Star Kist™ Samoa tuna GM talks to BYUH students

Friday, 21 March 2008

Mike Foley | University Advancement | 21 March 2008

BYU-Hawaii Career Services
invited Brett Butler, general manager of Del Monte's Star Kist™ Tuna manufacturing plant in American Samoa, to speak to School of Business students on March 20 about the issues and challenges he faces running the largest single packing operation of its kind in the world.

Butler, Star Kist Samoa's first Samoan GM, noted the 45-year-old plant processes close to 550 tons of fish a day, generating approximately 60,000 cases or 30 container loads of canned tuna, and employs 2,800 people. "We're one of the biggest buyers of tuna in the world," he said. "We're also moving into pouch tuna packaging."

"We compete with the world, not just the U.S.," Butler said. "Our main competitors are Thailand and South America." He also noted Chicken of the Sea™, a foreign-owned tuna cannery, is located next to the Star Kist operation.

"We have better capital availability and tend to react to the market place faster than they do," he said. For example, Star Kist Samoa recently started producing flavored products. "We're also looking at tilapia...and salmon."

"There are four macros in the tuna canning industry," he continued: "Labor, duties, taxes and fish supply. Star Kist Samoa is very competitive because we're in the prime location for fish supply. We get direct delivery fish. A lot of tuna canneries receive fish via carriers."

However, Butler pointed out that American Samoa's minimum wage of $3.76 an hour is the highest rate in the world for tuna packers. "We can't compete with Thailand and South America, which have wages of 60 cents to a dollar an hour."

Butler outlined the canning process begins with bringing frozen tuna from fishing vessels. The fish are grouped by species — skipjack, yellow fin, big eye — and size. The fish is then partially thawed and pre-cooked. "That's where you get the most meat off the bones," he said. "That's where we make our money."

Once precooked, the fish are cooled down to about 94 degrees (F) prior to cleaning. He pointed out if it's too hot during cleaning there's more wastage; then about 50% of the work force manually eviscerate the fish and clean the meat off the bone. It's a very labor-intensive operation. They haven't invented a machine to effectively clean fish yet."

The pieces and chunks of various species are then mixed with water filler and put into a can. "The cans get seamed, sterilized and packaged for production," Butler continued. "That's the basic process." He added the tuna byproducts that don't go into the can are used to make cat food, fishmeal and fertilizer, the latter sold in Southeast Asia.

One student, who said he eats tuna every day, wondered about mercury poisoning. "California made a big issue out of that," Butler replied. "But you have nothing to worry about. Mercury happens in bigger fish, we're talking about 120 pound fish that have swum the ocean for a long time. In our business, we don't catch that size fish." He added the company also has over 200 quality control employees who carefully monitor that and other issues.

Asked about over-fishing, Butler said there are a lot of different expert opinions. "From my experience, every six or seven years the cycle rolls around," he said, "but I don't know. I leave it up to the experts."

Of more immediate concern, Butler explained the Samoa-based factory is challenged by attendance problems. "We use a point system to track tardiness, absenteeism, call-in absenteeism versus no-call absenteeism, early punch outs, and sick leave. Measuring the people against these standards is an issue," he said. He added that money incentives are not as effective as promoting good attendance with cases of canned Wahoo, which is produced by their competitor. "Wahoo is like gold in the South Pacific market."

"To combat the absenteeism issue, I thought I'll bring in fish that's already been cleaned," Butler said, but added the current high cost of fuel works against that. "American Samoa has one power utility plant driven by diesel, and we all know where that's going. Electrical prices in American Samoa are probably more than twice as expensive as Hawaii."

Asked if there are opportunities in the South Pacific, Butler replied, "If I had to do it over again, I'd do it right now. There are not a lot of people with the skills level who want to come to American Samoa." He also said he might be interested in working with interns, especially those who are already familiar with Six Sigma™ and lean manufacturing statistical process controls.

"Learning to deal with people, with management people, is also critical," he said. "You don't get anywhere dealing with a one-man team. On my management team, everyone has respective expertise."