As published in Spain by La Voz de Galicia, written by Miguel A. Rodriguez
U.S. and Thai companies produce 200,000 tons a year from plants in Papua New Guinea
Giant Asian and North American canners are preparing a tuna invasion in the European market, taking advantage of the loophole which Papua New Guinea (PNG) has become after advantageous marketing arrangements reached with Brussels.
Since January 2010, the tuna cans from the Philippines in Southeast Asia and Fiji can be placed in Europe without paying any tariffs and without obliging them to obtain raw materials within their own environment, as is the case for Spanish plants installed around the world. Although they are exempt from paying a tariff of 24%, they are forced to be self-sufficient and obtain their raw material within the waters where their plants are located at.
In just nine months, Europe received about 15,000 tons of tuna from PNG, which –within this record time- has already cornered 3% of the EU market, with prices up to 35% lower than the prices of canned tuna produced in Spain. (85% of the Spanish canned tuna production comes from Galicia).
The large Thai, Philippine and American groups have found in PNG the perfect penetration channel and do not want to miss this advantage. Up to five multinationals in these countries have begun building huge production plants (macro plants) in various locations in PNG. All together, this represents an investment which exceeds Euro 240 million, with a estimate to generate 36,000 jobs between now and 2011, and produce over 200,000 tons of tuna per year, which is the equivalent of what is currently being manufactured in the 67 Galician canneries.
The Spanish sector, and especially the Galician sector, believes that in just one year, the first exports from these plants will take over 15% of the European Union market. Presently, Galicia sells about 93.000 tons of canned tuna, 50% private label and the other half brands sold by large retail chains. What is really serious is that seven of every ten cans produced by Galician canneries contain tuna. Therefore, any market shake up of this species may cause shock within the sector.
Community Deafness
Spanish employer representatives have requested Brussels to reconsider its policy of permissiveness with PNG and Fiji, a disposition that could expand to all the small Pacific states in coming years.
For now, Brussels has turned a deaf ear to complaints from Spain, mainly Galicia. Juan Vieites, secretary general of the National Association of Canned Products (Anfaco), said that if the agreements with these countries are not reviewed by next year, the Galician industry could begin to be seriously affected. “There is a real risk of dislocation†he said.
At the beginning of 2010, the president of the European Commission, Durão Barroso, already proposed Spanish companies to start planning on settling in Southeast Asia as an alternative to this competition. Barroso’s advice prompted the president of the Xunta, Núñez Feijoo, to officially ask for a correction.
However, those who did listen to Barroso were the U.S. and Asian giants. At present, the PNG region of Madang houses a 348-acre marine park which could fit up to ten fish processing macro plants. Three of them are already under construction, with an estimated total investment of around Euro 218 million. These plants are South Seas Tuna Corporation, one of the largest tuna canneries in the United States, based in Denver (Colorado); and the Philippines companies RD Tuna and Frabelle Fishing, the latter ranked among the six major world producers.
In Lae, another PNG region, is the second largest canning industrial estate. The first macro plant is already under construction, and is the product of a joint venture between Frabelle and Thai Union, another world leader, and with the Philippine Caning Century. The investment exceeds Euro 22 million. Despite environmental complaints raised in PNG, the government says these investments will be followed by even greater ones.
Source: La Voz de Galicia
