Take the long-term view to investing in Papua New Guinea, says brewer

Welcome,

The secrets to a successful business operation in Papua New Guinea are to form partnerships, stay ahead of the game and be the best in your field. But the key, says Stan Joyce, Managing Director of S P Brewery, is to take the long-term view.

Along with Asia, Papua New Guinea has a very young population, with 50 per cent under the age of 18, and it has an increasing middle class.

SP Brewery’s Stan Joyce

This is what will drive growth over the next 30 years, S P Brewery’s Managing Director, Stan Joyce, told the Business Advantage PNG Investment conference in Sydney.

‘There’s significant headroom for capital growth, and significant space to create a market for goods and services. We’re located near to Asia, the fastest growing area in the world.’

Heineken-owned S P Brewery has been operating in PNG since 1952. Joyce has been MD since 2007.

Stay ahead of the curve

Admitting PNG is sometimes ‘a challenging environment’, Joyce says it is important to ‘stay ahead of the curve with capacity and efficiencies to ride out the highs and the lows’.

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‘If you’re planning a manufacturing business in PNG, you have to accept that the nice little 2-2.5 per cent growth that the economists and all those wonderful people in suits on the other side of the world want to have happen, won’t always be [the] case in PNG.

‘Sometimes I go to meetings and tell the bosses about a 10 per cent growth in sales and they’re wondering how you did it.

‘When you’ve got to explain a 15 per cent drop they want to know what you’re not doing. But you need to have that long-term view.’

Changing consumer needs

A trading post showing SP’s branding. Credit: S P Brewery

Consumer needs are changing. PNG people today are far more educated, experienced and far more travelled, according to Joyce.

S P Brewery was previously very much a one-brand company, he said.

‘It became very obvious, as we could see the consumer face changing in PNG, that we needed to expand our portfolio. The need to offer experiences to different consumers was very, very important,’ he said, citing SP’s new apple cider range.

SP Brewery has invested K350 million at its plants in Lae and Port Moresby, and upgraded packaging lines. It will also start using locally-produced cassava in its beer production from the middle of 2018.

‘I want to have something I can produce to an international standard and I would say to anyone coming in the first time, don’t try and take shortcuts.’

Partnerships

Joyce says forming partnerships in PNG is ‘very, very important’. He said that meant engaging with landowners  and civil society.

‘Land ownership structure is one of its strengths. [There are] not too many places in the world where so many Indigenous people can point to a piece of land and say that’s where I come from. That’s the starting point to look at land ownership. In PNG we always have, and must, speak to the landowners.’

Local training

Investing in local talent is also absolutely crucial, he added.

‘Air Niugini prove how important that is. We’ve now got PNG pilots not only up front in all the planes we fly around PNG, and some of these guys are A380 pilots in the Middle East.

‘Just trying to educate people for the local level is not where you need to be in the game. It’s got to be to an international standard. So that’s a ground rule: that you invest in training of your staff to an international standard.’

Comments

  1. Norman Manarip says:

    Thanks SP brewery of having the idea of training local people. I fully support that.

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