Rimbunan Hijau PNG (R H) is Papua New Guinea’s largest forestry business, accounting for about 45% of the country’s timber exports. Business Advantage spoke with Managing Director James Lau about his company’s strategy for growth and the sector’s future.

R H Group’s plywood factory in Panakawa, Western Province © R H Group

As PNG’s largest forestry operator, what is the strategy for your forestry division going forward?

R H has now been in PNG for more than 20 years. Forestry is a long-term investment. The forest resources that we have access to need to be managed with this long-term investment in mind. Our strategy is threefold. First, to remain efficient and cost effective in all aspects of our operations. Second, to maintain good operational practices and adhere to environmental standards in all parts of our business. Third, to develop niche markets for our products, particularly in timber processing.

What is you assessment of the PNG forestry sector in general? In what direction is it moving?

R H Group’s James Lau

The forest sector in PNG is like most other sectors, in that it is subject to fluctuating demand. One of the problems we have had of late has been an extended wet period. This has created problems for most sectors, not just forestry. Future government policy will also determine the direction of the sector, particularly in areas such as resource allocation.

Over the long term, PNG’s prospects for forest products are good. Exports to the major markets, particularly China, will continue as long as demand remains high. PNG currently has the capacity to increase exports if the demand is there.There is great potential in niche markets, particularly for manufactured products, and we are currently examining those.

How do you respond to criticism of PNG’s forestry sector in the international media?

Forestry, in any country, is an easy target for Green activists. Criticisms of PNG’s forest sector first surfaced in the mid- 1980s, prior to R H establishing itself. Since then, the industry has been targeted unfairly by international activists, despite a comprehensive overhaul of PNG forest policy.

The industry is now for the most part operating responsibly. Our company has implemented environmental assurance standards that are internationally recognised. We have also been working with intergovernmental organisations to improve forest practices and management across the board.

What often gets missed in the public debate is how important the forest industry is for local communities. We work in areas that are remote. The employment and services the industry provides are often not provided by governments in these areas. Green campaigners ignore the benefits that have accrued to these communities from our presence over the past two decades. Moreover, they ignore PNG’s development needs across the board.

We were originally accused of being a ‘fly-by-night’ operation. The past two decades have shown this is not the case. The activists, on the other hand, come and go.

This article originally published in Business Advantage Papua New Guinea 2012/12.