Planned Food Processing Plant Investment In American Samoa Still Seeks Financing

Status of development at Tafuna Industrial Park questioned in Fono

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Feb. 10, 2017) – One-year and three-weeks after ground breaking for a multi food processing plant at the Tafuna Industrial Park, it appears investors for the project are not yet firmed up, resulting in Commerce Department director Keniseli Lafaele being questioned on the matter by some senators during his confirmation hearing Wednesday before the Senate Economic Development and Ways & Means Committee.

Philippines based AVM Bernardo Engineering proposed to invest $106 million to set up a “multi-line food processing plant” focusing first on frozen fish-based sausage, ham, nuggets and patties. Later it will extend to other products such as juice and a groundbreaking ceremony was held late January of last year, where the Lolo Administration touted the project as a milestone in local economic development.

Flash forward to February 2017 — Lafaela is asked by Sen. Paepae Iosefa Faiai on the status of the AVM plant, during his confirmation hearing.

Lafaele explained that the AVM owner and investors are meeting in Honolulu next week where all issues pertaining to this project development are expected to be completed and thereafter, the foundation will be laid for the building at the industrial park site.

Paepae said that if a company wants to set up business in the territory, they should have a firm business plan and solid investors, who should be thoroughly vetted by the local government to make sure they are solid investors and no “scam” is involved. He claimed that he has heard that AVM is trying to find investors.

Sen. Tuaolo Manaia Fruean noted that this project broke ground several months ago and now Lafaele is telling the committee that AVM is looking for investors. 

Lafaele said preparing for this project was not an easy task; and Tuaolo quickly interjected, asking why then was the groundbreaking carried out so early on. He said that when there is a groundbreaking that means the project would start thereafter.

Lafaele explained that at the time, when the project broke ground, there were investors to move the project forward; however, it was later on that investors withdrew and the company looked at other investors interested in this project.

He said when it comes to these types of issues or projects an owner reviews investors to see if they are “serious” and whether they want to invest in American Samoa. “The truth is, 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.”

An example of this, according to Lafaele, is the Trans Pacific Partnership (TPP) agreement, from which the US was withdrawn by President Donald Trump, and he noted that the TPP covers fish products and other exports to the US.

AVM’s operation includes fish products and when American Samoa is not an “advantage” for duty free export to the US, then investors would no longer be interested in American Samoa, he said and explained that among the AVM investors are those from Vietnam — which is one of the countries with canned tuna exported to the US, and one of the countries under the TPP.

Lafaele said there is interest from other investors for AVM’s proposed operation and because of ongoing discussions between AVM and its investors he couldn’t elaborate further on the matter at this point. He however acknowledged Tuaolo’s concern about the waiting period following the groundbreaking.

He also says that the government is working as well to find any interested party to take over and continue operations at Samoa Tuna Processors Inc., which closed Dec. 16 of last year its cannery operation, laying-off nearly 700 workers.

Responding to Samoa News questions after the Senate confirmation hearing, Lafaele said that in the Honolulu meeting next week, AVM would provide a “status report on its efforts.” Furthermore, “construction and other details” for the project “are not available at this time until next week’s meeting.”

During the confirmation hearing, Tuaolo told Lafaele that from “reading your resume, you are the government’s economist.” Lafaele’s resume states that he was an independent financial advisor as well as a financial advisor for Amerprise Financial Services; and Tuaolo asked Lafaele, as DOC director, if he had brought in any new businesses and if so how many of them in the last four years.

Lafaele responded that many small businesses were established in American Samoa, but no major companies, such as AVM, which is looking at employing 700 workers when in full operation. He pointed to Datamatics, which would have hired up to 2,000 people over a five-year period, but that the company had opted out of the territory due to the high cost of Internet connectivity.

(Datamatics was looking to set up a local business process outsourcing (BPO) operation — similar to a call center.)

He said Internet costs are expected to drop with the Samoa-based Tui Samoa undersea fiber optic cable, which is to be launched later this year, and the Hawaiki cable, in which ASTCA is involved — and is looking to be on line next year.

Bringing down Internet costs would also attract US based telecommunication and information technology businesses to the territory, the DOC nominee said.

Additionally, the government is working on two major projects — renovation of the old Rainmaker hotel and the Tramway, Lafaele said.

Responding to another question from Tuaolo, Lafaele confirmed that he is one of the directors traveling with the governor for meetings in Washington D.C.

Tuaolo told Lafaele that if he has a chance to meet the US Commerce Secretary in the nation’s capital, to ask the Secretary for a chance to bring a US company to the territory that manufactures uniforms for the US military, instead of having the uniforms manufactured in Singapore or Thailand, and yet the uniforms are worn by US Armed Forces personnel.

“American Samoa can supply military uniforms and such an operation can also manufacture the US flag and such operation does not pollute the air,” Tuaolo said, adding that something should be done to clean up the old site of the Daewoosa Samoa garment plant at the industrial park as investors won’t come to American Samoa when they see this type of mess.

Lafaele said that this site is leased to GHC Reid, which will be asked to clean up the area.

The Samoa News
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