The Sago Project in Gulf Province seeks to improve revenues from a crop already well known to smallholders. Sago Project co-founder Peter Uechtritz reveals to Business Advantage PNG the key ingredients for a successful agribusiness project in Papua New Guinea.

Sago Project. Credit: Kalolaine Uechtritz Fainu

Last month, Papua New Guinea’s first mechanised sago processing mill was put into action in a Pawaian village alongside the Purari River in Gulf Province.

The project seeks to harness the potential of this crop that often grows wild in a region whose river delta soils do not suit the production of other cash crops such as coffee and cocoa.

‘The point of difference is that we are introducing low-tech technology that can be managed by the village and will speed up the processing, produce a cleaner product and also improve the yield or productivity by up to 50 per cent,’ says adviser to the project, Peter Uechtritz.

Uechtritz and his brother Tony have been working in the Gulf region for the past decade and saw the potential of sago to help improve the living standards of the local smallholders.

‘Diversification and value adding is the key to success.’

In PNG’s Gulf Province, there is an estimated 400,000 hectares of wild sago and 5,000 hectares of semi-cultivated sago. The crop is everywhere, but it is often taken for granted. For Uechtritz, the key to the project – and to any agribusiness venture in PNG – is to start small and to make sure you are not just producing for a single activity.

The project is managed by a women’s association with support from Koko Nene Henaru, a community representative company, and Papua LNG Project Operator, Total E&P PNG.

Varied income sources

Sago processing mill.Credit: Kalolaine Uechtritz-Fainu

‘Diversification and value adding is the key to success,’ Uechtritz says. A case in point is the recent closure of the factory that was processing cassava for SP Brewery’s Cassava Project. The project was set up solely to produce cassava for use in a low-cost alcoholic product that saw sales fall under PNG’s state of emergency laws, but it expects to reopen when demand returns.

‘We are interested in creating business opportunities, particularly in the area of gender equity.’

With the Sago Project, Uechtritz plans to not only produce ‘wet cake’ (the staple food of the region) but also to refine sago flour.

He eventually wants to use the discarded husks for stock feed, use the sago to generate biofuel, as well as farming sago grubs which are on menus in West Sepik hotels and have export potential to Thailand, where the grub is a delicacy and commands a very high mark-up. Sago flour also fetches top dollar in Japan.

‘We are interested in creating business opportunities, particularly in the area of gender equity,’ Uechtritz says. ‘I think that women would be able to set up a sago grub production facility and it would be a micro business that could be micro-financed and women would be able to manage it.’

Parachutes

Sago Project workers. Credit: Kalolaine Uechtritz-Fainu

Uechtritz says that many people who try to invest in PNG agriculture make the mistake of trying to parachute in systems that work in other countries, but the land, the ownership and even the skills of local workers do not always suit this top-down approach.

He talks about a US$40 million (K138 million) sago production facility in the 1990s that never got off the ground, but ‘we have decided to go the other way where we build up these smaller machines so we can constantly monitor, we can review and improve.’

The next stage of the operation is to bring the production of the sago processing mills to PNG, because Uechtritz is currently unhappy with the inconsistencies with his Indonesia suppliers. His long-term plan is to have the low-tech machines made in PNG in kit form, ready to roll out to sago-growing communities that need them.

The plan has similar potential to Pacific Industries’ kiosk program, that provides simple kiosks for entrepreneurs to sell Pepsi and snacks from.

‘Making the mills is another business opportunity within Papua New Guinea where, once we have the prototype we move to a standardised machine which we can produce in machine shops in PNG,’ he says. ‘It is something that can become the domain of landowner groups – when the oil and gas runs out, they can turn to sago.’

Keep up with the Sago Project on a blog produced by Peter’s niece, Kalolaine Uechtritz Fainu.