In brief: Foreign currency issues continue to cause problems, and other business stories

Foreign currency issues continue to cause problems, profit announcements for Nambawan Super and Bank South Pacific and ExxonMobil completes InterOil acquisition. Your weekly digest of the latest business news.

InBrief02Businesses in PNG will continue to face a difficult foreign currency situation, according to Bank South Pacific CEO, Robin Fleming. ‘Most of our payments are made within three to four weeks,’ he reportedly said. ‘We try as much as possible to serve customers and ensure that the businesses operate somewhat similar to last year.’ He reportedly added that the bank is still exploring avenues and opportunities to improve on its operations which is likely to involve a stock exchange outside PNG.

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Nambawan Super has declared a profit of more than K400 million for the 2016 financial year, an increase of 44 per cent, or K208 million, on the previous year. Board Chairman Anthony Smare reportedly said the success was due to prudent management of investments, good governance and a strong focus on realised gains. He also said Nambawan is suing the national government on behalf of 2,715 members who have left the fund and are allegedly owed K113 million by the Government.

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Sir Kostas Constantinou

Sir Kostas Constantinou

Bank South Pacific (BSP) Limited has announced a consolidated operating profit after tax of K643.5 million for the 2016 financial year. This represents a 21 per cent increase from K531.9 million on the previous year. Board Chairman, Sir Kostas Constantinou, said that despite subdued economic conditions in PNG, and in other Pacific countries where BSP operates, the group recorded a positive outcome.

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Co-operation and sharing of facilities between joint venture partners of the country’s two Liquefied Natural Gas (LNG) projects will save the state and developers between US$2 to US$3 billion dollars, according to  Oil Search Managing Director, Peter Botten. Speaking at the Inaugural PNG Petroleum and Energy Summit, Botten reportedly said the joint venture partners should be looking at cost synergies and optimising spending through reduced wasteful duplication of infrastructure. (For our exclusive interview with Botten, click here.)

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ExxonMobil has completed its takeover of InterOil following the approval of the transaction by the Yukon Supreme Court in Canada. Managing Director, Andrew Barry, says ExxonMobil’s acquisition of InterOil now makes them a partner in the Papua LNG joint Venture, which is led by Total. The other partner is Oil Search.

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Former Chief Secretary, Sir Manasupe Zurenuoc, has died in Lae, aged 56. Sir Manasupe resigned from public life last February. He suffered from Parkinson’s disease. 

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Acting Public Enterprise and State Investments Minister Charles Abel, reportedly said Kumul Telikom is not going to be a new entity but an amalgamation of Telikom PNG, bmobile and PNG DataCo. He said the Government would utilise the existing structure of Telikom. ‘We are just renaming PNG Telikom to Kumul Telikom,’ he reportedly said. ‘Kumul Telikom will then own DataCo and bmobile’.

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Downer EDI, the Australian-based infrastructure and mining firm, will buy Hawkins Group. Hawkins built the Pacific’s first flyover, the Kumul Flyover in Port Moresby, linking the airport to the CBD.

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Kandrian-Gloucester District in West New Britain Province has reportedly signed a  joint venture partnership with Stoneworks Specialist International Corp of the Philippines to build two fibreglass factories in Port Moresby and Kandrian-Gloucester. Stoneworks is a big fibrelass boat manufacturer and distribution company. The plan is to build and sell boats in PNG and the Pacific.

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Sir Julius Chan

Sir Julius Chan

A Russian company has agreed to construct Papua New Guinea’s first satellite launch facility in New Ireland Province, according to New Ireland Governor, Sir Julius Chan. Sir Julius said he was not in a position to release the name of the company, which is believed to have the backing of the Russian Government and President Vladimir Putin.

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Farmers in the three regions of the Fly River basin in Western Province will soon receive training, extension support, rice technologies and access to markets to sell home-grown rice thanks to a partnership between Trukai Industries and the Ok Tedi Development Foundation (OTDF). The OTDF says it is confident that this partnership will result in eventually establishing rice as a staple crop that can be grown and traded locally among the communities.

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Maersk Line, with partner Inchcape Shipping Services, begins new port calls in PNG this month. Maersk is adding direct calls at the northern ports of Madang and Wewak.

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Sime Darby Berhad (SDB), which owns New Britain Palm Oil, PNG’s largest producer of palm oil, has announced a restructuring plan that will result in the creation of three independent pure play companies to be listed on the main market of Malaysia’s stock exchange, the Bursa Malaysia. The plan is expected to involve an internal restructuring and share distribution exercise prior to a proposed listing of its plantation and property businesses.

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And finally, JPMorgan software apparently does in seconds what it takes lawyers 360,000 hours to do, according to Bloomberg: ‘The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation’.

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