Outspan invests in education

Business
Outspan PNG business manager BASAVARAJ MASHETTY talks about how the company invests in education, hoping to give back to the cocoa growing community

INVESTING in education is an investment in future generations and the cocoa sector, Outspan PNG Ltd says.
Speaking at the recent opening of a renovated classroom in Markham, Morobe, Outspan PNG Ltd business manager for cocoa Basavaraj Mashetty said: “It is imperative that cocoa growing communities have access to the education they need to develop their skills and improve their livelihoods.
“Together with our partner, Lindt, we are marking the renovation of a school classroom in Sangang Primary School which will support 450 children in the local farming community to attend school.
“This is just one of a number of renovation projects we will be undertaking in the coming months.
“We would like to thank our cocoa farming group, who are instrumental in these projects, not only in cocoa, but also in refurbishments of social infrastructures within our cocoa farming communities.
“And we appreciate our partner, Lindt & Sprungli, who has supported us in implementing these farming programmes and have continued to support cocoa farmers in PNG.
“We also acknowledge the support from our stakeholders, particularly the PNG Cocoa Board, National Agriculture Quarantine and Inspection Authority (Naqia), Famili PNG, Lae Business Coalition Against HIV/AIDS (Lae BAHA), WaterPNG and Morobe education department.
“Projects such as this are an example of what can be achieved through partnership, particularly with the farmers themselves.
“We started our journey in last year, with 1,000 farmers but, today, we are collaborating with all the farmers in this region.
“Our objective is to connect with farmers directly to understand their challenges, not only in regards to their farming activities and marketing but also in other aspects of social wellbeing in order to help them improve farm productivity.
“We have set up a farming group led of extension officers to assist farmers with day to day farming activities such as providing training on good agricultural practices including sensitisation about protecting forests and natural water reserves, integrated pest and disease management and good social practices such as HIV/AIDS awareness and training on mitigating gender-based violence.
“We also believe that training alone is not sufficient and farmers require the necessary input to improve their productivity such as free, high quality seedlings from our cocoa nursery and other tools to help them professionalise.
“We are also focused on supporting the entire cocoa growing community to have access to basic amenities and live a healthy lifestyle.
“Not only are we investing in local education, but also ensuring there is access to safe drinking water.
“We have rehabilitated a run-down water supply system in Kaiapit community, which includes over 500 households, that now have access to a safe and reliable water supply.

An overview of the company’s sustainability impact data to date.

“In the Sepik region, we are working with Puratos and other customer partners to undertake community needs assessments to ensure we are channelling our investments into areas that require it the most.
“Due to our close relationship with both cocoa farmers and the customer, we are able to use our full supply chain expertise and scale to have real impact on the ground. This would not be possible without the support of our field teams and wider global network.”
Outspan PNG, a subsidiary of Olam Cocoa, has been investing in a sustainable cocoa supply chain in PNG for over two decades.
Its team of 50 employees and 80 seasonal workers are committed to improving the long-term livelihoods of PNG farmer suppliers, their communities and the environment in which they operate.
Mashetty said: “We support 11,000 farmers in sustainability programmes which we implement on the ground on behalf of our international chocolate and confectionery customers.
“This allows them to not only benefit from our unrivalled supply chain expertise, it also creates links between cocoa growing communities and the end consumer of chocolate products.”
He said their sustainability programmes aimed to support cocoa farmers to overcome the main challenges that faced the PNG cocoa sector:

  • Farmer trainings and capacity building: Farmers are trained on good agricultural practices, good environmental practices, good social practices and integrated pest and disease management.
    These comprehensive training modules are focused on improving farmers’ productivity levels;
  • quality planting material: Access to good planting material is a key issue faced by cocoa farmers and through our cocoa nurseries we are able to provide access to high yielding and quality clone seedlings free of charge.
    We are also working on community-based nurseries to educate farmers on budding techniques to make them more self-reliant; and,
  • Sundry models: We are trying to overcome the smoky beans issue by working on a controlled pilot projects, which helps farmers to build low cost sun driers. This supports farmers to be able to produce better quality cocoa, reduce labour costs and conserve forests.

The company is also fully aligned with the goal of Olam Cocoa to achieve 100 per cent traceability from their global, direct source cocoa supply chain by 2020.
The company already has a 15-year history of establishing cocoa sustainability programmes aimed at providing long-term, positive support to cocoa growing communities.
As a subsidiary of the leading originator of cocoa beans and a globally leading processor of cocoa ingredients (Olam), the company has a presence in every major cocoa region in the world and strong relationships with the top international chocolate and confectionery brands.
This means that it can offer greater market access to PNG cocoa farmers and secure the best possible price for their cocoa beans.
The company also partners with local PNG cocoa exporters.
The chart below from the PNG Cocoa Board’s quarterly report and New Edge market report, clearly shows that PNG beans are achieving a premium price which not only benefits farmers, but also the domestic economy through increased Forex remittance.
Mashetty said it was important to have a player with a sustainable business plan to continue to serve PNG’s farmers in difficult times.
The world cocoa market distinguishes between two broad categories of cocoa beans: “fine or flavour” cocoa beans, and “bulk” or “ordinary” cocoa beans.
Generally, fine or flavour cocoa beans are produced from Criollo or Trinitario cocoa tree varieties, while bulk or ordinary cocoa beans come from Forastero trees.
It should be noted that the difference between these two categories is in the flavour rather than in other quality factors.
Fine flavours include fruit (fresh and browned, mature fruits), floral, herbal, and wood notes, nut and caramelic notes as well as rich and balanced chocolate bases.
Compared to the international market for bulk cocoa, the market for fine or flavour cocoa is generally regarded as a relatively small, highly specialised and separate market, with its own supply and demand characteristics.
Specialist agents buy directly from fine or flavour origins for specific chocolate companies.
Cocoa quality starts at farm level, meaning that farmers play a key role in producing good quality cocoa.
Although Outspan has made significant progress as part of its sustainability programmes on the best cocoa production techniques, it alone cannot alone determine fine flavour status.
Outspan PNG has always been a strong supporter of the initiatives taken by the PNG Cocoa Board to maintain the high standard of cocoa beans being exported from the country.
“We have rigorous quality systems in place across all of our cocoa buying origins and as the majority of our cocoa beans are shipped to premium markets such as the USA and Europe, we are required to adhere to strict bio security as well as quality requirements,” Mashetty said.
Outspan PNG/Olam Cocoa has board representation or is an active member of many key industry bodies including the Federation of Cocoa Commerce, World Cocoa Foundation, European Cocoa Association and the Cocoa Association of Asia.

The PNG Cocoa Board’s quarterly report and new edge market report, showing that PNG beans are achieving a premium price which not only benefits farmers, but also the domestic economy through increased forex remittance.
Basavaraj Mashetty (middle) with two students from Sangang Primary School in Markham, Morobe.