Sunday, June 13, 2010

Popoitai: Liquidity from gas project a problem

By SHEILA LASIBORI
THE PNG liquefied natural gas (LNG) project will continue to inject liquidity into the banking system over the construction phase.And the presence of increased liquidity is a major concern for the Bank of PNG (BPNG) that must act to diffuse it, according to Deputy BPNG Governor Benny Popoitai.BPNG uses the treasury bills (TB) to reduce or remove liquidity in the banking system.Popoitai said a wealth fund was appropriate to assist in keeping the liquidity level within the banking system at a lower rate.“Our current liquidity situation to date is that we have gone well over K700 billion in liquid assets in the banking system.“Our exchange settlement accounts has also gone over K500 million.“The basic indicator of the liquidity situation of the banks is that when the exchange settlement accounts of the banks with Central Bank increases, it indicates that they increased with liquidity.“That is a situation that we have to give a serious thought in dealing with the liquidity level,” Popoitai said yesterday in Port Moresby during the international and domestic stakeholders’ workshop on the possibility of setting up a wealth fund.“Much of that liquidity is injected from the construction of the LNG project as well as drawdown of the trust accounts from the BPNG,” he added.

OTML, Frontier ink deal on exploration project

OK Tedi Mining Ltd (OTML) has signed a deal putting up exploration farm under a joint venture set up.This will be with wholly-owned subsidiaries of Frontier Resources Ltd (Frontier Resources).The first joint venture (JV) relates to two exploration licences (ELs) for Bulago (EL 1595) and Leonard Schultz (EL 1597)) held by Frontier Gold PNG Ltd (Frontier Gold).The second JV relates to Likuruanga in West New Britain (EL 1351) and two EL Application (ELA) areas (Central New Britain (ELA 1593) and East New Britain (ELA 1592).Each of these tenements is held by Frontier Copper PNG Ltd (Frontier Copper).In a statement on its website, OTML said it was committed to exploration expenditure of US$2.5 million (K7 million) and an additional US$1 million (K3mil) share placement in Frontier Resources.

Investors should buy now, says BSP

BANK South Pacific (BSP) Capital Ltd is recommending that current investors and aspiring ones buy shares now to be able to enjoy a high return in the next two years.This is because during this period, the returns on shares will be up by 51.3% at an estimated selling price of K0.96 per share.The current share price is K0.66.BSP Capital analysts, in releasing the forecasts yesterday, said the number one return would be on Port Moresby Stock Exchange (POMSoX) listed companies.The key points behind the “strong buy” recommendation are: A total dividend of K4 was declared where K2.20 is payable in July this year and a further K1.80 at a later date.“We expected the dividend payout ratio to increase by 50%,” BSP Capital said.The two-year good return on share forecast will be realised because of a successful debt and equity investment in BSP by the International Finance Corp (IFC), which is expected to provide new capital to expand the local book. Another reason was that an anti-fraud technology was introduced to stamp out misrepresentation and deception.BSP said an internal unit was transforming its old systems, processes and procedures to align with “world best practice” and that the electronic banking facilities would continue to expand this year.“There will be 280 installed automatic teller machines (ATM) and the general packet radio service (GPRS) electronic funds transfer at point of sale (eftpos) devices will grow markedly while short message service (SMS) banking will further its growth,” the bank said.

Apec urged to push for free trade in region

ASIA-Pacific Economic Co-operation (Apec) leaders should recommit to achieving free and open trade within the Apec region.They should also agree that a free trade area of the Asia-Pacific (FTAAP) is an inspirational but achievable vehicle for free and open trade and investment within the region.These were part of the five recommendations by Apec business advisory council (Abac) for the Apec trade ministers who meet later this week.In recommitting to achieve free and open trade within region, Apec said they should take into account the fundamental changes in Apec’s economic and social structures over the last 16 years, and the fact that we are now in the era of the post-industrialised knowledge-based economy.“Abac recommends that a new vision is needed, building on the Bogor goals to reflect the changing nature of modern Asia Pacific regional supply chains and value chains,” it said.

Esso releases first quarter environmental, social report

ESSO Highlands Ltd, operator of the PNG liquefied natural gas, has released its first quarter environmental and social report.The report details actions to develop the energy project in a responsible manner while bringing economic success to PNG and providing energy to meet Asia’s growing demand, the company said in a statement.Esso Highlands is a subsidiary of ExxonMobil Corp.It said the report detailed how PNG LNG was implementing commitments made in the project’s environmental and social management plan, which is based on the most comprehensive environmental impact assessment ever undertaken in the country.The report covering January to March this year also demonstrated how the project was contributing to the economic growth of the country through development of a local workforce and suppliers.Peter Graham, managing director of Esso Highlands, said: “Completion of the financing arrangements last March moved the project into a full execution phase.“We are developing this challenging project in a manner that reflects our high standards in business and operational integrity, and importantly in safety, security, health, environmental and social management.“The benefits that flow from the project will support the PNG government’s objective to strengthen its economy and infrastructure base for the benefit of its people.“This is the first in a series of reports that details our progress in this challenging project.”The project is currently at an early stage of a four-year construction period, with activities under way in design, pre-mobilisation and early site works.

New joint venture eyes LNG projects

THE Massco PNG Ltd (Masco) and CoDa PNG Ltd and Associates (CoDA) have formed a joint venture company to engage in structural and engineering designs, eyeing massive projects to roll out from the on-going liquefied natural gas (LNG) development in the country.Massco and CoDA , a South Korean-owned entity, signed the partnership agreement yesterday, in which Masco will have 51% interest while CoDa, 49%The deal was signed by Massco executive chairman Jerome Kairi and CoDA chief executive Joshua Chi, witnessed by managing director Caleb Insun Kim and representatives from both parties.Hailing the signing, Kairi said: “It is a milestone achievement for a landowner company from Gobe petroleum development licence (PDL) 4 in Southern Highlands to join hands with a reputable company from sophisticated country like south Korea.”“It signifies great improvement from the way we have come so far in reaching this agreement.“Now, we want to tell Esso Higlands Ltd that we have the necessary equipment, financial capacity and technical expertise that are readily available to take up bigger task at the top level.“It’s now up to EHL to give us the scope of work for the contracts for EPC as we have met all the requirements,” Kairi said.He said the concept met the national content plan that stipulates landowner companies to participate in the LNG project.When asked what areas the joint venture company was targeting at, he said the new company was targeting projects at EPC2, EPC3, EPC5 A and EC2.Kim said the agreement was a “marriage between CoDA and Massco” and had assured they would live through both in bad and good times”.“We must work together, having in mind that in the future the JV company can be a major project developer like EHL if we work with passion and the philosophy to move forward.”The partnership is backed by LABA Holdings from portion 152, Gobe Field Engineering, the umbrella company for Gobe PDL 4, and Kikori Oil Investment Ltd.Each company owns 10% equity.

Kaukau ‘woes’ traced

By SENIORL ANZU
THE loss of value in marketable sweet potato or kaukau happens at all points of the supply chain from farms in the Highlands to markets in Lae and Port Moresby, according to a survey by NARI and the Fresh Produce Development Agency (FPDA).A stakeholder workshop on “Towards better kaukau supply chain in PNG”, which started at NARI headquarters in Lae on Wednesday was told that such losses happen due to poor handling during transport.Survey participant, Ronald Pam from FPDA, told stakeholders that some of the obvious damage was skinning, broken root and rotten tubers.“Lots of damage occurs at loading and unloading … major impacts lead to lots of broken root.“This results in lots of rotten tubers that can not be sold (soft rot) at the markets,” Pam said.He said such damage reduce the value of kaukau when they appear at the market place.The survey identified that causes include rough handling, different packaging methods, and transportation-related problems derived from handling and high humidity.Pam said damage starts on-farm from rough handling and this snowballed further down the chain.He said the number of broken roots increased through transportation – due to loading and unloading.Professor Barbara Chambers of the University of Canberra, who facilitated the two day workshop, said the event was to sensitise discussions on the supply chain of kaukau, with reference to value adding and post-harvest of kaukau.The workshop discussed how producers could take advantage of recent researches on kaukau disease control and post-harvest handling.

Crowne Plaza boss wins top award

By GEEJAY MILLI
THE much-coveted award from the Intercontinental Hotels Group for this year went to Crowne Plaza Port Moresby’s general manager Tim Pollock.The awards event was hosted in Singapore last week.The award has been considered an achievement not only for the Crowne Plaza but also for Papua New Guinea because the recognition covers countries in the Asia-Australasia region.Other participating nations included countries in Asia, the Pacific and Australia and New Zealand.The award had drawn attention to the vast potential that PNG has as a country in what it has to offer.The general manager’s award of the year looks at categories of financial management of the hotel, guest experience, how well the hotel does as a responsible business and community relations.Pollock received a surprise welcome back from the hotel personnel who expressed pride over his feat.“I am very honoured to have won the award I am privileged to be the GM of this hotel but I am just part of the achievement,” Pollock said.“It is the people who are a big part of this, and I would encourage the staff to keep up the great effort,” he continued.Pollock, who previously lived in PNG, is in his third year as Crowne Plaza general manager.

Home models prove a big hit

By KESSIE TADAP
THE PNG Forest Products’ recently-launched housing models of Niu Homes (NH) have drawn wide interest from prospective homebuyers nationwide.The series of home design-models were advertised in the newspapers.Marketing manager Fred Alblanaida, when contacted by The National yesterday, said due to the large number enquiries from the public, the company would not be able to reply to individual queries.However, Alblanaida said the company was drafting a standard reply which would be distributed through public channels.This way, the company hopes to answer public queries to their new range of home models.Although the company is not new to building and providing pre-fabricated homes for the PNG homebuyers, Alblanaida said the NH range was the company’s new model type of houses which had been specifically designed to give the people quality and affordable housing, which was “perfect for modern tropical lifestyle”.Asked about the target market, he said: “The company’s new home models are catered for people who could afford to buy them.”“From executive to village design settings, the buildings are 100% PNG made,” Alblanaida said.The buildings are termite-resistant as all timber components have been treated to meet Autralian standards, using 100 % sustainable and renewable pine wood.

Kikori landmen bond to pursue LNG projects

MORE than 30 Kikori pipeline landowners have come together to form the only two umbrella companies that would do business with the liquefied natural gas (LNG) project developers and owners.After long years of infighting and business conflict, the 30 landowners have united to form the Kikori Oil Investment and Greenfield Resources Investment as their duly- recognised umbrella companies.In a press conference, the landowners said their coming together had met the developer and the government’s requirements, aimed at speeding up the distribution of spin-off benefits from the gas project.The landowners said their companies were the only recognised companies as far as their people were concerned, adding that individual landowner company business proposals would be withdrawn.Kikori oil pipeline landowner association chairman Bomsy Boviro said they had taken a strong resolve to come together as one and that it was about time the state release their business grants while the developer should now give them projects.Greefield Investments managing director Timothy Irinaya said the issue as to which landowner group should be the main landowner company had been resolved and that they were ready to liaise with the company and the developer for whatever benefits they could get.He reiterated that the government should release the business development grants so the companies could start their business activities.West Kikori LLG president Wilson Baidu said the government would recognise no other groups but the two newly-formed companies.He thanked the parties for coming together for the sake of the people.

6,000 jobs at new tuna plant in Lae

THERE will be at least 6,000 jobs on offer to Papua New Guineans in Morobe province, thanks to the US$80 million (K226.6 million) integrated fish processing plant to be set up here. First phase will cost US$30 million (K85 million) which has a processing capacity of 130mt per day.The national government through the National Fisheries Authority (NFA), together with Morobe provincial government, signed the project agreement with Asia’s Majestic Seafoods Ltd.The 350mt per day tuna processing plant is to be constructed within the Malahang Industrial Centre in Lae.Majestic Seafoods Ltd is a company put up by three major companies composed of Frabelle Fishing Corp (Philippines) operating in PNG as Frabelle (PNG) Ltd; Philippine-based Century Canning Corp; and Thailand-based Thai Union Corp, a subsidiary of Thai Union Frozen Products PCL (TUF).According to company representatives Chris Po, president of Pacific Century Group; Narin Niruttinanon, deputy general manager Thai Union; and Frabelle president Engr Augusto Natividad, they would be bringing into the country and especially in Lae the technical know-how.And in return, they asked for support from the people especially those that will be employed, and the provincial and national governments.But the main ingredient that won the big names in Asia’s fishing industry over to PNG was the raw material tuna in PNG waters, which is part of the Western Central Pacific Ocean (WCPO).Natividad said PNG was rich in tuna and through NFA it had a well-managed fishery in the world.“We will be fishing within that allowable quarter to make sure that fishery will remain sustainable … it is the kind of resource that you can pass on for as long as we fish within that limit,” Natividad, who is also the director for Majestic Seafoods Ltd, said.He also stressed the importance of the cost of production at the plant.“That while we have the raw material here, we still have to compete with all other canneries all over the world. The market is the world.”Natividad said the competition would come from tuna producing countries which included Thailand, Philippines, Ecuador, and Spain among others.“So to make sure that we will have a cost that will be competitive, we need the support of everyone, especially the people who will work with us once the factory is in place.“We have to work together to make this cost competitive,” he said.Natividad commended NFA for having a very good food safety chain in place that was according to world standards, including the European Union (EU).NFA managing director Sylvester Pokajam said the project was a foreign direct investment.He said with Thai Union coming to PNG, a lot of things would change for the better since it (Thai Union) had changed Bangkok to be tuna centre in the world.Niruttinanon said: “While we see the potential for PNG to become next tuna centre in the world, it must be stressed that the key success factor is actually the PNG people.”

Kapris: Policy of govt to see how best to process natural resources

COMMERCE and Industry minister Gabriel Kapris says the policy of the national government is to see how best they can do downstream processing of PNG’s natural resources.And these natural resources includes fish where the government tries its best to find foreign investors who are willing to invest in the country and at the same time agree to carry out downstream processing.“That is promoting government’s policy on downstream processing and creating jobs.“Business is something that is not planted in PNG,” he said during the signing of the project agreement for PNG’s biggest fish project to be staged in Lae, Morobe province.“Spin off business is my concern … I would like you to give specific attention to Papua New Guineas … to see that people on the ground benefit from this project,” he told the gathering including representatives of the three companies heading the US$80 million project (K226 million).Majestic Seafoods Ltd will be the company to develop the project.It was established by Frabelle Fishing Corp. (Philippines) operating in PNG as Frabelle (PNG) Ltd, Philippine-based Century Canning Corp and Thailand-based Thai Union Corp., a subsidiary of Thai Union Frozen Products PCL (TUF).