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Tsunamis a blow to tuna cannery industry

October 12, 2009
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The tsunami that killed nearly 200 people in the Samoas also dealt a vicious blow to the already sputtering tuna cannery industry of the American Samoa economy, reports the Associated Press. The U.S. territory has long been home to Chicken of the Sea and Starkist plants that make more than half the canned tuna consumed in the U.S., filling American grocery store shelves with millions of cans of tuna used for tuna sandwiches and salads. Even before the tsunamis roared ashore recently, the territory had been bracing for the closure of the Chicken of the Sea facility, which meant nearly 2,000 people would lose their jobs. Thanks to the tsunamis, the end effectively came a day earlier than was scheduled. The cannery run by StarKist Co. lost power in the tsunami and isn''t expected to return to full production for another month or so. The two canneries directly and indirectly make up about 80 percent of all economic activity in American Samoa. The industry was in trouble even before the disaster because of a 2007 federal law mandating that the same minimum wage laws that apply to the 50 states be enforced in the territory. The law is gradually hiking the minimum wage for American Samoa 50 cents a year until it reaches $7.25 -- the same standard as the rest of the country. The law has boosted labor costs for the canneries by more than 30 percent. Cannery workers in the territory now earn an average of $5.11 an hour. Chicken of the Sea chose to shut down and move its canning to a leaner facility in Georgia. StarKist laid-off about 350 hourly and salaried workers, but it has chosen to stay and lobby for a new bill now before Congress that would provide U.S. fishing fleets with incentives to sell their fish in American Samoa. The bill would also pay subsidies to processors, like StarKist, in the U.S. territory. The tsunamis largely spared both plants even though they destroyed dozens of buildings across the harbor. They did, however, drown the power plant that feeds electricity to StarKist, knocking the plant out of service. To cope, StarKist is shipping 10 generators to Pago Pago from Los Angeles that will supply the plant with electricity until the local power plant is rebuilt. The plant should be fully operational in six or seven weeks. In the meantime, StarKist is storing 4,000 tons, or $13 million worth of tuna, in freezers run on generators. StarKist says the disruption to production won''t affect the supply of tuna on store shelves. The company has an eight-week supply already in the U.S. and a few more weeks worth currently in containers heading for the U.S.

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