Papua New Guinea’s potential as a market for ice cream will be put to the test when Laga Industries completes a significant expansion of its Gala manufacturing facilities in Lae later this year, writes Ben Creagh.

Laga Industries General Manager Gerard O’Brien and Engineering Manager Jeremiah Jerewai review new machinery as part of Gala’s upgraded ice cream facilities. Credit: Laga Industries.

Laga Industries is set to become the leading producer of ice cream in the South Pacific as it upgrades capacity to meet growing demand in Papua New Guinea, according to General Manager Gerard O’Brien.

Over the past year O’Brien says that Laga, which is part of the Steamships Trading Company Ltd group of businesses, had been ‘struggling to keep up’ with demand for its Gala ice cream brand throughout PNG.

He said it is an opportune time for the consumer goods manufacturer to build capacity, grow the Gala product range and improve how its ice cream was distributed around the country.

‘Certainly, last year we didn’t do ourselves any favours in the marketplace by being out of stock at various times,’ O’Brien tells Business Advantage PNG.

‘(The expansion) will mean we can keep up with demand which is increasing—the people of PNG certainly like their ice cream.’

Significant growth

Launched in October 2014, the K10 million expansion will grow the production capacity of Gala ice cream by 150%, with output to lift from 20,000 litres a day to 50,000 litres.

The new facilities will include an automated mix plant, three high capacity churns, an automated cleaning and sanitisation system, upgrade of frozen storage, and high capacity blast freezing capability for quality control.

‘We will be the biggest and most modern ice cream facility in the Pacific,’ said O’Brien, adding that the upgrade is on target for completion in May 2015.

Market test

The upgrade will not only enable Laga to meet demand, but also provide an opportunity to test the potential of the market in PNG, according to O’Brien.

Describing ice cream in PNG as a ‘latent market’, O’Brien said there was potential to break new ground with its range of Gala products as production grew.

‘It’s hard to say how big the market could be. It has really been infrastructure that has limited demand in terms of being able to get ice cream to remote locations in decent condition,’ O’Brien explained.

‘The challenge for us now is to make sure we distribute it and get it around the country in good condition, which in PNG is no easy task.’

To test the market, Laga is planning to expand its range of Gala products, including the reintroduction of the Gala Gold gourmet brand and the launch of new novelty stick ice creams.

Next steps

To overcome PNG’s logistical challenges, O’Brien said Laga would look to continue investment in its freezing capabilities to help it to effectively distribute its products nationwide, whether by ship to island markets or by road into the Highlands.

Laga may also investigate building an export market for its Gala products throughout the Pacific once its position domestically has been consolidated post-expansion, he added.

‘Down the track we would like to do that. That’s one of our goals. Probably we have enough on our plate domestically for the next 6-12 months, but certainly that is our plan.’