fi­nance the construction of a new cold stor­age facility.

Challenges on the island

But the company faces its fair shares of challenges on the island, the committee was told.

Mr. Carter said the remoteness of the is­land, which is located 63 kilometers from Suva, sometimes made it difficult to get raw materials in and finished products out.

Another challenge was the inability to replace skilled labor, something Ms. Eden believed policy makers would need to ad­dress with innovative ideas.

Utility infrastructure on the island and the company’s relationship with unions were also highlighted as issues for the company.

Another recurring concern raised by Mr. Carter during the meeting was what he called “disadvantageous direct deliveries” to the Port of Levuka.

Mr. Carter said there needed to be an ar­rangement where 60 per cent of the fish was delivered by vessels and 40 per cent transferred in containers from Suva.

He said transporting a surplus number of empty containers back to Suva was con­tributing to his costs.

Influential role

The committee asked Mr. Carter if Bum­ble Bee would be interested in becoming a PAFCO shareholder if it decides to divest shares in the future.

“Without getting into detail, the short an­swer is yes,” said Mr. Carter.

Mr. Carter also chose not to elaborate on committee member and Assistant Minis­ter for Infrastructure and Transport Vijay Nath’s query about how the finished prod­uct processed in Fiji compared with prod­ucts from other customers.

Mr. Carter said the product had histori­cally been superior, but was now on par with the rest. Bumble Bee holds an influen­tial role in PAFCO.

But Mr. Carter is adamant Bumble Bee do not interfere with the running of PAFCO.

“PAFCO manages the facility and we are only there to ensure that the product is produced and delivered to the specifica­tions that we have outlined,”Mr. Carter said.

In other words, Mr. Carter and his team, while providing advice to PAFCO’s senior management, only steps in to ensure Bum­ble Bee’s interests are protected in terms of product quality and delivery.

Committee Reactions

Opposition MP Viliame Gavoka called the arrangement between the two companies “phenomenal.”

Committee member and National Fed­eration Party MP Prem Singh said Bumble Bee’s input was valuable to the survival of PAFCO.

Ms. Eden said the “unusual” relationship needed to be nurtured.

Mr. Nath also praised the link, saying Gov­ernment was ready to work with Bumble Bee to ensure PAFCO’s progress.

Mr. Carter has been in the position for the last four years. He said Bumble Bee was working with PAFCO on opportunities to further grow and diversify the business.

Mr. Carter said under him, Bumble Bee’s – who “historically used to manage the plant” – pull back to a more consultancy-centred role had intensified.

On reform, Mr. Carter said Bumble Bee would support any changes that benefitted both them and PAFCO.

He said Bumble Bee would not tell PAFCO how to reform or run their business but be­lieved there was opportunity for PAFCO to diversify its business.



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