PNGFP has been producing engineered wood products in Papua New Guinea for more than 70 years, but it recently discovered a new avenue for growth, as Managing Director Tony Honey tells Business Advantage PNG.

NiuDeck Panels produced by PNG Forest Products. Credit: PNGFP

PNG Forest Products moved into the export business as a way to get access to more foreign currency. But what started as a side hustle led to record revenue for the company.

“Several years ago, we decided to move into export-oriented products,” PNGFP Managing Director Tony Honey tells Business Advantage PNG.

“We now export at least one-third of what we produce here in plywood.”

“We started off with low-value products and moved to the higher-value products. I thought we needed to start exporting to get foreign exchange but it’s grown and developed into a big, big part of our business.

“We now export at least one-third of what we produce here in plywood, and that’s exported to New Zealand, primarily, and to Australia, to Malaysia, to China and now into Ireland, in Europe.”

Filling a gap in flooring

PNGFP has been producing engineered wood products since 1954 through sawmilling and manufacturing plants in Bulolo in Morobe Province. The plants are powered by the company’s own hydro power stations.

The group’s export success has come from filling a niche in bus flooring, which is made from plywood. PNGFP’s plywood is treated and made in Papua New Guinea and then sent to bus manufacturers abroad. The company also exports bridge decking, wall cladding and other treated flooring.

One of the appeals of PNG Forest Products to its main customer base in New Zealand and Australia is that its main competitors in bus flooring are in South America and Asia.

“This is the highest revenue year that we have ever experienced under my watch and there is an easy explanation for that: we are very close, we can deliver on a timely basis and we’re competitive,” says Honey.

Planting for the future

Honey says there is a persistent myth in the public domain that PNG has an oversupply of quality hardwood trees accessible to the forestry industry.

“Only about 3 or 4 per cent of the logs here are high value, like the rosewoods of the world. The bulk of the logs are low-grade logs that go into furniture or cheaper plywood products,” he says.

PNG Forest Products has been reliant on a 10,000 hectare (ha) fully sustainable plantation developed in the 1950s. In order to continue that trend, it is planting several thousand hectares of Pinus trees and more than 500 ha of Balsa trees.

PNGFP is planning to develop the plantation on 600 hectares of land which it already owns and which is currently being used to raise cattle. Balsa is a fast-growing wood and can be ready for harvesting within three years.

Honey cites the use of balsa wood in large wind turbines, airplanes and ships as proof that the balsa plantation can be a boost to the group’s exports. He adds that changing technology may pave the way to markets in unexpected places.

“Japan just sent their first wooden satellite into space. So, is there potential there? One would have to say yes.”