Letter written by S. Noketa to the Editor of Solomon Star
“I refer to the article, Soltai back soon, which appeared on your paper on Tuesday 4th May, 2010.
Most of us here at Noro are not surprised at all that the cannery production has been suspended for more than one month and that Soltai is now in her last breath, urgently requiring a major financial package to salvage her.
I had voiced my concern on this paper in the past, that the Soltai’s board had erred in allowing the expatriate management to control Soltai. No one listened then!
What was really needed was a substantial capital injection from the shareholders, not this foreign based management who has no experience in running a company of Soltai’s unique nature.
Soltai had operated well without any major cashflow and operational hiccups in the first few consecutive years, after the company’s formation in the early 2000.
The management then, was one of the most capable fishing & operational professionals, and amongst them, they had about 80 years of experience all together, in STL, Soltai, and abroad.
As soon as they took control, the expatriate management instantly discarded smoking and fishing, and put less emphasis in regional and local canned tuna markets, including the fishmeal, but vigorously intensified loining production at the expense of the local employees’ welfares.
With the new management in place, NFD sold more frozen fish to Soltai and TMI profitably sold more Soltai’s loins overseas, and of course both have become financially successful at the expense, and further demise of Soltai.
In all export sales and fish purchases under the foreign management, Soltai has always been the price-taker and has never been in a position to negotiate better prices.
IIt is important to note here that, because of the unique nature of Soltai and her remote location here at Noro, she would not have survived financially by producing and trading in loins alone; both the Japanese management of STL and the local management of Soltai knew this fairly well.
Soltai would need to engage in other fisheries related operations apart from loining operation, like what Soltai did before the new management came in.
What should have been done by the expatriate management was to analyse, revamp, and hopefully operate these operations profitability, not getting rid of them forthwith without further consultation and study.
The bizarre thing out of all this was that the expatriate management did not want to do anything about restarting smoking production, even though smoking operation had been proven profitable for both STL and Soltai in the past.
The critical issue here was whether their silence and ignorance in this smoking issue was in the best interest of Soltai?
All in all, the current arrangement is not in the best interest of Soltai, and the current suspension of cannery production is the proof, the company is not getting any more funds to continue operations as there are no more products to sell - this is what you will get when you put all your eggs in one basket.
Therefore Soltai’s shareholders will urgently need to inject funds into Soltai, but it is very unlikely that TMI would lend additional funds, unless TMI is allowed to own shares in Soltai.
I therefore urge Soltai’s shareholders to immediately scrutinize the expatriate management, the current chairman of the board, and that whether they have been acting in the best interest of Soltai, and crucially, whether it is now time to throw in the towel for Soltai, and let TMI takes full ownership and does whatever she sees fit for her purpose.
May God bless Soltai.â€
Written by S. Noketa
Kohingo Island, Western Province
Published on Solomon Star