Thai Seafood Producer to Close Long Beach, Calif., Packing Plant.

Aug. 3--Thai Union Frozen Products, a leading canned and frozen seafood producer, will close its California packing operation in October this year, aiming to cut high operating costs and tax rates in an increasingly competitive environment.

A source from TUF, who asked not to be named, cited a shortage of local raw materials, higher costs of production due to increasing labour costs, and low tuna prices.

TUF operates two plants through its US tuna cannery subsidiary, Tri-Union Seafood, which owns the Chicken of the Sea brand. The California plant will be closed, and some production shifted to the second plant in American Samoa, regarded in the industry as the lowest-cost base for tuna production in US territory.

About 60 percent of the world's total tuna supply now comes from the western Pacific Ocean where the island is located.

The source described the California plant as uncompetitive, taking into account the high transport and labour costs and expensive raw materials. Tax rates were as high as 30-40 percent as well, the source said.

The plant in Long Beach processes 100 tons of tuna and salmon per day compared with over 300-400 tons from its Samoan counterpart.

The company forecasts it will spend about US$3-4 million baht for the plant shutdown, including compensation to 200 local workers.