After ten years of exporting, Niugini Organics is now selling its certified organic coconut products domestically. It has required a very different approach, co-director Dennis Hill tells Business Advantage PNG.

Production clerk Rachael Warkia purchasing nuts from a collector from Kabaira village. Credit: Niugini Organics

Niugini Organics has exported organic coconut oil and soaps manufactured in East New Britain since 2008. While the certified organic products are found stocked in health shops and supermarkets Australia and New Zealand, there is also growing demand at home.

In March this year, the company launched its export products on the domestic market.

‘We thought virgin coconut oil was going to be priced beyond the PNG markets,’ says the company’s co-director, Dennis Hill. ‘But we packaged it to suit the local market and it has exceeded expectations.

‘We sell it [virgin coconut oil] mainly in big town supermarkets. It’s growing quite nicely.’

Supply

Maintaining a positive relationship with its smallholder coconut suppliers in East New Britain is the crux of Niugini Organic’s business model.

‘PNG consumers understand coconut oil; it’s used traditionally on the skin, on the hair and in cooking.’

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‘We know all the small holders on a personal level,’ explains Hill, who co-directs the business with his wife, Debra. The firm’s Extension Officer, Peter Muro, works full time in the field to coordinate their smallholder supply.

‘You concentrate on what you’re actually good at and what your strategic assets are, and source what you can from businesses and individuals who are good at what they do.’

Value for money

Production Supervisor Helen Wartovo. Credit: Niugini Organics

The PNG consumer market is constrained by smaller household disposable incomes. Hill says Niugini Organics’ focus is on creating products that offer value for money.

‘We are trying to compete alongside imported and locally-packaged palm oil products. I don’t think we’re going to pick up the bulk of the cooking oil market but people are certainly buying it for cooking and medicinal uses.

‘Trends in developed country markets are largely influenced by media-driven fads. Consumers are always ready for the next new thing, meaning what’s a hot new health products right now might be forgotten in a few years’ time.

‘PNG consumers understand coconut oil; it’s used traditionally on the skin, on the hair and in cooking. Papua New Guineans are becoming more health aware and can see the health benefits of cooking with coconut oil compared with products such as palm oil.’

Galip nuts

The company’s latest venture is a pilot project of processing galip nuts to sell on the domestic market. The company is currently going through the process to have the nuts certified as organic.

There’s been a long-running effort to commercialise the country’s galip nut, with development work carried out by the Australian Centre for International Agricultural Research.

Hill says the nut is an example of how traditional land owners in East New Britain’s Gazelle Peninsula can get economic return from their forests.

‘With land inherited on much of the Gazelle Peninsula via a matrilineal tradition, this gives women a chance to earn good money from their own traditional lands.’

‘A lot of people are in agreement that the forests need to be conserved, but owners of this land need to be taken into consideration also. They have the right to an economic income from their land, the same as anybody else. Galip nut is an indigenous forest tree that grows naturally throughout the rainforest.’

Every day, the company purchases nuts from up to 40–50 people. Hill estimates that about 95 per cent of the nut suppliers are women and teenage girls.

‘With land inherited on much of the Gazelle Peninsula via a matrilineal tradition, this gives women a chance to earn good money from their own traditional lands.

‘It’s a very useful nut from the viewpoint of paleo type diets; it ticks all the right boxes in a lot of areas. More importantly, it just tastes so good.’

The company has the product on sale in most major supermarkets in Port Moresby, Lae, Madang and Kokopo.