Brian Bell Group is reaping the rewards of three years of infrastructure investment and using this period of profitability to grow its local partnerships.

Gerehu Warehouse. Credit: Brian Bell

Only the third CEO at the company – after founder Brian Bell who ran the business for 50 years and Bell’s grandson Ian Clough, who is now Chairman – Cameron Mackellar came to the veteran retailer in 2016 with some fresh ideas.

He tells Business Advantage PNG, the group, which includes the Brian Bell Home Centre, Trade Electrical, Chemicals, Agriculture and Property divisions, has been ringing the changes for the past three years, investing in new systems, infrastructure and operations, refreshing its 1200-strong team and reinforcing a corporate culture of accountability.

Three years ago, the group built a new Homecentre in Lae and is now building a large-scale complex of 39 units on Ela Beach, near the site of the tiny gun store that launched the company some 61 years ago.

The units will be used to house its management team as well as external tenancies. It is all part of the long-term vision for Brian Bell. The other major building project, completed in 2019, was Brian Bell’s new 16,000 sqm warehousing facility in Gerehu. This building helped to consolidate four smaller warehouses into one large and efficient location.

The approach is paying dividends, with cost-savings underpinning the current growth which in turn allows for more opportunities to invest.

‘Mt Hagen we see as the epicentre to Highlands growth in the future. It’s got an enormous catchment area and trade comes in from all parts of the Highlands into Mt Hagen.’

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‘The big investment that we’ve made more recently is the redevelopment of the Homecentre store at Gordon, which is our flagship for Port Moresby,’ Mackellar says. The plan is for a brand new destination-shopping precinct in the capital with a host of other retailers setting up shop there. The work is expected to be completed early this year.

‘The urban growth is on the outskirts of Port Moresby and, if you look at our landscape for retailing, it’s in Boroko, Vision City and Gordons,’ he observes.

‘The other project we will do in 2020 is to rebuild our Homecentre operations in Mt Hagen. It’s not just a new building for us. Mt Hagen we see as the epicentre to Highlands growth in the future. It’s got an enormous catchment area and trade comes in from all parts of the Highlands into Mt Hagen. It’s a very important cornerstone of trade for us.’

Trading in subdued times

Brian Bell’s Cameron MacKellar

Mackellar believes the investments are helping Brian Bell trade through PNG’s current period of subdued economic activity, and are putting the company in a good position to take advantage of economic activity related to the P’nyang and Papua LNG projects, as and when they commence.

‘We’re still at least a year away from any real significant operational benefits to the country. We’ve got to trade through [2020] regardless of whether Papua LNG happens or it doesn’t. I think we’re quietly optimistic,’ he says.

Having both consumer and business-to-business revenue streams is proving helpful during such times.

‘Because our business is roughly 50 per cent consumer-driven and 50 per cent commercial or corporate-driven, if one sector sinks or softens, we then put our tactical activities toward the other,’ he says. ‘If Papua LNG and P’nyang come off, that’s obviously more corporate-aligned and most in PNG will see some benefit.’

Going local

Le Hunte at Gordon. Credit: Brian Bell

Greater profitability is allowing more blue-sky thinking.

‘We are a very proud Papua New Guinean company that is 100 per cent PNG-owned and we should be looking at PNG to provide a variety of products and services for us,’ Mackellar says. ‘Now that we’ve got a really stable environment, that provides an opportunity for us to look more into using [local suppliers].’

Brian Bell purchases about 15 per cent of the products it sells from local suppliers, and the trend is towards greater local sourcing where possible.

It already sources some of its furniture, timber products and hardware equipment locally and the group is looking at sourcing more arts and crafts for the Homecentre environment from local businesses in 2020.

‘We’re connected with a number of Papua New Guinean SME businesses and people like Coalition for Women in PNG who are introducing us to other people that we could potentially trade with,’ he says.

‘The reality is that small businesses need to come with a big business mindset in order to deal with a Brian Bell.’

But going local does create some issues for a legacy retailer that needs to operate at scale.

‘The reality is that small businesses need to come with a big business mindset in order to deal with a Brian Bell,’  he explains. ‘The supply chain is critical from a customer point of view because if we have a product one week but we don’t the next, people don’t accept that. You hear conversations about coffee growers having a good season and maybe not growing coffee the next season because they’ve got lots of money in their pocket.’

‘Long-term supply relationships are the key to our success. They have been the backbone over the last 61 years and will continue for the next 61+ years.’

‘We can’t be without great partnerships at the end of the day, and we don’t want to be in that space.’