The Marshall Islands government has declined to bail out a financially troubled tuna-processing factory that supplies StarKist Samoa, but instead wants to take over management control.
The PMOP plant is the largest private sector employer in the Majuro, Marshall Islands and has been shut since the end of August because of cash-flow problems.
Bank of the Marshall Islands’ president Patrick Chen was quoted recently by the Marshall Islands Journal newspaper saying that PMOP had until Oct. 6 to resolve the problems or the bank will recall their loan.
The newspaper reported over the weekend that the Marshall Islands government says it won't bail out PMOP, with government officials describing the factory's continued requests for state funding as untenable.
The Marshall Islands Marine Resources Authority, a government department, has already provided a $2 million loan guarantee for the tuna plant in the late 1990s and will be responsible for repaying back the loan, if it goes into default.
The PMOP tuna loining factory is owned by Philippines, Micronesia and Orient (PM&O) Line president Robert Colson and other foreign investors.
Radio New Zealand International said Colson has written to Marshall Islands president Kessai Note asking for the government's support.
Colson wants the government to support a US$200,000 loan from the Bank of Marshall Islands so the plant can process a million dollars' worth of stored frozen fish, which is in danger of spoiling.
Marshall Islands journalist Giff Johnson told last week via e-mail from Majuro that there are currently about 930 tons of frozen skipjack at the PMOP plant freezer, not processed, valued at about $1 million. The fish is owned by StarKist, which has already paid purse seiners for this fish.
He said time is running out to process this fish and if it’s not processed, it will have to be dumped because of regulations about how long fish can remain in a freezer before processing.
StarKist general manager Phil Thirkell told Samoa News that the fish are stored in a freezer so there is no product risk involved.
He said StarKist has other suppliers of frozen loins, which are currently processing and so there is no prospect of an interruption to the work schedule for the company.
The Marshall Islands government now wants to take management control of the plant.