Interview: Geoff Cundle, Steamships


One of PNG’s largest and most diversified companies has a new Managing Director. We caught up with Steamships’ Geoff Cundle (pictured below) a few weeks into his new job.

Steamships' Geoff Cundle

Steamships’ Geoff Cundle

Business Advantage PNG (BAPNG): This isn’t your first time working in PNG …?

Geoff Cundle (GC): I was here about 20 years ago, again with Steamships, and again seconded in from Swire. I’ve been in Swire in the intervening period up in Asia, most recently responsible for their beverages division based in Hong Kong.  Prior to that, I was responsible for their marine, trading and industrial divisions. I’ve been with Swire for 33 years; Swire have a 72% share in Steamships.

BAPNG: What are the priorities for Steamships over the next twelve months?

GC: I think it’s pretty much ‘steady as she goes’. We’ve had fairly significant growth over the last two or three years. We’d probably see this year as a period of consolidation on that growth. We’ve got a number of significant property development projects underway, so we’ll want to bring those home. One is the Windward 2 apartments on Ela Beach, due for completion this year, and we’ve started construction of the new waterfront development here in Port Moresby.

We’re cautiously optimistic for the year.  Everyone has some concern about what the wind-down on the construction phase of the PNG LNG project will mean. We’re not so exposed, it wasn’t a big part of our business, but there was a trickledown effect. The early signs from our hotel business this year are that people are coming back, and maybe slightly earlier than last year. Hopefully, the increased political stability will encourage investors.

I feel now there’s an increasing amount of confidence about the future, and that tomorrow should be better than today, which is something I experienced in China as well.

BAPNG: Steamships is a major user of infrastructure.  The new Government has signalled that it wishes this to be the year of implementation in this area. Do you welcome such signals?

GC: We certainly welcome them.  As you highlight, we are exposed to the infrastructure bottlenecks that do occur.  I think the moves in the Lae port are excellent, and that’s moving ahead and appears to be on schedule. Not just ourselves, but the whole of business in Lae and the Highlands have been impacted by the port congestion, which the port extension should help address.

We’re also exposed in terms of the Highlands Highway through our transport business, East West Transport. We continue to be very concerned about the physical condition of the highway, so we obviously welcome the government’s commitment on roads. We know it’s not easy, but it’s absolutely critical as far as our business is concerned and I think for the economy of the Highlands and for Lae.

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We also remain concerned about security on the highway. We’re having to increase our investment in security and are now providing escort vehicles to take convoys of trucks up the highway. That’s clearly an added cost to the business.

BAPNG: Are you planning any acquisitions or changes to your business mix?

GC      No, nothing planned at the moment.  Our natural inclination would be to focus our attention on growing our existing core activities. We’ll always be open to new opportunities, but unless we see such opportunities being aligned with the core competencies and our existing activities, I think we would tend to stick to our knitting.

BAPNG: You have a significant property development division.  Can you give me some sense of how the market is going and what the opportunities might be?

GC: The market has been firm in Port Moresby, and the additional capacity that has been introduced to the market to date has been absorbed. There is more capacity coming, and I think the test will be later this year to see how readily that is absorbed. Our focus has been primarily on the premium end of the market, and to date that has remained firm. I think we’ll see more activity on the industrial front; the residential, less so.

You know, we look at these as ten, fifteen, twenty-year investments and so we’re fully expecting and comfortable with the ups and downs that will happen. Steamships has been around for 95 years and so we’ve lived through the cycles, and we don’t have too many alarm bells ringing at this point.

Lae is still fairly quiet. I think everyone’s expecting it to take off.  It hasn’t really happened yet but, strategically for us, it’s an important market for the future.

BAPNG: Finally, it’s been twenty years since your last posting to PNG. What are the major differences you’ve noticed this time?

GC: Obviously quite a few taller, shinier buildings dotted around. I was very surprised that we now have traffic jams in Port Moresby. That is certainly a difference.

Coming back, I also feel a stronger degree of confidence about the future. When I left, there was a lot of uncertainty and people basically planned for the short-term.  I feel now there’s an increasing amount of confidence about the future, and that tomorrow should be better than today, which is something I experienced in China as well. Many other markets can’t claim that. The challenge now is converting that optimism into reality, and that’s what makes PNG so exciting and challenging.