Report on the Implementation of the derogation to ... - Trade Websites

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
• Phase 2: Expand maximum processing capacity from 120 mt/day to 350 mt/day (~87,500
mt raw material); no firm commitment to extend to Phase 2 – will depend on profitability of
operations at Phase 1 production volumes; 4,500 employees.
A 15 ha site was purchased at Malahang in Lae and in September 2011, the facility’s buildings were
70% constructed. Operations are planned to commence in the second quarter of 2012 and the
company will utilise Frabelle’s wharf. Raw material will be sourced from vessels utilising fishing
licences issued in association with the plant (up to ten licences). In December 2011, NFA Board
approved the issue of four licences to supply the plants Phase 1 raw material needs (up to 120
mt/day), as the plant has reached 75% completion. According to NFA, the issue of the additional six
licences will be staged and will be contingent on the plant proceeding to Phase 2 (i.e. 350 mt/day).
The company will likely need to source additional raw material from other vessels (including utilising
global sourcing), unless additional fishing licences are issued. Currently, Frabelle is constructing a
new vessel to supply Majestic and NFA have indicated that a vessel of equivalent capacity will be
scrapped. According to NFA, Majestic licences will be PNG-flagged and have access to EEZ waters
only, although this conflicts with earlier information provided that PNG-flagged vessels will likely
have access to PNG’s AW and EEZ. 38
At this stage, it is planned that Majestic will process 100% canned tuna; 80-90% of which will be
exported to the EU market (Germany, Italy, UK); with 10-20% to other markets including the US,
Japan and others. Given plant construction is nearing completion, the likelihood of this operation
proceeding is definite.
International Food Corporation (IFC) – Malahang, Lae
International Food Corporation is an existing facility which has processed canned mackerel since
1997 at Malahang in Lae. The plant is owned by a Malaysian state-owned enterprise, FIMA
Company. Plans are well underway to expand operations to include canned tuna and cooked loin
production (target production 120 mt/day; 3,000 employees). Up to ten fishing licences will be
granted in association with the expansion. As IFC does not own an existing purse seine fleet, it
intends to try to partner with a Filipino fishing company to secure raw materials (up to 30,000
mt/year) and operate up to four PNG-flagged vessels, in the first instance. IFC would also look to
source from other vessels, most likely Philippines-owned, through global sourcing, if need be.
Production is anticipated to be 70% canned tuna and 30% cooked loins; 95% of which is planned to
be exported to the EU market (canned tuna to Germany, loins to Spain). As at September 2011, new
tuna processing equipment had been installed and trial production of 4-5 mt/day was taking place.
However, the plant was experiencing difficulties sourcing raw material. IFC tuna processing facility
has passed an EU-SPS inspection and is waiting for the SPS certificate to be issued. It is anticipated
that initial production will commence at 40 mt/day, and ideally build up to 120 mt over five years.
While equipment has been installed, sourcing ongoing adequate volumes of raw material presents a
risk to the operation (to date, only one licence has been taken up by a small purse seiner operated
by Philippine fishing company Rel & Ren). Also, this is now IFC’s third attempt to expand into canned
tuna production.
Nambawan Seafoods – Malahang, Lae
Nambawan Seafoods is a proposed joint venture between two Philippines fishing companies - Trans
Pacific Journey Fishing Corporation (TPJ) and TSP Marine Industries to establish a 150 mt/day plant
to process canned tuna and cooked loins. Morobe Provincial Government has also been offered 10%
38 NFA Managing Director, S. Pokajam, pers. comm., December 2011.
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