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Filipino tuna firm Frabelle is still eyeing the potential of processors in the Federated States of Micronesia (FSM) and Kiribati, as 2017 sees tough times for its expanded processing capacities on the Pacific islands.
Frabelle operates as part of a joint venture -- Majestic Seafood -- on Papua New Guinea (PNG), which is owned by it, Thai Union Group and Century Canning Corporation.
Thus far Frabelle has invested a total of US$44 million in the plant, which has been canning skipjack and yellowfin tuna for the EU market since 2013. However, in the second half of 2016 and first of 2017, the balance of landings has been off, Frabelle president Francisco Tiu Laurel told Undercurrent News.
“We invested another US$9m to put up a loin line to process the yellowfin tuna," he said. “Landings in PNG have been 50% yellowfin, and we need a place to store them and process them, as there are very limited buyers for canned yellowfin.”
New floating coldstorage of 3,500 metric tons is in place near the plant, he said, and the loin line is operational; “but we need to expand it since it is not enough [capacity] to be viable".
Frabelle has also invested in another loining line and contact freezers for its own plant on PNG, bringing capacity to 30t per day.
“For Majestic and Frabelle the main problem this year is fish -- catching around the Pacific has been bad this year, and not much skipjack,” said Tiu Laurel. “It's mostly been yellowfin in the first half of this year, so we have problems serving our skipjack contracts due to a lack of fish in general.”
“We want to process more, but lack the raw material,” he said. The plant has been aiming to reach a capacity of 120t per day, which it has in 2017, but only occasionally thanks to inconsistent skipjack supplies.
Meanwhile, Frabelle has been looking for several years at expansion plans on other Pacific islands, with the Solomon Islands, Kiribati and FSM all mooted as possible destinations in the past.
In May 2016 Tiu Laurel told Undercurrent Frabelle's plans to open a tuna loin processing joint venture in the Solomon Islands, as well as another on Tarawa, Kiribati, in the Central Pacific, had both been put on hold.
The Solomon Islands plan remains so, but with recent good news for Kiribati's exports, Frabelle is looking there again, the president said.
“For Kiribati we intend to put a small scale loin plant to see if it will be feasible. If it is then we will expand,” he said. “We should finish a simple loin plant there by March 2018, and let it grow from there.”
Initially the idea is to process 10t per shift, or 20t per day, he said. Starting investment would be around US$3m, he estimated. Work is also under way to repair and modernize the docks for this plant, Tiu Laurel added.
Frabelle had previously planned to work with Korean firms Silla and Dongwon Industries on a Kiribati venture, with plans for a plant able to produce 30t of tuna loins per day, working out at somewhere just over 10,000t per year. Plans did not progress, however. Current plans on Kiribati are being undertaken once again with Silla though, he said.
Now Kiribati has been approved as an “EU competent authority”, meaning the island can now offer skipjack and yellowfin tuna to European partners from Kiribati-flagged fishing vessels and Kiribati processing facilities, according to PNA-based Pacifical.
“The Solomons is on hold for the moment, we prefer to pursue FSM at this time due to common interest," Tiu Laurel added. Previously, of this venture, he had said plans for a loining plant on FSM had been well-received by the government.
“We are now looking to get a site for our project, and secure government approval,” he said in June 2017. “We intend to build a 30t/ day loin plant to start with, and we would like to present this to the FSM government soon.”
He estimated initial investment on the islands would be around US$5m.
Skipjack seems to have been in short supply globally in 2017.
“Catching this year for skipjack is terrible, and overall catches are below average, maybe because of the weather," Tiu Laurel surmised. "I hope it improves soon. But the problem is the FAD [fish aggregating device] ban, so I guess prices should at least remain the same until the end of the year.”
The Western and Central Pacific Ocean operates a FAD-ban from July, for four months. In 2016 this kept skipjack prices stable and high for this period.
At present sources in Bangkok tell Undercurrent that the price level for skipjack landed in Bangkok for July delivery was trading at around US$1,900/t.
Several Thai sources said that they were expecting skipjack prices to remain stable for about a month. They added that they were unsure of how prices would move after that, while in May several Thai sources had said to expect prices to increase towards US$2,000/t, challenging the local canning sector.
SOURCE: UNDERCURRENT NEWS/PACNEWS
Pacific Islands News Association
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International News Safety Institute (INSI)
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