The Rimbunan Hijau (PNG) Group, known simply as R H, has interests in forestry, timber processing, palm oil, media, retail and property development. Its optimistic Managing Director, James Lau, tells Business Advantage PNG why the group is expanding its horizons.

Business Advantage PNG (BAPNG): RH Group is one of the largest and most diversified investors in PNG. What were the highlights of 2012 for you?

R H Group’s James Lau

James Lau (JL): The major highlight for 2012 was the realisation of RH’s hotel and property developments. The planning and approval phase of the Raintree Hotel and Suites by Vision City progressed well in 2012 and construction will begin in 2013. Both will meet high market demand for hotel and residential accommodation in Port Moresby.

In the past, there has been a lack of interest in residential and hotel developments in PNG from outside the region. Much of the current investment is domestic or from with the region. However, it looks like this is changing. Given PNG’s growth prospects, coupled with current high demand, we see these investment opportunities as still being attractive.

Another highlight is our oil palm project in East New Britain Province. The project is progressing and beginning to make an impact, in terms of sustainable employment and income for local people.

BAPNG: Looking ahead, what plans do you have for PNG?

JL: Our plans remain diverse. We currently have a number of investments in agriculture projects, such as palm oil, as well as a small but developing presence in PNG’s energy sector. As with construction and development, the energy, mining and agriculture sectors still have a great deal of potential for PNG’s broader economy.

We remain positive on demand for resources from China, and growth in the region more broadly, if PNG’s expansion in the mining, energy and agriculture  sectors continues.

BAPNG: What is your sense of operating conditions in PNG? Do you think activity will tail off as the LNG construction phase winds down?

JL: RH has always been and remains optimistic about the PNG economy. Yes, the end of the LNG construction phase will mean a decline in activity related to that project, and economic growth is forecast to slow somewhat in the next two years, but overall, we firmly believe that operating conditions will remain good. PNG is the key hub for trade and investment in the Pacific.

We remain positive on demand for resources from China, and growth in the region more broadly, if PNG’s expansion in the mining, energy and agriculture  sectors continues. Many of our counterparts in the region echo these sentiments. It appears that for now the worst parts of the US crisis are over, and Europe seems to be taking steps in the right direction.

Domestically, the current O’Neill government is taking concrete action to improve the business climate and attract direct foreign investment. Most operators who have been in PNG for a long time, such as RH, understand that the occasional bout of political instability, as was seen before the last general election, is simply part of doing business here.