Oil palm remains one of the country’s biggest earners

The oil palm industry generates about K2.5 billion annually and remains the country’s biggest earner as far as cash crops are concerned. Oil palm became a commodity in 1960, and has been contributing to the economy in providing jobs and revenue. RONALD SOUPA, the general manager of the Milne Bay Estate in Alotau, Milne Bay, recently talked to business reporter NATHAN WOTI about the industry and the role of the country’s only milling company, New Britain Palm Oil.

Q: When was the New Britain Palm Oil Limited established in PNG?
SOUPA: In 1967. The New Britain Palm Oil Limited (NBPOL) focuses mainly on palm oil in Papua New Guinea and the Solomon Islands. It manages plantations and operate processing facilities which mostly handle certified sustainable palm material. The company produces and distributes Roundtable on Sustainable Palm Oil (RSPO)-certified palm oil under the identity preserved model, which means its palm oil is traceable to the plantation level.
The company is also involved in research, focusing on seed production and plant breeding to optimise crop yields in oil palm growing regions.

Q: Can you explain NBPOL’s operations in the country?
SOUPA: We operate over 50 estates, 13 palm oil mills and seven kernel crushing mills. Until 2018/19, the NBPOL owned palm oil refineries in Liverpool in the United Kingdom, and West New Britain. These are now owned and managed by our parent company’s downstream business, Sime Darby Oils. NBPOL’s focus remains entirely on upstream palm oil operations.
Our sugar cane plantations comprise more than 5,600 hectares, and our cattle pastures over 9,500 hectares. We also operate a sugar refining ethanol factory and two abattoirs to produce beef for the local markets.
NBPOL’s world-class Dami Research Station and Seeds Production Unit are located in West New Britain.

Q: What is the current status of NBPOL?
SOUPA: NBPOL manages plantations and operate processing facilities which mostly handle certified sustainable palm material.
Basically, supply chain position is downstream and mid-stream, meaning, we are a grower of oil palm, processor and trader of crude palm oil and palm kernel oil. Refining or down streaming is done by the parent company Sime Darby.
In terms of land, the NBPOL owns up to 140, 000 hectares of land (in PNG).
However, smallholder growers also play a crucial role in the production line because they own a majority of land and grow their own oil palm and sell it to NBOL mills at certain prices.

Q: How many people do you employ?
SOUPA: We are proud to be the biggest employer in the country with more than 25,000 employees directly benefiting from the company. Plus the small-holder growers and oil palm farmers who we indirectly create opportunities for.

Q: What is PNG’s main international market and is PNG oil palm standards compliance?
SOUPA: Because our oil palm is certified by international standards, we can export to any international market, including the European market.
On compliancy, we have some of the world’s best practices, from palm seedling planting, to nursery, growing and harvesting, all the way to milling. So the short answer is yes. We are certified member of the RSPO. We have also ensured that we adhere to our commitment to the NDPE (no deforestation, no peat and no exploitation) policy. That is why oil palm in PNG is restricted to growing in deforested land or exploited areas because there is traceability and accountability for international markets.

Q: What are some products that come from PNG’s oil palm?
SOUPA: Crude palm oil and palm kernel oil (which is often processed at refineries owned by our parent company, Sime Darby.

Q: What are some challenges hindering production in general?
SOUPA: Every country you go to has its own challenges, and PNG is no different. We have our fair share of problems. I believe the biggest issue in our country at the moment is the law and order problem.
If we want to prosper, attract foreign investors and develop, we cannot keep allowing this kinds of issues to go on.
For us here at the Milne Bay Estate, we have experienced a drop in production due to the law and order issues we experienced in 2019 and 2020. Most of our staff members left work in fear for their lives, some were held at gun point and our machines, vehicles and equipment stolen.
To counter the threat, we had to spend over a K1 million on security. We flew in 10 mobile squad members from Port Moresby to come and provide security.
The company is looking after them and they have been doing a fantastic job in providing security, not only for us but also for the police in Alotau to curb up criminal activities. We pay for their plane tickets back and forth to visit their families after every six months for the last two or three years. We also provide their accommodation, food and allowances.

Q: Is the company concerned about the extra cost?
SOUPA: I would rather spent K1 million on security than lose K10 million to the cost of damage. That is the kind of measure we took to ensure production continued and our employees and staff are safe. As for the country, I believe the Government should get aggressive with the enforcement of law so that we keep bad people away from our communities and business areas. The civil unrest on Jan 10 I think was a wakeup call for all of us. Business activates and investor confidence are what is keeping this country functioning. The Government should prioritise the private sector, ensuring that they are well taken care of because at the end of the day, they provide employment, pay taxes and keep food on the table for ordinary families.

Q: What do you think of the Government intervention programme for Oil Palm Industry?
SOUPA: I thank the Government for realising the importance of this cash crop commodity. Oil palm has done much for our people and the country in the past decades despite being without a ministry or policy to guide it. With the creation of the new oil palm ministry, I feel like we have a voice and head now. The Government’s intervention programme for seedlings and replanting is a start. We saw Oil Palm Minister Francis Manake presenting K540,000 to the Higaturu Estate in Popondetta, Northern. He also gave about K216,000 to the Hagita Milne Bay Estate to buy seedlings. I am also happy to hear that the minister is working on tabling a national oil palm policy as a bill in Parliament to be approved. The policy, including the other two legislation are key to where this industry will be at in the 20 years.