No mass layoff as brownouts pummel tuna industry—exec

By | April 19, 2013

GENERAL SANTOS CITY(MindaNews/19 April) — With tuna landings here rising steadily since last year, city officials allayed fears of possible massive retrenchments by local tuna canneries due to the continuing power crisis.

Mayor Darlene Antonino-Custodio said Friday the operations of the six tuna canneries here have remained relatively stable in the wake of the seven-hour daily rotating brownouts in the area in the last two months.

The mayor acknowledged that a number of local businesses, especially those in the multimillion tuna industry, have already been incurring huge losses as a result of the daily rotating brownouts implemented by distribution utility South Cotabato II Electric Cooperative (Socoteco II).

But she said local tuna canneries have been operating their standby generator sets as an alternative to sustain their operations during the power outages.

“I don’t think it will reach that far (massive retrenchments),” she said in an interview with ABS-CBN General Santos.


The mayor was reacting to a statement issued by militant fisher folk group Pamalakaya earlier this week that around 50,000 workers in canning factories and deep-sea fishing companies here and in Zamboanga City could lose their jobs due to the impact of the current power crisis.

Salvador France, Pamalakaya vice chairperson, said the seven to eight hour power outages affecting parts of Mindanao might force fishing and canning operators to downsize labor, reduce fishing and canning hours and eventually cut minimum wages by half.

He said that aside from the rotating brownouts, industry operations were also affected by high fuel costs and the 12 percent expanded value added tax.

Marfenio Tan, past president of the Socsksargen Federation of Fishing and Allied Industries Inc., admitted that the long daily brownouts have been slowing down the operations of the industry.

He said some tuna fishing and processing companies have already incurred millions of pesos in losses due to additional production and operational expenses.

Tan said most of them have to contend with the high costs of operating diesel-fed generator sets to sustain their operations.

“Some companies have already opted not to operate their generator sets to avoid further losses,” he said.

Tan said they were forced to incur an additional P3 to P4 per kilowatt-hour (kwh) in terms of electricity expense due to the use of the generator sets.

He said industry players have been paying P7 to P8 per kwh to Socoteco II for their electricity usage.

“That’s the direct impact of the brownouts. These losses should have been part of our savings,” said Tan, who owns tuna fishing firm San Andres Fishing Industries.

In terms of the tuna canneries, which employ around 5,000 workers, Tan said their operations would continue as a long as there are enough tuna landings or supply of raw materials.

“About two to three percent of the production costs of the canning plants are from their power usage,” he said.

The Philippine Fisheries Development Authority reported that the fish port complex here posted last year a total of 139,613.34 metric tons (MT) in fish landings, majority of them tuna.

Such figure was up from the 112,890.81 MT total fish landings in 2011, around 97,000 MT of which were fresh and frozen tuna.

Last month, city fish port manager Edwin Maliwat said the combined frozen and fresh tuna landings in the area reached around 12,000 MT.

He said the tuna landings in the city have continued to increase mainly due to the rising demand from the tuna canneries.

“Frozen tuna are mainly imported and are unloaded by foreign fishing vessels. These are delivered directly to the tuna canneries,” he said.

Rey Billena, vice president of the General Santos Chamber of Commerce and Industry, earlier said in a statement that the worsening power crisis had forced owners of tuna canning factories and fishing vessels in the area to shoulder an additional P2 million in operating costs per day to cover for the fuel and the man-hours.

He said one cannery even lost between P200,000 and P300,000 to pay workers who did not work on certain days because there was no electricity.

Billena noted that his own ice cream factory incurred P500,000 in extra costs in one month while other businessmen in the Socsksargen region were planning to close shop temporarily to prevent total bankruptcy, as outages occur daily during working hours. (Allen V. Estabillo/MindaNews)