Vertical integration is the key to growth in Papua New Guinea, according to Hornibrook NGI Managing Director Matthew Lewis. He tells Business Advantage PNG the steel fabrication and construction company is leveraging its in-house capacity to diversify into property and hospitality.

Hornibook operations. Source: Business Advantage International

The privately-owned Lae-based firm was formed in 1990 by the merger of Hornibrook Constructions and NGI Steel.

With the construction side of the business relying heavily on roll-formed steel-frame buildings (well-suited to PNG’s harsh environment), vertical integration became an important competitive advantage in an economy where it is not always easy to source the products and services you need.

‘The steel fabrication facility at the new site is the largest in PNG and includes a vehicle repair workshop.’

‘Vertical integration is the key. The more you do in-house the less you can be let down,’ says Lewis.

Relocation

The company relocated from the centre of Lae to the Nine Mile area, halfway to Lae’s Nadzab Airport, in 2012.

At 6400 square metres, the steel fabrication facility at the new site is the largest in PNG and includes a vehicle repair workshop.

‘The three-star hotel has 45 rooms, plus an infinity pool, poolside bar and entertainment area.’

The company’s core business is to provide turnkey building services for mine sites, hospitals, schools and housing.

Hornibrook’s Matthew Lewis. Source: Business Advantage International

In the past decade, it has also expanded into property and hospitality, most obviously with the opening of the Crossroads Hotel, on a pristine block across the road from the steel plant.

The three-star hotel has 45 rooms, plus an infinity pool, poolside bar and entertainment area, and a well-equipped gym.

On the same estate, Hornibrook has built 134 four-bedroom houses that it rents out.

Diversified

There is also a convenience store and ATM on site. However, this development is just the beginning of the company’s ambitions in the property sector, says Lewis.

‘We own a large tract of land in the Nine Mile area and, when the economic conditions are right, we intend to develop it into a satellite suburb of Lae.’

For the time being, though, the economic climate is challenging. PNG’s well-documented foreign exchange shortage is making it difficult to procure the high-quality materials from overseas that Hornibrook’s manufacturing business depends on.

‘We are expecting 2018 to be a good year but it will not be easy. Being diversified is certainly an advantage.’