Entrepreneurs Archives - Business Advantage PNG

A Sydney-based company is looking to provide a ‘better deal’ for Papua New Guinea coffee farmers, and hopes to develop markets for PNG coffee in Australia, the US and China. But to do that, says Principal Pana Wiya, he needs a capital backer.

Village Coffee’s Pana Wiya

Coffee growers earn only 2 to 5 per cent of the retail price of coffee in supermarkets, or about K2.40 (A1.20¢) a kilogram, and that’s unjust, says the owner of Sydney-based Village Coffee, Pana Wiya.

‘It’s unjust because they do 90 per cent of the labour, and use their most fertile land to produce the beans. We aim to increase that income to about 30 to 35 per cent,’ he tells Business Advantage PNG.

Village Coffee is located in the Sydney, Australia, suburb of Padstow. So far Wiya has imported 15 tonnes of beans, from Wau in Morobe Province, and the Eastern Highlands.

Wiya has lived and worked in Sydney for 25 years, mainly in retail. He started Village Coffee when he realised that local growers receive a tiny fraction of the price of roasted coffee.

Roaster

Wiya has just purchased a 5kg roaster and is roasting, on average, 50 kg of coffee a week, which is packaged into 250g, 500g and 1kg bags. He sells directly to the public, via his website.

‘We’ve also been researching the US market and have registered our three brands with Integral Trade, a certification organisation similar to Fair Trade and the Rainforest Alliance’

It is early days. At the moment, he sources the beans from PNG exporters, but he says if he can obtain capital to process and market the beans, he wants farmers to set up their own co-operatives. He would then buy directly from them.

Export markets

In addition to Australia, Village Coffee has participated in two coffee expos in the southern Chinese city of Guangzhou.

‘The Chinese market is an especially challenging one, but it offers vast and exciting potential.

‘We’ve also been researching the US market and have registered our three brands with Integral Trade, a certification organisation similar to Fair Trade and the Rainforest Alliance, but which charges farmers and growers nothing to join.’

‘As well as the Village Coffee label for Australia, we’ve also developed Tenkyu Coffee and Kokoda Coffee labels for the US market,’ he says.

Expansion

Wiya set up his business four years ago. He is now seeking capital backing to expand his wholesale operations.

‘This includes new roasters and machines, employing marketing and coffee-knowledgeable personnel, improving labelling and the website, and developing a professional 10-year plan.’

Wiya aims to return K10 (A$4) per kilo to the growers, and an extra K2.50 (A$1) would be lodged into a superannuation fund.

‘Our initial estimates are that it would take two years before growers will see the sorts of benefits I’m talking about.

‘If you’re doing volume, you can more than cover your costs easily and pay the farmers more. Some coffee wholesalers are making healthy profits, so we can afford to pay PNG farmers more—and they do all the work.

‘This concept is not about maximising profits at the expense of lowly paid growers. Rather, it is to give them a fair share and to ensure their sustainability. The world of greed and money, and using other people for self gain, has to change.’

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The difficulty in finding authentic Papua New Guinea-made gifts for friends and colleagues overseas prompted Annette Sete to create her own fashion jewellery line. Two years on, she tells Business Advantage PNG her Lavagirl brand is looking to expand overseas.

‘I started Lavagirl Jewellery about two years ago to complement my ladies clothing line of the same name, which was part of the product line of gifts targeting visitors to East New Britain,’ says Lavagirl founder, Annette Sete.

Annette Sete

The jewellery range, which uses natural and recycled local products, includes earrings, necklaces, bracelets and bangles, hair pieces/clips, and anklets.

The women’s clothing line has been so successful she is now working on a men’s clothing range.

‘We also make gifts of various kinds and home decor pieces like candle holders, flower vases, basket purses, bilums, scarfs and shawls,’ she tells Business Advantage PNG.

Lavagirl products are marketed and sold though her marketing businesses, TMC and Maku Gifts.

Home business

What started as a home-based business, with Sete doing all the design, creating, marketing and selling, has now expanded.

‘There are 10 families working with me on a full-time basis: four on making jewellery and gifts, two on sewing, a shop assistant and three on beading and orders.

‘We fine-tune the products, making them fashionable and trendy.’

‘We, of course, guide them with quality and designs. I do all our designs and help out now and then at the workshop if I can get away from admin stuff and sales.

She is also tapping into women who make and sell jewellery at craft markets.

‘We fine-tune the products, making them fashionable and trendy; we package and label them and sell them in shops and online.’

Origins

Sete worked for five years as a journalist, and was then employed for a fuel company for seven years.

‘When I was with the fuel company, there was a lot of travel domestically and internationally,’ she says.

Annette Sete at work designing jewellery for her business. Credit: Skerah

‘I used to struggle to find PNG-made gifts that were authentic and which I could take to friends and business contacts overseas. Simple things like fridge magnets, jewellery and sarongs that didn’t require the lengthy processes for quarantine clearance.

‘Hence the business idea for PNG gifts, clothing pieces with PNG designs and jewellery from natural materials, like seeds, wood, natural fibre, sea shells, coconut shells, animal bones, dogs’ teeth, crocodiles’ teeth and feathers.’

Outlets

Lavagirl jewellery and Maku Gifts are sold through the Gazelle International Hotel and Bilas Hotspot in Kokopo, Wantok Clothing at Vision City Mall in Port Moresby and at the Jacksons International Airport. In Lae, Sete sells through Pasifika/Kenny Collections at the new Brian Bell Centre and she has an agent in Madang.

The Maku gift range is sold through Facebook, while the Lavagirl range is sold through Tictac.

‘Most of the sales were through social media initially.’

‘We are discussing a possibility a couple of retailers in Cairns and Brisbane, and I’d like to see our products on sale in other Pacific countries,’ she says.

Sales

Currently turnover is about K150,000 a year, she says.

‘Most of the sales were through social media initially but with our growing retailer arrangements we’re picking up more sales now in the last eight months through that avenue.

‘Having said that, the cost of running a business such as this and in Rabaul is extremely high,’ she says. ‘High taxes, difficulty in finding the right tools and skills for the business, the continuous power blackouts, which occur every day, and high internet costs are such a hindrance to business growth for us in small businesses.’

Sete learned the design and crafting skills from her grandmother but she says with an increasing demand for her products, she must do further research. ‘It’s a continuous process of learning and teaching myself and my team on designs, tools to use, material to work with, which designs sell better, latest trends and so on.’

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Small and medium-sized businesses need a more supportive taxation environment and better infrastructure, Millennium Water Managing Director, Achilles Peni tells Business Advantage PNG.

Delivery van for Owen Stanley Water. Source: Millennium Water

Achilles Peni’s water treatment business was one out of 10 companies selected to participate in Papua New Guinea’s SME Advancement Program, led by the World Bank, the Government and Bank South Pacific PNG.

The company sells purified water from Port Moresby. It has long-term plans to build the first natural mineral and spring water facility in Papua New Guinea.

Peni, who is a water and wastewater treatment technologist with over 26 years experience, says the company will then be positioned to bottle water directly from the base of the Owen Stanley Range near the Kokoda Track.

Market

There is a large potential market. According to a study by Water Aid, Papua New Guinea has the world’s worst access to clean water. It found that 4.8 million people in the country do not have clean water.

The Water Aid study says access to clean drinking water and sanitation is an issue for over half of Papua New Guinea’s population. The annual rainy season is also often followed by drought, which adds to the difficulties.

‘One way to support local producers is to increase taxes on imported goods.’

Lae

Millennium Water’s Achilles Peni Source: Millennium Water

Peni says the company’s Lae branch initially operated ‘very well’ but the economic downturn meant that it had to be closed down. He says he has been forced to adopt a defensive strategy.

‘Millennium Water is surviving, but the company isn’t thriving.’

Peni lists his greatest challenges as high freight costs, and the lax application of importation taxes. He says many local businesses struggle to get their products transported to the buyers in a reasonable timeframe.

One way to support local producers, he says, is to increase taxes on imported goods.

‘The Government must promote local products first by imposing an import duty tax. These actions will help create a level playing field.’

Peni says reducing freight costs and developing local infrastructure, especially rail and road, will also greatly aid PNG SMEs.

Contracts

Millennium Water has continued to be successful during the economic downturn by securing contracts with large companies, including PNG Power Limited and ExxonMobil.

‘Keeping the dispensers clean helps to maintain the light, sweet taste of the water.’

In addition, the company offers cleaning of its water dispensers free of charge, to attract and maintain its client base.

Keeping the dispensers clean helps to maintain the light, sweet taste of the water, which makes the product competitive, Peni explains.

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While finance, or access to capital, is an issue for young entrepreneurs, it is possible to build a business with little to no capital, says Roberta Morlin, founder and co-owner of KLM Consulting, which provides marketing research and technology consulting. Financial literacy is the key, adds Melbourne consultant, David Martin.

A finalist in 2015 Kumul GameChanger program, Roberta Morlin is a leader in PNG’s growing community of young tech-savvy entrepreneurs. With guidance, she moved from creating apps to running a consulting agency specialising in market research and technology.

Entrepreneur Roberta Morlin Source: Business Advantage International

‘I pretty much do a lot of work around artificial intelligence,’ she told the Business Advantage PNG Investment conference in Sydney last month.

‘When I first started in 2015, I had 30 different ideas and I had to validate (reduce) those ideas down to 15. I had to further validate over the next 15 months down to four, which I am currently working on,’ she said.

Morlin also studied at Draper University in Silicon Valley and is also a mentor with the 2017 Kumul Gamechanger program.

Health and education

Morlin believes the PNG health and education sectors provide opportunities for young IT entrepreneurs. Her mentoring network now has more than 70 members.

‘We sit down and we talk with these youth and we understand their passion so that we can match them to globally-funded opportunities.

‘You can build a business with little to no capital, which is what we’re teaching.’

‘Fifty per cent of our population are youths, so we need to prepare them for the jobs of the future—and not only what they are currently studying.

‘We sit down and talk to small and medium-sized businesses, and youth who want to create different opportunities.’

‘Funding is an issue,’ she says, ‘but you can build a business with little to no capital, which is what we’re teaching.’

Morlin advises budding entrepreneurs that if they think that capital ‘is always an issue when you rock up to the banks, maybe you should think about how you can start small and very lean’.

‘Entrepreneurs should just take the plunge and slowly build a business.’

She says that with savings of just K500, you can start an online business tomorrow and keep growing until you’ve used that capital until you build something big.

‘It’s always what you’re passionate about growing, as opposed to understanding market trends.’

Financial literacy

Dr David Martin. Credit: Melbourne Polytechnic

Entrepreneurs should just take the plunge and slowly build a business, rather than wait for a bank loan or an aid grant, according to Dr David Martin, Chairman of M·CAM Inc., which provides financial advice in developing countries, and Creator of the CNBC IQ100 equity index.

Martin’s Heritable Innovation Trust has been involved in the development of community projects and companies in Rabaul. This includes Amruqa (formerly Pacific Spices), which exports spices and essential oils.

He says communities often believe that they need aid or grants to develop their local resources.

‘It’s far better,’ he tells Business Advantage PNG, ‘that they get supply agreements. The focus needs to be on the purchasing side.’

Martin says financial literacy is the key to business success, particularly understanding capital markets, finance corporations, asset holding, leasing corporations, and other developer-related entities.

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After 20 years building a successful transport company, Mapai Transport founder Jacob Luke is exploring ways to correct PNG’s trade imbalance with NZ, and providing training opportunities for young Papua New Guineans.

Mapai’s Jacob Luke and Grant Wakerley.

After commencing operations in 1985 with a single vehicle, Mapai Transport now has a staff of more than 300, and a fleet of 70 prime movers, 170 trailers, 20 delivery trucks (spread between Lae, Goroka and Mt Hagen, and Port Moresby), side lifters, forklifts and more than 900 containers.

In 2008, founder Jacob Luke set up Mapai Customs & Forwarding Agency services, primarily as an added value service to ensure the smooth movement of Mapai’s clients’ freight into PNG.

Now, Luke is looking south for the next venture, and the scope is broader than transport and logistics.

A NZ company, Mapai (NZ) Ltd. was formed 12 months ago, with Grant Wakerley appointed International Logistics Manager.

NZ Venture

‘Jacob has clearly given the board the mandate to move the company from just a purely transport and logistics business to a training business that does transport and logistics to pay the bills,’ Wakerley tells Business Advantage PNG from his office in Auckland.

‘This is a fundamental mind shift within the business and establishing a branch in NZ is part of that shift.

‘The team is currently exploring possibilities of trade within the Pacific region.’

‘The main driver for establishing an office in NZ is to boost export and import activities between PNG and NZ, particularly those companies that are working on exporting products from PNG to NZ.’

Pacific agriculture

Mapai Transport is one of the major freight providers along PNG’s Highlands Highway. Credit: Mapai Transport

The team is also currently exploring possibilities of trade within the Pacific region, particularly focused on the agricultural industry.

‘Mapai would like to participate in assisting this trade to happen,’ says Luke.

‘The NZ government has a number of initiatives around training for young Papua New Guineans, especially in agriculture, horticulture and science.’

‘We don’t necessarily have be the ones actually growing or be the end supplier, but we are hoping to be the catalyst to seeing things happen,’ adds Wakerley.

‘The driver is not income for Mapai. We want to see PNG create employment and income generating opportunities, particularly for the families in the remote rural areas,’ says Luke.

Training

‘They also want to set up ‘good solid training opportunities’ for Mapai staff in NZ, ‘giving the young people opportunity to learn skills that will see them set up for life.’

‘The NZ government has a number of initiatives around training for young Papua New Guineans, especially in agriculture, horticulture and sciences. Mapai sees these as growth areas that PNG must take advantage of,’ says Luke.

Mapai executives have been talking to the Pacific Cooperation Foundation and the Pacific Trade and Invest, which link projects within the Pacific nations to countries requiring certain produce and high value-added products.

‘We want to ensure that PNG is in that mix’, says Wakerley.

Wider focus

‘The appointment of Kevin Christie as CEO of the Mapai Group based in Lae means Jacob and I can now focus our attention on the wider programme, which also includes a development project in Monokam in the Enga Province,’ notes Wakerley.

The Monokam project involves building infrastructure, including schoolrooms, teachers’ housing, and community facilities, including an all weather market.

‘We also helped negotiate with the Asian Development Bank to fund and build a health clinic with maternity facilities,’ says Wakerley.

According to Statistics New Zealand, NZ exported NZ$ 183.74 million (K412 million) worth of goods in the year to September 2016, while it imported NZ$10.52 million (K23.59 million) worth of goods from PNG. The top PNG exports to NZ were coffee tea and spices (NZ$6.71 million/K15.05 million). PNG’s main import from NZ was meat (NZ$29.32 million/K65.75 million).

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Domestic and global demand for coconut products will see this Papua New Guinea producer relocate, expand and create new lines. The Director of MaxtoneHaus, Ernestine Maxtone-Graham, talks to Business Advantage PNG.

Maxtone Haus’ Ernestine Maxtone-Graham

In early 2015, Ernestine Maxtone-Graham returned to PNG to join her husband, Mungo Maxtone-Graham, with the intention of developing a business, MaxtoneHaus, based on the increasing demand for coconut products.

‘I was coming back to PNG and I wanted to get involved with coconut because I used coconut-based products while we lived in Australia,’ New Ireland-born Ernestine tells Business Advantage PNG.

‘Also, copra helped put me and some of my siblings through school. My family used to produce copra, as did so many families in PNG.’

Ernestine and Mungo started their coconut oil processing plant at Kanudi in Port Moresby in June 2015, buying copra from local farmers along the coastal villages in the Abau District of the Central Province, about a five-hour drive from the capital.

‘We started buying coconuts which had been sun-dried, but now we buy whole coconuts which we hot-air dry ourselves. They come dehusked. The shell is used for fuel, the meat is pressed for oil and when we’ve finished, the meal that comes out is sold to piggeries. No wastage.’

Relocating

The wife and husband team chose to base themselves in Port Moresby because it would be easier to process, market and ship from the capital. But that is about to change.

‘One of the continuous challenges is having consistent supply. We’re now at the stage of deciding to relocate closer to the source of supplies.

‘Moving to Kimbe will not just cut down travel time, being closer to the source of her raw materials means she can ensure consistent quality.’

‘So. we will be based in Kimbe [in West New Britain] by the end of the second half of the year. That will prove another challenge, because getting the products out of Kimbe is not easy, as there aren’t as many ships coming to Moresby from there.’

Moving to Kimbe will not just cut down travel time; being closer to the source of her raw materials means she can ensure consistent quality.

‘We’re getting coconut from a variety of farmers and, if we are closer to the source, we know where the coconut is coming from. We can also liaise with the Coconut Industry Corporation.’

MaxtoneHaus products

Farmers are able to see what is happening to their product and can be trained to produce higher quality coconut.

‘All villagers know how to grow coconuts, but not all know how to grow them properly,’ she says.

The processing will done in Kimbe and there will be a warehouse in Port Moresby.

Domestic outlets

MaxtoneHaus products are sold throughout PNG through City Pharmacy Group, A Little Something From PNG at Jackson’s International Airport and into North Queensland through the supermarket chain, Ibis Supermarket.

She says CPL founder, Mahesh Patel, gave her good advice and encouragement.

‘Before we actually started production we talked to him about how we could enter the market with our range.’

‘We’re planning to take our products internationally.’

Their initial range includes oils and soaps, although Ernestine says she is planning on two new products by the end of 2017: coconut cooking oil and coconut ointment.

‘Coconut oil has a lot of medicinal properties. I’m not going to say it will cure diabetes, but it has been used as an ointment.’

She says coconut oil contains lauric acid and monolaurin, which can kill harmful pathogens like bacteria, viruses and fungi. When applied to the skin, coconut oil offers protection from microbial infections that can get into open wounds.

‘It may be possible to use it as an ointment, particularly in villages where medicines are hard to come by,’ she says.

‘We’re planning to take our products internationally. We’ll take our products to the Pasifika Festival and, once people hear about MaxtoneHaus, we’ll get the sales,’ she confidently predicts.

Global potential

She believes PNG has the potential to capitalise on the global shortage of coconuts, which is the result of a major boom in coconut consumption around the world, the long-term effect of natural disasters and demand outstripping the pace of coconut trees’ growth.

Within the next five years, she hopes to be a big manufacturer of coconut cooking oil and ointments throughout the Pacific.

‘By the end of 2017, we’ll be up and running with coconut cooking oil and we’ll be giving Indonesia a run for its money with its cheap imports coming into PNG.’

Global demand for coconut

PNG ranks as the world’s 7^th producer of coconuts, according to figures for 2014. It produces 1.2 million tonnes annually, behind Indonesia topping the rank with 18.3 million tonnes, followed by the Philippines (1.35 million tonnes).

Total world supply of coconut was 61.4 million tonnes in 2014, according to the Food and Agriculture Organisation of the UN.

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A young Papua New Guinean entrepreneur is bringing Silicon Valley to PNG to help boost financial inclusion in the country. Day One Investments’ Shane Ninai tells Business Advantage PNG of his plans to encourage the use of the virtual currency, Bitcoin.

Day One Investments’ Shane Ninai addresses a Blockchain event in London earlier this year.

‘For the first time in history, we have the technology to bank the unbanked,’ 25-year old Shane Ninai, Managing Partner of Day One Investments, tells Business Advantage PNG.

With only 20 per cent of the country holding bank accounts, Papua New Guinea is an ideal place to create an alternative low-cost banking system, he says, but notes it is likely to take up to 10 years before the technology will become fully mainstream in PNG.

That technology is built on two emerging, internet-based platforms: the bitcoin virtual currency and Blockchain, which manages online transactions (see definitions below).

Regulation critical

‘The first step [in PNG] is to create all the regulatory “sand-boxes”,’ says Ninai, ‘which involves having the Bank of Papua New Guinea experiment with this new technology.’

In emerging markets, Ninai told a Blockchain conference in London in January, a regulator-led model is the only way to ensure that these systems have value and are transacted at scale. The regulators’ appreciation of this innovation and a willingness to experiment is key.

Why PNG?

Ninai pointed out that PNG is a country dependent on close human relationships—where $5000 dollars in cash may not mean as much as three pigs and a shell necklace.

‘Informal and alternative economies and governance systems … are deeply ingrained in our culture and are still alive and well; and the Blockchain allows us for the first time to capture this activity,’ he said in his address.

‘Day One Investments is scheduled to close its fundraising within the next month, having secured capital commitments from a reputable anchor PNG investor along with international investors.’

‘Instead of trying to fit the unbanked into a narrow financial system, Blockchain allows us to create and capture these alternative economic systems that bypass normal markets.’

Ninai says that while this technology has taken off in the US and Europe, the real value is to figure out how to get it to scale in developing nations, where people are most excluded from formal financial systems.

Entrepreneur program

In 2015, Ninai participated in the Kumul GameChangers entrepreneurship program, where he was selected for the highly competitive Silicon Valley entrepreneurial accelerator program at Draper University. After graduating, Ninai joined Draper University staff as an entrepreneur-in-residence, mentoring some 170 innovative companies.

spending-bitcoins Co-founder of Day One Investments, a Silicon Valley-based venture capital fund investing in blockchain technology companies, Ninai’s partner is Tim Draper. His company, Draper Associates, aims to transform industries with new technologies, and to build platforms for extraordinary growth, jobs, and wealth creation.

Ninai says Day One Investments is scheduled to close its fundraising within the next month, having secured capital commitments from a reputable anchor PNG investor, along with international investors.

He says he has identified East New Britain Province, where shell money is a form of accepted currency, as a potential pilot province.

‘To this day, microfinance institutions and savings and loans societies are willing to provide loans against this shell money because they recognise it as currency,’ he says.

‘For microfinance institutions, this technology has a lot of potential and that’s where we’re seeing the most interest.’

Shane Ninai will be a guest speaker at the 2017 Business Advantage Papua New Guinea Investment Conference on 7 & 8 September in Sydney.

What are Bitcoin and Blockchain?

Bitcoin is a virtual currency and payment system, which uses a software program to record and pay for things without a third-party broker, like a bank or government. Users install a bitcoin wallet app on their phone or computer, and buy the virtual currency from a bitcoin exchange. Its promoters say bitcoin is ideal for people in developing countries, who might have mobile phones but not bank accounts.

Blockchain simply refers to a bookkeeping method that chains together entries so that they are very difficult to modify later. Among the world’s leading companies now using Bitcoin and Blockchain technology are IBM, Expedia, Maersk and Dell.

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The Editor of Stella magazine, Amanda Donigi, claims Papua New Guinea risks losing its young entrepreneurs unless business conditions are enhanced. Her comments are echoed by House of Xen founder, Xenia Peni.

Stella Founder, Amanda Donigi. Credit: ANU

Donigi, who founded Stella magazine in 2012, told a seminar on entrepreneurship at the recent annual Australia–PNG Business Council forum that it would be ‘a great loss’ if the ease of doing business in PNG isn’t improved.

‘There is a generation of PNG go-getters who are hot on our heels,’ she said.

‘It would be a great loss to our development and our growth to discourage them from chasing their dreams in business because we didn’t improve the business environment for them at this time, when we had the power to do it.’

She described it as ‘disappointing’ that PNG ranked 119^th in the World Bank’s Ease of Doing Business rankings in 2016.

She says she would like to see PNG’s rankings rise to 20, ‘or above’.

Readers

Dorigi said the purpose of establishing her magazine was to bring out stories from the perspective of women in Papua New Guinea and the Pacific Islands.

It has attracted readers far beyond PNG, however.

The five-year old magazine now has readers in Australia, New Zealand, the Pacific, Singapore, Malaysia, Abu Dhabi and Dubai.

Stella is available on airlines and in hotels across the world through Media Carriers, complementing a digital app launched last year, when the magazine was also launched in Australia–where it is now available ‘in 500 newsagencies across the country’.

‘They want to vote in the upcoming elections, they want to dress how they want to and not be harassed.’

‘Our PNG readers are educated, they’re working, and have disposable incomes,’ she said.

‘Our readers are conscious of their society and openly examining it. Our readers don’t want to be second-class citizens. Why would they? They want better healthcare, they want to vote in the upcoming elections, they want to dress how they want to and not be harassed.’

Running costs

House of Xen founder, entrepreneur Xenia Peni.

Entrepreneur Xenia Peni, founder of the hair and beauty services business, House of Xen, agreed that the capital and running costs of setting up a business in PNG are expensive. Rents, too, are a major problem.

‘So a lot of SMEs operate out of homes, pop-up shops or online,’ she told the meeting.

‘Customers are demanding natural, plant-based products.’

Her business, she said, relies on social media for its sales platform. It has 28,000 subscribers, of whom 30 per cent are male.

The growth in male customers, she says, follows similar trends over the last five years in more developed countries, such as the US, Europe and Australia.

Peni said demand for her products was not restricted to Port Moresby, with inquiries coming from Lae, and Mt Hagen.

‘It’s only a matter of time before we can penetrate those markets,’ she said. ‘But there are significant challenges ahead.’

She said customers are demanding natural, plant-based products. That meant a ‘massive opportunity for hair and beauty industry to contribute to our economy’.

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Five years after opening the first of three Duffy’s cafés in Port Moresby, owner and entrepreneur Travers Chue is preparing to expand overseas, marketing Papua New Guinea specialty coffee and premium health products.

Duffy’s Travers Chue.

‘When we first started Duffy’s, our goal was to create the first specialty coffee house in PNG, but now we want to manufacture premium health products in PNG and export them to China and across the globe,’ says Duffy’s owner, Travers Chue.

Chue tells Business Advantage PNG he plans to open his first outlet in China’s southern city of Guangzhou by the middle of 2018. At present, he is finalising an exact location.

The project is being funded through the family-owned, PNG-based parent company, Pacific Industries Ltd.

Starting in China

‘We are planning to kick off very modestly in China with one store, which will be approximately 150–200 square metres.

‘Once we get our feet wet and learn the ropes of doing business in China, then—only then—do we plan to spread our wings.

‘The plan is to use our café business, which hopefully will have several outlets, to distribute these products to the Chinese market.

‘We have so much potential for exports with our rich and resourceful land. Businesses in PNG should be focusing on capitalising on this … rather than just relying on the domestic market.’

‘These products will range from coconut water from Rabaul—as we can piggy back off our existing Pacific Industries beverage manufacturing plant situated in Rabaul town—cocoa from Bougainville to make chocolate, bottled water from one of PNG’s many pristine water sources and we are even looking at organic honey from the Highlands.’

Export potential

Chue is a firm believer in PNG and the export potential of its pristine products.

‘We have so much potential for exports with our rich and resourceful land. Businesses in PNG should be focusing on capitalising on this and trying to expand their operations outside of the country rather than just relying on the domestic market.’

Chue’s approach to expanding to China is based around being a coffee shop and coffee brand that originates ‘from this exotic and mysterious land called PNG’.

The secret, he says, is producing consistently high quality beans.

He praises the Coffee Industry Corporation for its annual PNG Cupping Competition.

‘We are trying to teach the farmers that, if their coffee is getting higher cupping scores due to implementing and following strict procedures and practice, then we—the roasters—are willing to pay higher prices for their hard work.

‘Growers need to see that there is more profit to be made in producing higher grade coffee, from which they can earn more bang for buck per kilo of cherry.’

He says it is the only way coffee farmers can overcome poor infrastructure, erratic weather conditions, deteriorating tools and minimal training.

‘Most people who know PNG most probably know the country for its great coffee—and we intend serving them the best premium grade specialty coffee that PNG has to offer. This is going to be key to success in China.

‘It makes me very proud to look back at my family’s history and to know that something my grandfather started before WWII on Rabaul now has the potential to go international.’

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A Sydney-based company is looking to provide a ‘better deal’ for Papua New Guinea coffee farmers, and hopes to develop markets for PNG coffee in Australia, the US and China. But to do that, says Principal Pana Wiya, he needs a capital backer.

Village Coffee’s Pana Wiya

Village Coffee is located in the Sydney, Australia, suburb of Padstow. So far Wiya has imported 15 tonnes of beans, from Wau in Morobe Province, and the Eastern Highlands.

Wiya has lived and worked in Sydney for 25 years, mainly in retail. He started Village Coffee when he realised that local growers receive a tiny fraction of the price of roasted coffee.

Roaster

Wiya has just purchased a 5kg roaster and is roasting, on average, 50 kg of coffee a week, which is packaged into 250g, 500g and 1kg bags. He sells directly to the public, via his website.

‘We’ve also been researching the US market and have registered our three brands with Integral Trade, a certification organisation similar to Fair Trade and the Rainforest Alliance’

Export markets

In addition to Australia, Village Coffee has participated in two coffee expos in the southern Chinese city of Guangzhou.

‘The Chinese market is an especially challenging one, but it offers vast and exciting potential.

‘As well as the Village Coffee label for Australia, we’ve also developed Tenkyu Coffee and Kokoda Coffee labels for the US market,’ he says.

Expansion

Wiya set up his business four years ago. He is now seeking capital backing to expand his wholesale operations.

‘This includes new roasters and machines, employing marketing and coffee-knowledgeable personnel, improving labelling and the website, and developing a professional 10-year plan.’

Wiya aims to return K10 (A$4) per kilo to the growers, and an extra K2.50 (A$1) would be lodged into a superannuation fund.

‘Our initial estimates are that it would take two years before growers will see the sorts of benefits I’m talking about.

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The difficulty in finding authentic Papua New Guinea-made gifts for friends and colleagues overseas prompted Annette Sete to create her own fashion jewellery line. Two years on, she tells Business Advantage PNG her Lavagirl brand is looking to expand overseas.

Annette Sete

The jewellery range, which uses natural and recycled local products, includes earrings, necklaces, bracelets and bangles, hair pieces/clips, and anklets.

The women’s clothing line has been so successful she is now working on a men’s clothing range.

‘We also make gifts of various kinds and home decor pieces like candle holders, flower vases, basket purses, bilums, scarfs and shawls,’ she tells Business Advantage PNG.

Lavagirl products are marketed and sold though her marketing businesses, TMC and Maku Gifts.

Home business

What started as a home-based business, with Sete doing all the design, creating, marketing and selling, has now expanded.

‘There are 10 families working with me on a full-time basis: four on making jewellery and gifts, two on sewing, a shop assistant and three on beading and orders.

‘We fine-tune the products, making them fashionable and trendy.’

‘We, of course, guide them with quality and designs. I do all our designs and help out now and then at the workshop if I can get away from admin stuff and sales.

She is also tapping into women who make and sell jewellery at craft markets.

‘We fine-tune the products, making them fashionable and trendy; we package and label them and sell them in shops and online.’

Origins

Sete worked for five years as a journalist, and was then employed for a fuel company for seven years.

‘When I was with the fuel company, there was a lot of travel domestically and internationally,’ she says.

Annette Sete at work designing jewellery for her business. Credit: Skerah

Outlets

The Maku gift range is sold through Facebook, while the Lavagirl range is sold through Tictac.

‘Most of the sales were through social media initially.’

‘We are discussing a possibility a couple of retailers in Cairns and Brisbane, and I’d like to see our products on sale in other Pacific countries,’ she says.

Sales

Currently turnover is about K150,000 a year, she says.

‘Most of the sales were through social media initially but with our growing retailer arrangements we’re picking up more sales now in the last eight months through that avenue.

The post Entrepreneur: Annette Sete, fashion designer appeared first on Business Advantage PNG.

Small and medium-sized businesses need a more supportive taxation environment and better infrastructure, Millennium Water Managing Director, Achilles Peni tells Business Advantage PNG.

Delivery van for Owen Stanley Water. Source: Millennium Water

The company sells purified water from Port Moresby. It has long-term plans to build the first natural mineral and spring water facility in Papua New Guinea.

Market

‘One way to support local producers is to increase taxes on imported goods.’

Lae

Millennium Water’s Achilles Peni Source: Millennium Water

Peni says the company’s Lae branch initially operated ‘very well’ but the economic downturn meant that it had to be closed down. He says he has been forced to adopt a defensive strategy.

‘Millennium Water is surviving, but the company isn’t thriving.’

One way to support local producers, he says, is to increase taxes on imported goods.

‘The Government must promote local products first by imposing an import duty tax. These actions will help create a level playing field.’

Peni says reducing freight costs and developing local infrastructure, especially rail and road, will also greatly aid PNG SMEs.

Contracts

Millennium Water has continued to be successful during the economic downturn by securing contracts with large companies, including PNG Power Limited and ExxonMobil.

‘Keeping the dispensers clean helps to maintain the light, sweet taste of the water.’

In addition, the company offers cleaning of its water dispensers free of charge, to attract and maintain its client base.

Keeping the dispensers clean helps to maintain the light, sweet taste of the water, which makes the product competitive, Peni explains.

The post Improvements to taxes and infrastructure crucial for Papua New Guinea SMEs, says Millennium Water MD appeared first on Business Advantage PNG.

While finance, or access to capital, is an issue for young entrepreneurs, it is possible to build a business with little to no capital, says Roberta Morlin, founder and co-owner of KLM Consulting, which provides marketing research and technology consulting. Financial literacy is the key, adds Melbourne consultant, David Martin.

Entrepreneur Roberta Morlin Source: Business Advantage International

‘I pretty much do a lot of work around artificial intelligence,’ she told the Business Advantage PNG Investment conference in Sydney last month.

Morlin also studied at Draper University in Silicon Valley and is also a mentor with the 2017 Kumul Gamechanger program.

Health and education

Morlin believes the PNG health and education sectors provide opportunities for young IT entrepreneurs. Her mentoring network now has more than 70 members.

‘We sit down and we talk with these youth and we understand their passion so that we can match them to globally-funded opportunities.

‘You can build a business with little to no capital, which is what we’re teaching.’

‘Fifty per cent of our population are youths, so we need to prepare them for the jobs of the future—and not only what they are currently studying.

‘We sit down and talk to small and medium-sized businesses, and youth who want to create different opportunities.’

‘Funding is an issue,’ she says, ‘but you can build a business with little to no capital, which is what we’re teaching.’

Morlin advises budding entrepreneurs that if they think that capital ‘is always an issue when you rock up to the banks, maybe you should think about how you can start small and very lean’.

‘Entrepreneurs should just take the plunge and slowly build a business.’

She says that with savings of just K500, you can start an online business tomorrow and keep growing until you’ve used that capital until you build something big.

‘It’s always what you’re passionate about growing, as opposed to understanding market trends.’

Financial literacy

Dr David Martin. Credit: Melbourne Polytechnic

He says communities often believe that they need aid or grants to develop their local resources.

‘It’s far better,’ he tells Business Advantage PNG, ‘that they get supply agreements. The focus needs to be on the purchasing side.’

The post Building a business in Papua New Guinea with little or no capital appeared first on Business Advantage PNG.

Software entrepreneur Samson Korawali has helped establish five start-ups and a digital consultancy located in Australia and Papua New Guinea. He tells Business Advantage PNG that the country can benefit from developing its online business capacity.

Samson Korawali says online business can improve the country. Credit: Reelae

‘Website development and SEO (search engine optimisation) is really lacking in PNG at the moment.

‘When you Google someone’s business, or try to find local information, there’s hardly anything relevant and up to date. It is really frustrating for me, and I am sure for others too.

‘This is a major problem, but at the same time, a huge opportunity for businesses to utilise digital strategies and integrate SEO.’

‘Exporting goods and services via online platforms would positively impact our country.’

‘Investing into the right technologies that align with the business goals can transform a business, if executed by the right people and strategy. Exporting goods and services via online platforms would positively impact our country and currency. It will also help generate more jobs.

‘Our Internet Payment Gateway limits this, though, and I am actively working with BSP (Bank South Pacific) on a project to make this possible for us all.’

Consulting

Korawali grew up in Lae and moved to Sydney in 2006 to train in 3D game development, multimedia and mobile app development.

After three years working as an employee in Sydney, he started his own business, KK Consultancy, which is registered in PNG and Australia. It has been operational for six years.

‘We provide innovative digital solutions, servicing clients across the mining, government, corporate and educational sector. We’ve done 3D visualisations for mining companies, showing exploration and rehab simulations, website development and SEO, branding, software development, mobile app development and multimedia.’

‘Let’s increase opportunities.’

Korawali says his clients range from some of the biggest mining companies to start-ups.

‘I am trying to encourage start-up companies to use online platforms to sell their products and drive visibility.

‘Let’s increase opportunities to do business, not just locally, but across the country and even internationally.’

Start-ups

Korawali has branched out into starting up other businesses. The first was a biometric solution for monitoring employee hours.

‘Instead of clocking in manually, we have a face recognition system that employees use to clock in and out by looking into the device.’

Another business, registered in America, is called RunwayBuy, a fashion app.

‘Another app is called GoFood PNG.’

‘People can attend fashion shows live or streamed online and buy in real time when they take a photo off the runway.

‘It creates a platform for designers to showcase their designs on the runway and then sell their designs at these shows through the app.

Another app is called GoFood PNG.

‘It is almost like Uber Eats in Australia but it is the PNG version. We have partnered up with some of the biggest restaurants in Port Moresby. We have a staff of five.

‘We have drivers who go to restaurants, pick up the food after you order it online, and deliver it to your doorstep. That has been going on for about a year and half now.

‘Most recently, we have partnered with a few grocery stores, so people can order online and have their groceries delivered to their doorstep.’

Learning online

Korawali’s biggest project is a learning management system (LMS) called Reelae: ‘a platform that a student and teacher can interact on. Institutions sign up to this service, student accounts are issued, and the student can interact with the teacher and other students in their classes.’

The teacher can share the lectures, take attendances, mark group work assignments, and facilitate forums.

‘Our analytics engine (using Artificial Intelligence) is robust and powerful, sifting through a student’s interaction and activity while using Reelae. Stats are sent to the teacher showing their performances and activity.’ Version 1.0 is now ready to be trialed across Australia and version 2.0 is due for market release later on this year.

Staff from the University of PNG and some Australian universities have already signed up to trial version 1.0, which is being provided free.

Capital raising

Korawali is looking to raise capital to complete the development of version 2.0 and prepare for commercialisation later this year across Australia and PNG.

Eventually he wants to expand into Asia, Europe and the US, then have an initial public offering (IPO) in the US. He believes that the current LMSs on the market have severe limitations.

‘Even Stanford and Harvard are using legacy learning systems and we want to disrupt that market.

‘We are looking to grow organically, be patient and strategic so we don’t grow too quickly.

‘We want to compete with the “big guys” overseas.’

The post Papua New Guinea business can greatly benefit from improving online capacity says entrepreneur appeared first on Business Advantage PNG.

The PNG APEC Study Centre is to be officially opened next week at the National Research Institute. According to Dr Thomas Webster, Professorial Research Fellow at the NRI, the aim of the centre is to improve the understanding and enabling of innovation in Papua New Guinea.

Dr Thomas Webster describes the APEC Study Centre’s focus on innovation. Source: BAI

‘Research helps us to understand how we are doing things, identify areas to introduce innovations and do things better,’ Webster, Professorial Research Fellow under the Governance Research Program at the NRI, told the recent Business Advantage PNG Investment Conference in Brisbane.

Webster, who is also a former Director of the NRI, says the mandate of the centre is to support research that advances new ideas and supports policy ‘across a range of economic, regional trade and investment issues’.

The emphasis will be on ‘evidence-based’ research.

‘We recently hosted the PNG APEC Study Centre Consortium Conference in May as part of PNG’s commitment as host of APEC 2018.

‘It was the first conference of its kind in PNG.’

‘Innovation can be defined as a new idea or another way of doing something.’

The conference’s theme was ‘Harnessing growth in an increasingly connected region’, with a focus on innovation, technology and digitalisation.

‘It brought together 100-plus researchers, practitioners from industry and the development sector, and policymakers,’ Webster said.

The issues addressed included:

How to increase access to mobile technology in rural communities
Cacao producers in PNG using technology to share price data and processing techniques to ensure better returns for their cacao.
How can blockchain track the condition of perishable goods and improve supply chains in PNG.
How do we ensure growth is inclusive for all groups including: Women and minorities
How can reform in the energy market increase competition and access in the electricity market?

Lenses

Webster said innovation can be defined ‘as a new idea or another way of doing something’.

He noted that there are different types of research.

‘How does research impact innovation? Peer research is a structured form of inquiry aimed at enhancing general knowledge.

‘Applied research, like what the NRI does, is using that knowledge to solve problems.

‘The APEC Study Centre will be examining access and competition issues in the energy market and how costs can be reduced.’

[It is] looking at current issues and saying: “How can that knowledge help bring about improvements?”

‘Basically, what we do is bring data together, put that into a particular structured form to give information and, using our different lenses and ways of looking at the data, identify an innovative way of doing better.

‘Through that process, new ideas or ways of doing business emerge.’

Webster said the approach will be multi-disciplinary and bring together specialists from areas such as finance, economics, political theory and sociology.

‘We bring them to acknowledge, analyse and understand better the underlying factors for a given problem or issue.

‘We also have what I call—and most Papua New Guineans call—the “lived-in experience of Papua New Guineans”.

‘Looking at those things through Papua New Guinean lenses and helping to understand the issues in a Papua New Guinean context.’

Issues

Webster said the APEC Study Centre will be examining access and competition issues in the energy market and how costs can be reduced.

It will also look at access and cost issues in the water sector.

Other issues to be examined will be:

How the PNG Government can support a stronger trading environment for business and advocate for reduced tariffs on PNG made goods.
How to encourage a stronger domestic economic environment.
How to simplify the tax system and reduce the burden of tax reporting on business.
How blockchain has the potential to improve trading, ledgers and supply chain for a range of goods and services.

The post APEC Study Centre for improving innovation in Papua New Guinea to open appeared first on Business Advantage PNG.

They’re creative, they’re tech-savvy and they’re keen to share their stories. In the first of a three part series, Lisa Smyth speaks to six Papua New Guineans who are at the forefront of the digital push in PNG.

Film maker Katherine Reki

Papua New Guinea’s digital revolution may seem slow compared to other parts of the world, but that doesn’t mean that it’s any less exciting.

According to the latest instalment of Hootsuite’s annual world report, Digital in 2018, there are over 900,000 internet users in PNG, which accounts for 11 per cent of the population.

‘Hetri describes himself as a ‘typical village kid’.’

PNG bloggers, podcasters, filmmakers and social media gurus are making waves both inside and outside the country with their homegrown approach to digital creation, education and storytelling.

Village kid

Digital marketing strategist Ian Hetri

Ian Hetri is Brand and Digital Marketing Strategist for Linkpad Technologies and Publishing.

He is based in Port Moresby, but was originally from Morobe.

Hetri describes himself as a ‘typical village kid’ who was selected under the Pacific Island Leadership program to study at the University of Hawaii in 2014.

On his return to PNG, he started his own branding and marketing agency, LinkPad Technologies & Publishing.

‘Companies like my own, and others such as Blockchain Pacific and groups like the PNG ICT Cluster, are doing lots to advocate and drive change in this country,’ he says.

‘Young, vibrant, industrious leaders are emerging.’

Content

Hetri has really made his mark as a content creator and thought leader on LinkedIn.

He has surpassed 10,000 followers since he began posting original articles and engaging on the platform eight months ago.

‘My choice to be active on LinkedIn was as a result of Facebook tweaking its algorithm and my business page getting hit hard.

‘Now, I generate high-quality leads every week on LinkedIn using content marketing.

‘I was pretty surprised I got picked.’

In November 2018, Hetri organised the first ever LinkedIn Local PNG event, with over 300 attendees.

LinkedIn Local is a global networking series that has occurred in 150 cities around the world.

Stories

Film maker Katherine Reki is based in Madang.

She says she has dreamt of having her stories made into a film, but never thought she would be the one writing, directing and editing a movie from start to finish.

In 2015, however, she entered the Commonwealth Foundation Pacific Shorts competition (commonwealthwriters.org/pacific-voices) and won.

‘I was pretty surprised I got picked. I had a lot of self-doubt, but after going through the process of making the film I realised I can do this sort of work.’

Reki’s digital short film, My Mother’s Blood, shines a spotlight on sorcery-related violence in PNG and how women are valued in society.

‘A Divine Word University graduate and the mother of four children, she has had her film screened in Hawaii, Samoa, Fiji, New Zealand, the UK—and, finally, in her home country at the 2018 PNG Human Rights Film Festival.

‘A lot of people have thanked me for making the film and encouraged me to do more movies to highlight social issues in PNG. It was important to make this film,’ she says.

Read the second part of our series here.

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In the last part of her three-part series about digital entrepreneurs, Lisa Smyth speaks with two inspiring Papua New Guineans who use blogging to empower their communities.

Credit: Carole Cholai

Blogger Carole Cholai is based in Kokopo.

Four years ago Carole, originally from Manus and a Unitech Computer Science graduate, entered a blogging competition that focused on agriculture and information and communication technology (ICT) stories.

As one of three encouragement award winners, she was flown to Kenya, Africa, to attend a social media training and she found her interests shifting.

‘I had spent 10 years working with computer hardware, but I realised how powerful blogging and social media were becoming. I became passionate about upskilling and empowering women and children to use ICT to improve their lives,’ she says.

A single parent of three children, two girls and a boy, Cholai developed ‘Girls in ICT Tech Week’ in 2015, where 20 secondary school girls gained ICT skills and knowledge. The program continues to run annually, and over 60 girls have already participated.

The work inspired her to begin her own blog, sharing ICT jobs, scholarships, events and opportunities from across the region.

‘There is a lot more access to the internet now through mobile phones, so I hope PNG ICT Meri can grow beyond just being a blog into a full website and brand, inspiring PNG girls to take up jobs in ICT,’ she says.

Funding the extraordinary in the ordinary

Scott Waide

Scott Waide is a journalist and blogger based in Lae.

In 2017, he celebrated 20 years working in TV, and today he is the highly respected Lae bureau chief for EMTV. It was also in 2017 that he decided to start his blog, Inspirational Papua New Guineans.

‘Working in news you focus a lot on negative stories about politics and corruption, and I wanted to put positive stories out there. I wanted to highlight the ordinary people who are heroes in their communities,’ he says.

With 10,000 views a month, Waide says his readership is split between Papua New Guineans and foreigners, mostly from the US, Australia and the UK.

Even though it is still a hobby for now, with over 6000 Facebook followers, he says the blog has taken on a life of its own.

‘I get sent suggestions of who to profile next all the time. There is a demand for optimistic stories, and as internet coverage grows across the country so will the number of PNG content creators,’ he says.

Read the first and second parts of this three-part series.

The post Papua New Guinea digital entrepreneurs are blogging to bring about change appeared first on Business Advantage PNG.

The global handicraft market is worth US$38 billion and ‘profit-for-purpose’ enterprise REAL Impact is making sure Papua New Guinean artisans are getting their fair share. Lisa Smyth reports.

Virginia Bruce with artisans of the lalibu community.

It is rare for a visitor to PNG to not walk away with a charming woven basket, or a colourful bilum or a beautifully carved timber bowl. PNG handicrafts are as distinct as the 800 tribes that inhabit the country, and the artisans who make them are as skilled and dedicated as any in the world.

But, on the global stage, PNG handicrafts are virtually unknown.

To peruse, and ultimately buy, an authentic piece of paradise you have to visit PNG. While the handmade textiles of India and the richly coloured ceramics of Morocco adorn hotel lobbies and living rooms the world over, PNG handicrafts have yet to tap into the artisan market – the second-largest employer in emerging economies behind agriculture.

‘PNG artisans are proud master craftspeople with skills that date back centuries, including weaving, carving, textiles and basketry,’ says Virginia Bruce, chief executive officer and founder of REAL Impact.

‘Globally, artisans are major contributors to the world’s fashion, textile and homewares industry; however, sustainable market access has not yet been available to PNG artisans.’

Experience

Bruce has more than 25 years of experience in branding and business development, working for the likes of Warner Brothers and the International Olympic Committee. Roughly 10 years ago she began thinking about applying her extensive knowledge of 360-degree marketing to social impact.

‘I wanted to take my commercial knowledge and apply it to the development sector,’ explains Bruce. ‘I wanted to disrupt the aid system and build a new business ecosystem to support small-to-medium enterprises (SMEs) and empower communities.’

‘By helping local artisans create viable businesses we will create a real economy that is inclusive, equitable and sustainable and deals in real value and financial returns.’

And so, working with Pacific Trade Invest Australia, InnovationXchange and Pacific Rise programs, Bruce established ‘profit-for-purpose’ enterprise REAL Impact.

REAL Impact is creating a shared service platform that delivers the necessary Minimum Viable Business requirements to Pacific Island SMEs, from capacity building through to capital access, marketing, design and a retail interface.

‘The informal sector in PNG is made up of 80 per cent of the population and it is charactersied by lower and less reliable income and difficult working conditions,’ notes Bruce. ‘By helping local artisans create viable businesses we will create a real economy that is inclusive, equitable and sustainable and deals in real value and financial returns.’

E-commerce

In November, during the Asia-Pacific Economic Cooperation (APEC) summit in Port Moresby, the organisation launched its B2C e-commerce digital marketplace, Considered by Real. The website provides SMEs access to regional and global markets, and showcases ethically sourced products handcrafted by rural Papua New Guineans.

Expertly designed and with high-quality imagery and functionality, the platform sells a range of products that many Papua New Guineans would find in abundance at their local market at a premium price. Laundry baskets, planters, stools, light shades, jewellery and bilums, all made using traditional materials and techniques, are available for purchase online and can be shipped all over the world.

‘The platform is a pilot program that has the potential to create real scale, awareness and a single location for businesses and consumers to source Papua New Guinean artisan goods from small-batch artisan producers,’ says Bruce.

During APEC, the organisation also lobbied for the development of a permanent creative arts precinct in Port Moresby and is currently looking for partners to help develop this commercial and logistics urban hub.

PNG handicrafts are as distinct as the 800 tribes that inhabit the country.

While Considered by Real is the final piece in a high-impact supply chain, Bruce and her team have also been exploring ways to help SMEs find the first piece – funding. Due to its isolation and small populations, Pacific region SMEs have always found it difficult to find investors.

But, in November, Cathy Wariapa from the remote Ialibu District in the Southern Highlands received a loan of $US15,250 through microfinance platform Kiva. The first of its kind in PNG, the loan was crowdfunded in less than 14 hours. Wariapa, founder of Cwakama Arts & Crafts, will use the capital to develop new products using the traditional skills of the Ialibu weavers from her community.

REAL Impact has partnered with Kiva to facilitate zero-interest loans of up to $US50,000 for SMEs in PNG and the Solomon Islands.

Since launching in 2005, not-for-profit Kiva has facilitated more than $1.2 billion in micro-loans to low-income business owners and individuals in 80 countries, with women making up more than 80 per cent of its three million borrowers.

Crowd funding

Kiva works on a crowdfunding model, which allows lenders to connect with organisations that provide small, low-risk loans to in-need individuals or groups in developing countries.

‘At Kiva, we are committed to addressing the challenge of financial exclusion wherever it exists in the world,’ remarks Mark McDonagh, Kiva investment manager.

‘Through our platform, we are able to offer a unique form of risk-tolerant capital that REAL Impact will use to finance and scale promising businesses in the Pacific region.’

REAL Impact is committed to preparing a minimum of four SMEs for investment in the next six months, and, with the retail platform already launched, there’s no reason PNG handicrafts won’t be appearing in hotel rooms and on fashion runways in the next few years.

The post Taking Papua New Guinea artisanship to the world appeared first on Business Advantage PNG.

Young and dynamic advisors are stepping up to provide support to Papua New Guinea’s 50,000 small-to-medium enterprises (SMEs). Lisa Smyth reports on a service industry that looks set to boom along with the number of SMEs in the country.

Help desk … Akae Beach (left), one of the young guns providing assistance to SMEs.

Three-and-a-half-years ago, Akae Beach began her own firm, Beach Accounting and Advisory (BAA), based in Brisbane. Having spent more than 20 years working for large corporate clients in Papua New Guinea, she decided to go out on her own, but with a focus on small-to-medium enterprises (SMEs).

‘I knew that there were not many people helping the SME market. There is help for larger corporate clients but a gap for SMEs. Many are not keeping regular accounting books every month, and are not compliant,’ she says.

‘For a long time, SMEs in PNG were almost exclusively retailers and wholesalers. But now there is definitely more coming from the agriculture, tourism and technology sectors’

Having recognised the opportunity in the market, what Beach didn’t expect was for her business to grow so quickly. Originally from Bougainville, Beach moved her business base to PNG in 2017 and now employs 45 staff across offices in Port Moresby, Lae, Buka and a soon-to-open office in Kokopo. Her business has supported more than 130 SMEs in the past year.

‘For a long time, SMEs in PNG were almost exclusively retailers and wholesalers. But now there is definitely more coming from the agriculture, tourism and technology sectors,’ says Beach.

Flexibility

The PNG Government estimates that the number of SMEs in 2015 was just under 50,000 but the government’s development plans call for that to grow to 500,000 by 2030. This growth will create two million jobs and ultimately SMEs will contribute 50 per cent of the country’s gross domestic product. But many SMEs operate in the informal sector or cash economy and view the fees of consulting and advisory services as too high.

‘More SMEs are starting to become aware of consulting services, but are put off by the high fees,’ explains Beach. ‘But when they realise that they can employ us on a part-time basis, and that our cloud-based technology means we can service them anywhere, they start to see the benefit.’

‘The PNG Government estimates that the number of SMEs in 2015 was just under 50,000 but the government’s development plan calls for that to grow to 500,000 by 2030.’

Understanding the unique business conditions in PNG, Beach began offering night hours to her clients so they wouldn’t have to close their businesses during the day and could have greater flexibility around their bookkeeping.

‘We always have 10 staff working at night to help our clients, but there are also sound business reasons. The internet in PNG works a lot better at night—it is a lot faster—and many of my employees are students and parents who appreciate flexible work arrangements,’ says Beach.

Growth

Service providers in the areas of business and financial accounting, business planning, recruitment and human resources, marketing and e-commerce, IT systems, standards and certification advice, export promotion and market linkages are vital to achieving the expected growth in the SME sector in PNG. But the service industry that caters to SMEs is still very underdeveloped across the Pacific.

‘We’ve seen considerable interest in PNG from the business services industry, and we are particularly pleased with the traction gained through the accounting and financial services firms we have on board,’ says Steve Knapp, director of Business Link Pacific, a New Zealand government-funded program that launched in 2017.

The program works on both sides of the equation—providing subsidies to eligible SMEs, as well as a referral service and a quality assurance system for service providers, including BAA.

‘The future of business in PNG is bright.’

‘We identify the best local service providers so SMEs can access quality local business advisory services, while service providers can be connected to new clients,’ explains Knapp. ‘These service providers are taking a dynamic approach to harnessing more SMEs into their portfolios and recognise the positive results that come from healthy thriving small businesses in the Pacific.’

Beach, who sits on the boards of the Port Moresby Chamber of Commerce and Industry and Transparency International, believes the future of business in PNG is bright.

‘With new technology, you don’t need much capital to start a business these days and we will see a lot more start-ups in PNG. I am looking forward to seeing more empowered Papua New Guineans in the coming years.’

The post Help for Papua New Guinea small-to-medium businesses appeared first on Business Advantage PNG.

GoFood PNG is at the forefront of online food delivery services in Papua New Guinea. Kevin McQuillan speaks with co-founders Samson Korawali and Eugene Anang.

GoFood PNG’s CEO Eugene Anang with a staff member. Credit: GoFood PNG

GoFood PNG’s original concept was simple: provide a food delivery service for residents of Port Moresby.

The CEO and co-founder is Eugene Anang, who identified an opportunity to supply people who want a convenient way to get food from restaurants in Port Moresby.

‘Either they didn’t have a car, didn’t want to go out again after coming home from a long day of work, or they didn’t want to go out at night for security reasons’.

Anang approached Samson Korawali to build the technology that would allow customers to browse different restaurant menus and place their orders online. The orders would then be delivered to their door.

The two entrepreneurs had to raise the capital to buy cars and motorbikes, create an online local ordering system for Port Moresby suburbs only, and make sure the deliveries were made.

Korawali says they had to be creative. They wanted to avoid borrowing from banks—notoriously difficult for SMEs in PNG.

‘Customers are middle-to upper class Papua New Guineans and expats who work long hours and are looking for a service that can cater for their food needs.’

‘We are both entrepreneurs and own multiple small businesses, so we leveraged profits from our other businesses to pump capital into this new opportunity.

‘We have a long way to go to becoming the best and most reliable delivery service in Port Moresby, which is our aim as a company.

‘But for now, we are doing our best to be convenient and reliable with our delivery service, payments and our online technology.’

Timelier delivery service

Fast and reliable food delivery. Credit: Samson Korawali

Twenty restaurants have signed up for the service and earlier this year, the CPL chain, Stop & Shop and Meat Haus, joined to provide grocery home deliveries and catering deliveries respectively.

Korawali says the online technology is ‘working fine’ and the focus is now on improving in order to create a timelier delivery service.

Go Food has six staff, three cars and two motorbikes. Staff currently take the orders by phone or online and then the order is sent to the respective restaurants.

They then go to the restaurants, pick up the food and take it to the homes of the customers. But the strategy is about to change.

‘We are in the process of improving our technology so that all orders are done online without the phone calls,’ says Korawali.

‘There will be no texting, and invoices are automated and sent to the restaurant so that everything is done online.

‘We want GoFood PNG to be the leader in this field, so we are also developing a mobile app.

‘That is quite different to having a website. We want to get it right in Port Moresby first and have our strategy, structures, processes and management in place so that we can improve our services to our valued customers.

‘Then we can explore other opportunities in Lae and expand to Fiji or Solomon Islands etc. [We can] partner with other companies there to assist with the up-scale.’

Social media

Co-founders Samson Korawali and Eugene Anang. Credit: GoFood PNG

Korawali says customers are middle-to upper class Papua New Guineans and expats who work long hours and are looking for a service that can cater for their food needs.

Marketing is done by social media.

‘Social media will play a key part in our marketing strategy and I am hoping to bring on more people to help us market through digital platforms.’

‘Social media is having a huge impact on the life of Papua New Guineans.

‘People in rural areas are now able to keep in touch easily and stay connected. It will provide a lot of opportunities to build businesses, because it means we don’t need to spend too much money on traditional advertising.’

Such expansion requires capital, however. Preferably it will be raised from an external partner.

‘That extra capital investment would allow us to bring on a few more staff members to really drive the business end of the company and to improve logistics—more cars, more bikes.’

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