S ec to r P r o f i l e
interview:
Taking PNG sustainable palm oil to the world
Palm oil, sugar and beef producer, New Britain Palm Oil Limited, is PNG’s leading agribusiness, with almost 100,000 hectares under its management across several provinces. Made in PNG asked Jamie Graham, General Manager of NBPOL subsidiary Ramu Agri Industries, about the next steps for this PNG success story.
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BPOL’s recent growth has been impressive, growing from a turnover of US$225 million to US$780 million in just five years. One of the factors behind that is clearly the increased worldwide demand for palm oil. How do you see that demand being reflected in your activities on the ground? We’re working on continued expansion of palm oil within PNG. At Ramu [in Morobe’s Markham Valley], we’ve already got our first area of land leased, but we’re working on a number of other areas too. Growth will be achieved by a mix of both plantations and smallholders, particularly at Ramu: we feel there’s an opportunity there to increase the number of smallholders and engage more people directly. The whole strategy of the business is about producing traceable, sustainable palm oil.
NBPOL has built its export success on the production of sustainable and traceable palm oil, certified and audited by the Round Table on Sustainable Palm Oil. Credit: NBPOL
What other new investments is NBPOL making as a result of its growth? A new bakery fats plants adjacent to our processing refinery in Liverpool, England, is going through commissioning at the moment, and a new fractionation plant in West New Britain is being built, specifically dedicated to [Italian confectionary giant] Ferrero. Ferrero wants palm oil products of a specific type, and they were prepared to do a joint venture and basically invest in us, mainly because of our sustainability credentials as well as the fact that we’ve got a good track record of quality and reliability. So, they could not only get exactly the product they needed, but they could trace it right back to source. I haven’t heard of anywhere else in the world where it’s been done. How about Ramu Agri Industries, which NBPOL acquired in 2008? There seem to be some positive signs as far as improved sugar production is concerned … Sugar production’s going well. We’re in the midst of the harvest at the moment, and it’s promising to be a successful season. We’re very pleased with the results we’re had from the basic renovation of our refinery, and we’re producing much higher yields for every tonne of molasses now, which is good news. On the beef side of things, we have a pasture improvement programme, and we’re in the process of building an extension to the feed lot, which will take the current capacity up from 1200 to 2000 head of cattle. The entire group has 20,000 head of cattle all up, all for domestic consumption, and we’ve got some very good orders coming in. There are great opportunities—at least 55% of the beef consumed in PNG is imported— and Jamie Graham domestic demand for beef is going
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NBPOL’s joint venture with global confectioner Ferrero—a fractionation plant in West New Britain Province. Credit: NBPOL
up. There are a lot more Papua New Guineans who’ve got higher disposable incomes than they have had in the past and that’s largely to do with the mining boom. So yes, the demand for beef has certainly gone up and some of our customers are expanding their operations, so we’re trying to keep up with their demand. Everything we produce we can sell. Are there any plans to add any new businesses, or will NBPOL be sticking to its guns: sugar, beef and palm oil? For the next five years, that’s what we’re looking at, but if there are opportunities with a market and we can make a profit, then we would look at something as long as it’s agriculture-based. If we felt that sorghum production, for instance, had a market here, and that it was going to turn a profit, albeit even a more modest profit, we would certainly look at that and present it to the Board. This is because some of the land in the Markham Valley is just not suitable for oil palm production, and nor would it be worthwhile expanding the sugar much more, mainly because of the distance in cartage. One of the reasons we’ve got good quality sugar is because of the good quality cane; its freshness. If we went further afield, we wouldn’t be able to guarantee that.