Smoking chums

have an eye on all the Pacific

From SUE WENDT, in Suva With Fiji’s “smokers” market sewn up—following their merger in May of manufacturing resources—Carreras of Fiji Ltd. and Fiji Tobacco are casting an interested eye towards other South Pacific markets.

A joint production unit for both companies has been established at Nabua, near Suva, to manufacture all Fiji’s cigarette and tobacco re quirements.

“This should decrease overhead costs for the two companies and allow us to sit down and look closely at the very competitive South Pacific market,” Mr. Alex Finnic told PIM.

Formerly general manager of Carreras, he now heads the new manufacturing operation, Central Manufacturing Company Ltd.

“The export potential is con siderable. New Caledonia, the New Hebrides, the Gilbert and Ellice Islands, the Cooks, Samoa and Tonga import their requirements from Aus tralia, New Zealand, the U.K., France and America.

“The Fiji Government is looking at the usefulness of incentive schemes and should they come up with the kind of scheme that many countries give manufacturers, export from Fiji to neighbouring countries will be a feasible proposition.”

Mr. Finnic stressed that the new manufacturing operation doesn’t re present a takeover of Fiji Tobacco by Carreras, which previously held 85 per cent, of the Fiji market. “It is simply a merging of resources in the interests of both companies and for the good of Fiji,” he said.

“Improved efficiency of the industry will create greater security of employ ment. We hope to contribute to the balance of payments by producing cigarette filters in Fiji. Both com panies are now importing $60,000 worth of filters annually.”

While the Central Manufacturing Company was responsible for pro ducing and distributing both com pany’s requirements Carreras and Fiji Tobacco would continue to operate as distinctly separate and competitive marketing companies, promoting and servicing their existing brands (which include Rothmans, Benson and Hedges and Dunhill).

Carreras Ltd. of London holds 70 per cent, of the equity in C.M.C. and

the British American Tobacco Com pany and British Tobacco Company (Australia) each hold 15 per cent. According to Mr. Finnic, the Fiji market just wasn’t big enough for two companies to be commercially viable.

“The total market is less than 30 million cigarettes a month,” he said.

“If one company had the lion’s share, the other would lose money. If both had 50 per cent, of the market, it still wasn’t a viable proposition.

It’s evident that British American Tobacco and British Tobacco (Aus tralia) were absorbing Fiji Tobacco losses before the merger, but to what extent Mr. Finnic wouldn’t say.

Combined turnover of Carreras and Fiji Tobacco is $4 million a year.

Total capital investment of the new manufacturing company, including expansion of the Nabua factory and improvement of staff facilities, will be about $2 million.

Last year, the Fiji Government in creased excise duty on imported tobacco, which meant an increase or 6 cents on packets of 20 cigarettes— a shot in the arm for the local tobacco growing industry. The new company aims to incorporate more local leaf, building up to about 55-60 oer cent, local content, which will also assist Fiji’s balance of payments P °“As n the quality of local leaf im proves, the thinking on this may alter,” said Mr. Finme. ‘ Fiji leaf is generally of good quality, particularly the two top grades.”

About 800 farmers, with 475 acres devoted to tobacco, are indirectly employed by the Southern Develop ment Co. Ltd., the leaf-producing subsidiary of C.M.C. Plans are to increase the acreage to 500 acres next ye The return to farmers per acre of tobacco is approximately double that of cane—but it requires a lot more work. Future increases m acreage will depend on how fast the tour grades of local leaf can be improved.

The industry in Fiji is almost com pletely localised. Of the 230 staff members employed by the various companies, only four are expatriates and two of these are leaf-growing specialists, difficult to replace. The post of production manager is to be localised next year.

“As an industry, we re of reason able importance to Fiji’s economy, contributing 6 per cent in the way of excise duty,” Mr. Finme said.

“Over 1,000 people are . direct v ‘V employed or associated with the industry and an additional MOO retail outlets derive profits from cigarette and tobacco sales.

In Fiji, cigarette smoking is in creasing by about 4 per cent, a year,

slightly higher than the UK and US rate.

While Fiji hasn’t seen fit to estab lish the strict advertising controls existing elsewhere, “by voluntary agreement with the government” the cigarette companies stopped adver tising in cinemas from June 1.

From January next year all locally produced cigarettes will carry a health warning—but the experience of other countries indicates that this isn’t likely to make much difference to local cigarette consumption.

Latest news from the tobacco industry was that a $250,000 contract for building extensions to the Central Manufacturing Company’s manufac turing plant at Nabua had been awarded to a local firm, Reddy Con struction Co. Ltd.

When completed early next year, the factory will be one of Fiji’s largest manufacturing units with assets of more than $2 million.

Cooks bottle

the Scotch

The price of Scotch selling in the Cook Islands has dropped by 40c a bottle because the Cook Islands Liquor Supply is obtaining bulk sup plies from New Zealand and doing its own bottling.

According to the Supply manager, Mr. Michael Benns, a price reduction was possible because the shipping of the whisky in 50-gallon casks pre vented the large-scale pilfering of bottles on the docks at Auckland. It is planned to import bulk supplies of other spirits.

There would also be a saving on empty bottles because the members of the Boys’ Brigade had agreed to collect empty bottles for the liquor store.

First to sample the home-bottled whisky was Premier Albert Henry.

Air charter service

for Vavau hotel

Tonga Tourist and Development Co. Ltd., which will operate the Port of Refuge Hotel on Vavau, has formed an association with Airfast of Australia to run an air charter service between Nukualofa and Vavau.

Directors of TTD and Airfast representatives met in Fiji in June to discuss programming of the services and the type of aircraft required.

Airfast operates helicopters in Fiji.

TTD’s general manager, Mr. lan Mclntyre, told PIM that Airfast would provide the aircraft and staff for the service, due to start in August to coincide with the opening of the

hotel. “We’re planning on a Twin Otter type of aircraft,” he said.

Clearing of a 3,000 ft airstrip on Vavau began in May. The company has Tongan Government rights to operate a charter service, but is hoping to get approval for scheduled flights.

“We’re seeking to complement the services operated in and out of Tonga by Air Pacific and Polynesian,” Mr.

Mclntyre said. “The charter opera tion will definitely begin in August.”

The hotel, featuring fale-style units, will open with accommodation for 90 people. The air service will facilitate transport of visitors to the island, which currently depends on a twice-weekly passenger service by the Pacific Navigation Company vessel Olovaha.

The company has released two hotel tariffs —one operating from August to December and the other from next January.

Existing rates are ST 15 single; $T 17.50 double or twin and ST2S for luxury suites. From next January rates will be 5T17.50, ST2I and ST3O.

Samoans to

clothe Americans

When a new factory planned for American Samoa gets under way, Samoan-made suits will be exported duty free to the United States under an unlimited quota.

The factory, scheduled for a June opening by the American clothing firm of Peter J. Brennan, will be installed temporarily in the B. F. Kneubuhl warehouse at Satala until the company builds its own premises in the industrial park area at Tafuna.

About 40 workers will be trained and employed at the outset and this will increase to about 100 within a year and to about 500 when the factory is in full production.

All material will be flown in from Taiwan and work at the factory will include sewing, pressing and packing.

The company already has advance orders for the clothing in 16 states.

Timber, Fiji's

new money spinner

The Fiji Government is giving priority to an extensive pine-planting programme which United Nations experts predict will give Fiji a new export industry rivalling sugar by the 1980 s.

A three-year UNDP and FAO survey revealed that at least 78 square miles of pines would have to be planted by 1978 for Fiji to avoid being beaten to the Japanese market.

The target set is 210 square miles.