Shane Clark, owner of Rubio Plantation Retreat, has discovered a novel way to grow his surf business. In this exclusive interview, he shares with Business Advantage PNG the secrets to thrive in Papua New Guinea.

Surfing at Rubio Plantation is a great option for those seeking a quiet retreat. Credit: Rubio Plantation Retreat

Rubio Plantation Retreat is predominantly a surf tourism business in New Ireland Province. But, with limited capacity to scale up and reach large markets, diversification has been critical to its survival.

The company’s management strategy is an example of an approach that is common in PNG: developing economies of scope (finding new customers from different markets) rather than economies of scale (finding new customers in existing markets).

And the company has developed some surprising offerings.

In addition to New Guinea Eco Tours, Rubio Plantation Retreat produces chocolate and cold pressed virgin coconut oil; it also runs a small trade store and tyre service.

‘Basically, you have to diversify or shut down.’

‘Our main business is providing accommodation and tours, with most of our guests Australian surfers wanting a quiet retreat,’ says Rubio Plantation Retreat’s owner Shane Clark.

‘Due to limited access to markets, we’ve diversified the business, which has helped us to overcome fluctuations in demand and price.’

Cost

Chocolate made in Rubio Plantation Retreat. Credit: Rubio Plantation

Clark says the cost of doing business in Papua New Guinea has grown faster than some commodity prices, which has resulted in many plantations going bankrupt in recent years.

Rubio was a cocoa and coconut plantation. Clark turned it into a tourism and downstream processing business due to the fluctuating and often low price of copra and cocoa beans.

‘Basically, you have to diversify or shut down.’

Power and water

With no power in the area, Rubio Plantation Retreat generates its own through a solar and micro hydro system.

The company has 15 stand-alone solar systems totalling about 8000 watts and two micro hydro turbines producing 700 watts.

Clark says 700 watts of hydro is equivalent to approximately 2100 watts of solar because it produces power 24 hours a day.

‘Using solar and hydro means we’ve been able to avoid using diesel as a source of power, which is more expensive and has a significant impact on the environment,’ he adds.

And he is expanding the solar power system to 5000 watts, which will help to provide capacity to produce more chocolate.

‘Papua New Guinean businesses should concentrate on meeting our domestic needs before looking to export.’

To overcome the lack of access water, Clark has installed a gravity feed water system. This also means the plantation has avoided the high costs usually associated with running pumps.

Be resourceful

Rubio Plantation Retreat

The high cost of shipping is a challenge for the business, but Rubio Plantation Retreat has taken this as a reason to be resourceful.

‘To avoid excessive transport costs, we use local materials and equipment where possible.’

‘It’s difficult and expensive to access larger markets, so we’ve concentrated on supplying the local market, and have been successful through diversification of the business.’

Recent upgrades to infrastructure have been beneficial for business. These included: sealing of the Boluminski Highway and the addition of Digicel mobile towers and Telikom 4G towers.

‘Infrastructure in this part of PNG is fairly limited, the development of communications, power and transport facilities and services has a big impact on the local business sector.’

While transport infrastructure is improving, Clark says he will continue to focus on supplying the local market and keeping the business strong through diversification, instead of seeking out export markets.

‘Papua New Guinean businesses should concentrate on meeting our domestic needs before looking to export.’

‘When we export raw materials and import finished products, other countries are benefitting from creation of jobs and shipping companies are receiving the majority of the revenue,‘ he adds.

For Papua New Guinea to continue to strengthen its economy, Clark says, businesses must focus on downstream processes and supplying to local markets, which will see jobs created and cash flow into local economies.