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Expanding in PNG and Exploring Africa & Indonesia
by PNG Business News - July 15, 2021
Photo Credit: Ark Pacific - Minimal freight footprints, quick and easy installation, high quality steel framing and design diversity characterise Ark’s flat pack building systems; making them perfect for resource projects not just in Papua New Guinea but also Africa and Indonesia.
Flat pack building specialist Ark Pacific is further expanding its business in Papua New Guinea while simultaneously exploring opportunities in both Africa and Indonesia. The company’s growth and international business development initiatives are on the back of 10+ years’ project delivery in Papua New Guinea, primarily in the resources sector.
The first half of 2021 has seen Ark Pacific continue to deliver a diverse range of buildings throughout PNG for multiple resource sector clients. Ark buildings (i.e., mining camps, office facilities, ablution blocks, workshops, senior staff housing, etc.,) are being assembled at both remote inland and island resource operations.
To date, there are thousands of Ark building modules – all assembled by local workforces – to be found across the country. General Manager, Cassius Ruka, who has over 10 years’ experience in PNG’s construction and mining sectors, describes Ark’s building systems as “perfectly suited” to the remote and challenging conditions of resource operations.
“Mining companies prefer our buildings for several reasons” said Ruka. “They are designed and engineered to minimise freight (which in turn reduces client costs and the environmental impact of transporting them), they’re super quick and easy to install even by unskilled workforces, we use high quality steel as opposed to wood which means less maintenance and greater durability, and there are almost endless design options because the modules can be put together in a multitude of configurations.”
Ark’s design team works closely with their clients. Most recently they’ve been collaborating with a major gold mining company on the design of a new minerals testing laboratory. “The client wanted us to do a few things differently and achieve even greater cost efficiencies through minimising the use of on-site concrete by utilising galvanised steel column footings instead which we manufacture ourselves and ship as part of the kit” said Ruka. “We can be very flexible with our designs and the design process and anticipate finalising the laboratory build early in 2022.”
The travel restrictions and cost cuttings brought about by the COVID-19 pandemic have resulted in construction clients all over the world needing to restructure their onsite requirements to accommodate more long term staff. Ark Pacific is responding to these changes by going back to the drawing board for some of its clients. An example of which involves redesigning senior management housing layouts; transforming them into high density accommodation blocks.
The popularity of Ark buildings in PNG’s resource sector inspired Ruka to look further afield to grow his business. “There are plenty of parallels between what PNG’s resource sector needs in its buildings and what’s required by resource operations in many African countries and Indonesia. In other words, our flat pack building systems which are perfect for PNG are equally suited to resource projects over there too.”
Ark Pacific are looking to penetrate the African and Indonesian market via partnerships with Australia’s Mincore and Lycopodium. The companies are working together on feasibility studies on several greenfield opportunities.
PNG Business News - April 21, 2021
Innovative Flat Pack Engineering – 75 % Freight Reduction’
Ark Pacific has cleverly engineered its flat pack buildings to guarantee a minimum freight footprint for its clients. Unlike competing products, six of Ark’s high quality flack pack units are equivalent to a single standard 20 foot shipping container when stacked together ready for transport. Not only are freight costs drastically reduced (by up to 75 percent) but so too are carbon emissions. Furthermore, the ease and speed with which the flat packed buildings can be transported to site is greatly improved. Land freight costs in particular, greatly add to the cost of building in PNG, especially in remote locations. Although Ark Pacific does not compete solely on price, the considerable freight savings associated with its flat pack systems enable it to be one of the lower cost building alternatives without compromising on quality. A recent mining client was able to transport all of the flat pack componentry required for five office blocks, one ablution block and one crib room on just one semi-trailer truck – competing modular products would have required up to eight trucks. In addition to reducing freight costs and therefore the overall cost of construction projects, building with Ark Pacific flat packs also help reduce a client’s environmental footprint. For example, one truck travelling between Lae and the Highlands obviously produces considerably less emissions than eight trucks. Moreover, fewer trucks have less negative impact on unsophisticated road infrastructure, including many of the unsealed and rough roads servicing mining sites. Popular with its resource clients, Ark Pacific products also have the advantage of quick assembly utilising local and unskilled workforces. A basic one-room accommodation unit can be installed in a single day. To date, all of the thousands of Ark modules across PNG have been installed by local content. Ark Pacific’s team of managers are available to oversee any construction project if required. With a 10 year presence in PNG, new resource client projects in 2021 include a Crusher Facility Office and Electrical & Instrumentation Building (both two-storey), as well as the project cited earlier. Ark Pacific is also halfway through constructing a 750 person mining camp (16 x two-storey buildings; 54 ensuited rooms per building). Initially having specialised in camp accommodation and office complexes for the resource sector, Ark Pacific has recently refined and expanded its residential housing product range. Durable and fit-for-purpose designs – ideal for community relocation projects as well as senior staff housing – are now available. Ark Pacific reports that it is not experiencing any supply chain difficulties due to COVID-19. Furthermore, given its reliance on local labour for installation (as opposed to expatriate personnel impacted by travel restrictions), clients have been able to commence their builds as soon as the flat packs arrive on site. To learn more about Ark Pacific, including how its flat pack systems can minimise your construction project’s freight footprint: www.arkpacific.net
PNG Business News - March 15, 2021
Pacific Towing Passes International Safety Audit
Nearly 5 years LTI free and with a record of continuously improving and fine tuning its safety systems, Pacific Towing (PacTow) recently passed its International Safety Management (ISM) Code audit. The voluntary audit was conducted in accord with the International Maritime Organisation (IMO), the United Nations agency specialising in maritime and shipping affairs. The aim of the audit was to assess the effectiveness of PacTow’s Safety Management System with regard to its vessels as well as its shore-based support. The audit was conducted in accordance with a variety of IMO standards and international industry best practice. HSSEQ Manager and Designated Person Ashore (DPA) Richard Hayka reports that the audit, which was conducted by HSE New Zealand, incorporated not only the ISM Code but also the International Convention for the Prevention of Pollution from Ships (MARPOL), the International Convention for the Safety of Life at Sea (SOLAS) and the International Ship and Port Facility Security (ISPS) Code. The audit was conducted online due to COVID-19 travel restrictions. Importantly, Hayka confirmed that the audit verified PacTow’s Safety Management System was in compliance with all mandatory rules and regulations. This is in line with the company’s expectation that it will be certified for ISO standards 9001:2015, 14001:2015 and 45001:2018 by midyear. The audit also found that all annual vessel surveys were up to date and in accord with the National Maritime Safety Authority’s (NMSA) requirements. Furthermore, statutory certificates reviewed as part of the internal audit were found to be valid, and company records verified that all policies were properly implemented. Adding to the safety credentials of PacTow, is the recent employment of an Operations Manager with considerable international oil and gas sector experience, including emergency response – Captain Marcelo Santini. Together, Hayka and Santini are getting ready for another audit; they are preparing PacTow’s dedicated tug base at Motukea, Port Moresby for an International Ship and Port Facility Security (ISPS) gap audit. Hayka says that he expects certification for this next audit to be achieved by the end of Q3 this year. To learn more about Pacific Towing and its safety credentials: www.pacifictowingmarineservices.com
PNG Business News - May 04, 2021
ADB Report Projects Positive Growth for the Pacific in 2021
According to a new report published by the Asian Development Bank (ADB), the Pacific will return to positive growth in 2021. However, the region's outlook is still fraught with dangers, and there is substantial variation among the 14 Pacific developing member countries (DMCs). According to the Asian Development Outlook (ADO) 2021, the ADB's flagship economic publication, the DMC economies contracted by 5.8% in 2020 as the coronavirus disease (COVID-19) pandemic directly impacted tourism and trade flows, as well as construction investment. In 2021, a 1.4 per cent recovery is anticipated, based on increased tourism, the start of long-delayed development programs, and the resumption of labour mobility and cross-border trade. “The start of the COVID-19 vaccine rollouts, both within Pacific DMCs and among their trade and tourism partner countries, indicate some economic recovery is likely in 2021,” said ADB Director General for the Pacific Leah Gutierrez. “However, risks to the recovery remain, particularly in tourism-oriented economies that are feeling the heaviest impacts of the pandemic crisis.” Smaller tourism-dependent economies, such as the Cook Islands, where GDP is forecast to slip by more than a quarter this year; Palau, one of the world's most tourism-dependent economies; Samoa; and, to a lesser degree, Tonga, are likely to stifle overall development in the Pacific subregion this year. Travel bubbles are expected to help these economies rebound gradually, first in the Cook Islands and Niue with New Zealand, and then in Palau with Taipei, China. Overall, the Pacific is forecast to rise at a rate of 3.8 per cent in 2022. With the launch of a planned travel bubble with New Zealand, the Cook Islands economy is expected to contract by 26% in 2021 before returning to 6% growth in 2022, according to the ADO. Samoa's economy is expected to contract by 9.2% in 2021 before rebounding to 3.1 per cent growth in 2022 until full vaccination coverage is reached and foreign visitors are allowed to return. Tonga's building and tourism markets will continue to be hampered by the twin shocks of Tropical Cyclone Harold and the COVID-19 pandemic in early 2020, leading to a 5.3 per cent contraction in 2021. The Tongan economy is expected to expand by 1.8 per cent in 2022, according to the ADO. As it recovers from a pandemic-induced contraction in 2020, Papua New Guinea (PNG), the Pacific's largest economy, is forecast to rise slowly at 2.5 per cent in 2021. However, a new spike in COVID-19 cases is jeopardizing the economy's rebound. Budgetary funding and distribution of COVID-19 vaccines were provided by development partners. PNG's economic growth is expected to pick up to 3% in 2022. Following an extraordinary 19.0 per cent contraction last year, Fiji, the subregion's second-largest economy and one highly reliant on tourism is expected to grow by 2.0 per cent in 2021. Fiji's economy is expected to rise by 7.3 per cent in 2022, assuming a rebound in tourism as a result of strong vaccine services both at home and abroad. Part of the effects of COVID-19 could be mitigated by increased tourism, but it could take many years for the economy to recover to pre-pandemic levels. The Solomon Islands economy is expected to recover, with a growth of 1.0 per cent in 2021 and 4.5 per cent in 2022, according to the ADO, as fishing and construction resume. Work on public infrastructure programs, such as the Tina River Hydropower Initiative, transportation improvements, the reconstruction and extension of water supply and sanitation facilities, and construction for the 2023 Pacific Games, are expected to fuel the construction and related industries. The government's attempts to increase biodiversity are likely to result in a decrease in logging production. Vanuatu's economy contracted in 2020 as a result of COVID-19 and Cyclone Harold's trade and travel restrictions. A tentative turnaround is expected as these limits are steadily lifted, with the growth of 2.0 per cent in 2021 and 4.0 per cent in 2022. This, however, would be contingent on a strong vaccine campaign and the development of travel bubbles with Vanuatu's major tourism markets. In 2021, the North Pacific economies of the Federated States of Micronesia (FSM), the Marshall Islands, and Palau are expected to begin to weaken, with negative growth of 1.8 per cent in FSM, 1.4 per cent in the Marshall Islands, and 7.8 per cent in Palau. However, relative to 2020, these contractions are likely to be more subdued, as the current COVID-19 vaccine rollout eases pandemic-related border constraints that slowed international tourism and commerce. As sanctions are relaxed further and businesses continue, the ADB study forecasts a return to growth for all three North Pacific economies in 2022 (2.0 per cent for the FSM, 2.5 per cent for the Marshall Islands, and 10.4 per cent for Palau). Despite being free of COVID-19 infections so far, the economies of Kiribati, Nauru, and Tuvalu in the Central Pacific slowed in 2020 as trade and travel constraints caused infrastructure projects to be postponed. As these programs return, development in Nauru and Tuvalu is projected to increase by 1.5 per cent and 2.5 per cent, respectively, in 2021. Kiribati's economy will decline by 0.2 per cent as a result of continuing constraints on the flow of goods and people as the world waits for COVID-19 vaccinations to arrive. According to the ADO, construction activity would aid Kiribati's return to economic expansion in 2022, with a growth of 2.3 per cent, while Tuvalu's growth will be 2.0 per cent. With the Regional Processing Centre set to close in 2021, Nauru's growth is expected to slow to 1.0 per cent in 2022. The Asian Development Bank is dedicated to creating a stable, democratic, robust, and secure Asia and the Pacific while continuing to fight extreme poverty. It was established in 1966 and is owned by 68 owners, 49 of whom are from the city.
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.