By Pesi Fonua

Despite the hard time that the Tongan economy is going through at the moment, there are some signs of new investment taking shape at the Small Industries Centre (SIC) at Ma'ufanga. A new brewery company is taking over a brewery that went out of business, and a new building complex is underconstruction at SIC by the owner of Tonga Water.

But most of the 64 businesses in operation at the SIC are reeling from the impact of the events of 2020. Recently, the Tonga Asset Managers and Associates Ltd. TAMA has identified a 67% average drop in sales by businesses located at the SIC and only two of the businesses are exporting.

The government’s decision in 2010 to corporatize the Small Industries Centre and rescue its multi-million pa'anga investment to establish the centre in 1980 was seen as a definitive move by government toward establishing a commercial sector in the country.

After years of the government struggling to get the SIC to function as it was anticipated, it decided in 2010 to corporatize the SIC, and established the Tonga Asset Managers and Associates Ltd. (TAMA) in July 2011, to take over the running of the SIC from government, according to TAMA's Chief Executive Officer, Tevita T. Hu’akau,

The establishment of the SIC by the Tongan government on 5 May 1980 was a venture to establish industries and provide opportunities for trained skilled workers in order to counter imports.

The project to build SIC was considered a futuristic move and was financed with a loan from the Asian Development Bank. Businesses who were attracted to invest there, were exempted from paying tax for the first five years of their operation.

The five years tax-free opportunity successfully attracted investors but, unfortunately, after five years some of them left the country.

Corporatization

Today, Tonga Asset Managers and Associates Ltd. is one of 15 public enterprises that were established under the Tongan government's corporatization venture.

Others public enterprises are: Ports Authority Tonga, Tonga Airports Ltd., Tonga Broadcasting Commission, Tonga Communications Corporation, Tonga Development Bank, Tonga Market Ltd., Tonga Post Ltd., Waste Authority Ltd., Tonga Water Board, Tonga Power Ltd., Tonga Forest Products Ltd., Tonga Export Quality Management Ltd., Tonga Cable Ltd. and the Friendly Island Shipping Agency.

TAMA took over the management of the SIC from government along with the responsibility for the remainder of its loan from the Asian Development Bank of $1.5 million.

Tevita said that they had struck an agreement with government in 2015, for TAMA to pay only the interest on the loan for five years. “But starting this month, and last week we repaid the interest and a portion of the principal.”

Tevita said that they have made a subsidiary loan agreement with government for TAMA to repay the $1.5m loan principal during the next eight years.

“We have to pay government not less than $200,000 annually.”

The core staff of TAMA are the CEO Tevita; Finance Manager, Tama’a Ma Maka; Accounting Officer, Taumoha’apai Filise and the Operation Manager, ‘Oholei Tui.

In addition to the SIC, other government properties that are under TAMA’s management are eight acres of the former Commodities Board’s property at Havelu, the Sea Star Fishing Company Ltd;, two acres of land on Vuna Road at Sopu, and four acres of the SIC property at Neiafu, Vava’u.

Tevita said that currently there are 64 businesses in operation at the SIC, employing 227 workers (170 Tongans and 56 foreigners).

Among the 64 businesses who responded to a questionaire that he circulated recently were: 12 warehouses; two nonu juice producers; two paint producers; three drinking water producers; two breweries; one vehicle seats producers; three minibus service operators; two toilet tissues producers; three fish sellers/exporters; two construction companies; two cigarettes manufacturers, and one plastic water tank producer.

Tevita said that the only two companies that are currently still exporting Tongan products are the two nonu juice producers, one operated by a Korean and the other by a Japanese.