Fisheries economics and trade

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Region:    Australasia & the Pacific

Cost/ Benefit Modelling of the Establishment of Onshore Tuna Processing Facilities in Solomon Islands  Solomon Islands

NZ-MFAT - Project Dates:
October 2013 - October 2013

Description of Project:
The Solomon Islands Ministry of Fisheries and Marine Resources (MFMR) commissioned an economic analyses of the cost/ benefit of the establishment of onshore tuna processing, weighed against the opportunity cost of access licensing, in order to inform development of policies for managing tuna fisheries and, in particular, its policy of increasing onshore processing of tuna while seeking to ensure the best possible overall national benefit.
This study builds on previous economic analyses and models of Solomon Islands tuna fisheries already undertaken by Poseidon. This study will contributes to economic analysis of the Solomon Islands Government’s policy of increasing onshore processing of tuna and inform advice on implementation of the policy, with an assessment of different options, where appropriate.

Services Provided:
Specific outputs were to:

1. Review the Ndoma and Tenaru site commercial fisheries investment proposals as presented, and in light of the Contractor’s knowledge of, tuna processing operations elsewhere in the Pacific, provide an analysis of the tuna processing plants’ projected profit/ loss.

2. Develop a spread sheet model which can be used to project plant profit/ loss levels under various operational scenarios in terms of price and cost.

3. Assess the level of fish landings required to support proposed processing volumes, taking into account anticipated catch rates, proposed cold-storage capacities, and proposed plant capacities, so that SIG can make informed decisions regarding associated access allocations.

4. Provide a brief explanation of the importance of duty/quota free access to the EU market for plant profitability.

5. Provide a brief discussion of alternative market options in the event that Solomon Islands lost its access to the EU market.