PROPOSAL FOR TUNA CANNERY

There is a great future and a growing demand for canning and processing tuna. A state of the art tuna cannery, if designed and managed properly, can be highly profitable. The following is for your review and interest.

The tuna canning industry is highly successful in the South Pacific and East Asia due to its low labor rates, raw tuna supply, low overheads, low freight rates etc. Nearly 70% of the world tuna supply comes from the Western Pacific Oceans which surrounds most of the East Asia and South Pacific countries. The largest exporter of canned tuna in the world is Thailand with over 21 million cases worth about $608 million per year. The Philippines is second with over 6 million cases worth about $130 million per year. Indonesia is third with over 3.5 million cases worth about $100 million per year. The total world import demand is over 56 million cases per year. The European Union is the largest importer with over 36 million cases per year with the USA second with over 11 million cases per year. The demand for canned tuna is growing substantially at more than 5% each year.

There are several tuna canneries in the South Pacific that have been taking full advantage of the rich natural resources of the surrounding oceans. I have worked at several of these tuna canneries and know that with good management, it can be highly profitable. American Samoa has 2 large tuna canneries owned by USA companies that have been highly profitable every year. They have been operating for more than 25 years. I managed Starkist Samoa for 4.5 years and know that this cannery is very profitable. Papua New Guinea has 1 tuna cannery owned by a Philippine company. I worked at this cannery for 1 year and made them very profitable. It is a small tuna cannery processing 120 tons a day and their net profit exceeded over $7 million. Now there are 2 new tuna canneries that just started operating and one other is now under construction. The Fijian government had a joint venture with a Japanese company and they built a tuna cannery that was doing poorly until recently when they were contracted with a large USA tuna company. The tuna cannery in Fiji is now fully owned by the government. The Solomon Islands has a tuna cannery but due to the recent governmental problems, it has not done well. Thailand is the largest and most successful with several large tuna canneries, while the Philippines and Indonesia share a similar success. I have worked at tuna canneries in these countries and know that it is a profitable industry.

Many countries in East Asia and in the South Pacific, with vast coastlines are strategically located in an excellent tuna processing area. Most are actually very close to fishing grounds and better located for numerous shipping lines. Indonesia has a unique natural resource of having one of the best albacore fishing grounds in the world. Albacore is the most expensive specie of tuna and is the most profitable. A state of the art tuna cannery capable of processing 50-100 metric tons per day would be highly successful and very profitable in any of these countries in South East Asia. It would generate substantial income and it would also provide employment for 1,000-1,500 workers. In addition to canned tuna, the by-product from the fish waste is made into fish meal. Fish meal is made into animal feed and would provide agricultural benefits and livestock needs. The fish oil can also be extracted. Tuna oil is high in Omega 3 Fatty acids which is sought after for its health benefits. In addition to the income generated by the tuna cannery, there would be opportunity for many different support industries such as boarding houses for the workers, restaurants, department stores, shopping malls, equipment fabricators, contractors, etc. An entire infrastructure would be created that would provide a well balanced economy. This tuna cannery would substantially contribute to the entire countries economy for the short and long term. In addition to serving canned tuna to the world export market, there is also a high potential for developing canned tuna products specifically for the local market. This alone can substantially increase the overall net profit of this cannery. The following is a brief list of economic benefits in having a tuna cannery.

1. Net profit from the cannery would be several millions $ annually.
2. Provide employment for 1,000-1,500 cannery workers. Would be one of the largest employers in the country.
3. Would be one of the largest user and buyer of water/utilities/electricity.
4. Industrial fisheries services such as stevedoring, agencies, ship repair, supplies, etc. would provide additional revenue and employment for more than 1,000 workers.
5. More shipping lines would move in to provide transportation to and from other countries.
6. There would be more than 1,000 plus fishermen with full employment.
7. Additional income from fishing licenses for access agreements that allow foreign owned vessels to fish in surrounding waters.
8. Development of restaurants, stores, shopping malls, housing, etc., as provision to all of the workers in the new industries.
9. Provide a lowcost canned tuna product for the local market.
10. An entire infrastructure would be developed.

These are a few of the major economic benefits that a single tuna cannery can create if planned and designed properly.

Many of the countries are very suitable for having a tuna cannery, especially countries that qualify for duty free status to EU(European Union) and the USA. The duty for the EU is 24% and is normally paid by the buyers. The USA has a duty of 12%. The duty is normally split between the buyer and producer and this would be an additional profit margin.

Below is a list of East Asian countries with tuna canneries:

1. Philippines: Has 7 successful tuna canneries operating. The fishing companies and infrastructure is well established. Although not ACP, still profitable business and a new cannery would not affect the competition here.
2. Viet Nam: Only 2 small tuna canneries in operation. The country is quickly developing and a state of the art tuna cannery would do very well here. Although not an ACP country, it would compete with the tuna canneries in Thailand but would have more advantages.
3. Fiji: This is an ACP country and has only 1 tuna cannery operated by the government. They have a contract with a large USA tuna company(Bumble Bee) so most of the production is going to the USA. They are not taking advantage of the EU duty free status. A state of the art tuna cannery that exports only to EU countries would be highly profitable.
4. Solomon Islands: Also an ACP country and has 1 tuna cannery that is not doing very well and is operated/owned by the government. Due to the unstable peace and order, would not suggest this location.
5. Indonesia: Has more than 10 small tuna canneries but only a few are doing well, due to lack of tuna canning experience, technology, and management. Can potentially compete with Thailand due to its rich albacore and tuna fishing grounds.
6. Papua New Guinea: ACP country and will have 3 tuna canneries by the end of this year. Things move very slowly with the government and might take time for all the approvals for another tuna cannery but still it is very profitable.
7. Thailand: The largest tuna producer and exporter of canned tuna in Asia with more than 25 major tuna canneries. The most successful and well established of all the countries.
8. China: Developing into a major tuna processor with several canneries already operating.
9. American Samoa: There are 2 large tuna canneries owned by Starkist and Chicken of the Sea. Since this is a territory of the USA, all products are for USA and have some tax exemptions. Labor rates are high but the canneries are very successful.

A small but highly efficient tuna cannery in any of the East Asia or South Pacific countries can be very profitable and rewarding for the investors and economy of the country. Countries in other geographical locations can also be very profitable but must be studied and well planned before attempting.

I would like to propose to design, build, and manage this tuna cannery for a group of prominent investors. My credentials and past achievements would fully qualify me as the ideal candidate for this project.

I am a highly successful consultant with 40 years of tuna processing experience. My expertise is making tuna canneries very profitable. I have a proven track record in the USA(Starkist in American Samoa), Thailand(Thai Union/Songkla Canning), Korea(Dongwon Industries), the Philippines(Century Canning, PhilBest Canning), Papua New Guinea(RD Tuna Canners), and Indonesia. I have made all of these companies very profitable through my expertise of management and technical processing.

My experience and success in tuna, seafood, and pet food operations includes the following. I spent 17 years with Starkist Seafoods which is the largest tuna processor in the world. My contributions at Starkist are substantial and include over $36 million in annual savings from raw fish yields, labor reduction, process improvements and others. These savings are what kept Starkist number one and allowed them to remain competitive with Thailand. I also worked 3 years for Thai Union Manufacturing and Songkla Canning located in Thailand which is the 2nd largest tuna processor in the world. Again my success was over $10 million in annual savings. Century Canning is the largest tuna processor in the Philippines, and Dongwon the largest in Korea. I also worked for the RD Group which owns PhilBest Canning Corporation in the Philippines and RD Tuna Canners in Papua New Guinea. In Indonesia, I made significant improvement to the processing for increased profitability. All of these companies became very profitable using my consulting. My experience covers many different countries throughout the world. All of my work was with the largest and most successful tuna companies in the world.

As a professional in the seafood industry, my expertise includes the following:

1. Plant construction and design
2. Management and organization
3. Sales and Marketing
4. Fish Procurement
5. Quality Assurance
6. Maximize yields and labor/equipment efficiency
7. Maximize cost effectiveness and profitability
8. Technical processing and product quality
9. HACCP, GMP
10. Technical Services

My success includes improvements which highly contribute to profitability. These achievements include substantial savings from raw material recovery/yields, labor reduction, process improvement, and other major cost effective areas. I look at the full scope of the company and focus on raw fish supply, marketing, operations, and quality control. I emphasize team work which creates a well organized working environment. This will contribute to substantial improvements in the general operation. My American management skills allow me to introduce standard operating procedures and systematic methods which make any operation far more efficient. My thorough understanding of each countries culture has contributed to my success.

There are many opportunities to maximize the cost effectiveness of any manufacturing operation, especially processing/production. My success shows that I can make significant contributions in optimizing the operation which will result in substantial financial savings and will highly impact profitability.

In order to become reputable, and a leader in the tuna industry, it takes more than just building a plant or acquiring existing tuna canneries. Many large companies had a vision of becoming the largest and best tuna processor in the world and ended up in failure. They flourished and then failed due to inexperience, over confidence, and mismanagement. Classic examples are Unicord in Thailand and First Dominion in the Philippines. Both of these were the largest tuna processors in Asia at the peak of their success, then later went bankrupt. From my vast experience and knowledge, I know what it takes to be successful and to be the most reputable and profitable in the world. In addition, I know how to sustain this success over the long term and to provide steady growth in future years.

I would be fully dedicated to this tuna cannery project for a long term business involvement that would be 5-10 years. I hope that you will seriously consider this project due to its significant economic impact and high profitability.

I have enclosed some background information on myself including, a resume and referral letters from past employers.

I look forward to hearing from you soon.

Best regards,

Don Hosokawa

USA Cellphone +1(714)7265670
Email: dhosokawa@gmail.com