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full of anaka you’re watching to business and to all our viewers who are joining us from around the region welcome to the show this week on talk business we’re taking you to the land of the unexpected that’s right we’re in Papua New Guinea and we’re featuring several ventures that have made their mark across various industries in Papua New Guinea first up PNG balsa the world’s second largest balsa persisting factory based in the tourism hub of PNG in Kakaako in Rabaul join us as we show you what it takes the process to specialize softwood and how this business is helping several thousands here in this growing community Appling agini is one of the most culturally diverse countries and the world it’s home to over 850 indigenous languages and at least as many traditional societies out of a population of just over seven million people geologists say PNG is one of the world’s least explored culturally and geographically it’s also considered one of the most rural nations PNG is arguably the Pacific’s powerhouse and its economy is projected to grow at six percent this year while the mineral boom makes up for most of its exports other commodities like coffee copra palm oil and timber are also gaining momentum and this is where the bolsa industry comes in balsa is a relatively fast-growing plant found primarily in Central and South America in fact Ecuador supplies ninety five percent or more of commercial balsa but in the early 1980s balsa was introduced in Papua New Guinea in the East New Britain province as an alternative to cash crops such as cocoa and copra because of its shorter rotation today this province in PNG is home to the country’s largest balsa plantations and harnessing that potential is a PNG balsa company based in kakapo the company is involved in the growing harvesting manufacturing and exporting of balsa wood products to markets in Asia Europe USA China India and Australia established in 1997 the company is one of the few fully integrated balsa growers and manufacturers in the world what’s interesting about the PNG balsa company is that it works very closely with land owning units while the company has leased land to plant balsa around 75 percent of all its business needs are sourced through joint venture agreements with landowners since 2009 PNG balsa started planting 700 hectares of balsa per annum on shared farm land belonging to PNG landowners this results in a partnership with over 45 major landowners we have 75 percent of our business which is toe wisdom to landowners means we don’t own the land we rent we make an agreement with them what we could receive a joint venture agreement and this agreement stipulates that we put the we put the seedlings we a manager plantation we make sure that after five six years when the wood is ready and when we need the wood we cut it we harvest it and we proceeded and at this time at the end of this period when it’s harvested we’d pay a dividend to

the to the landowners pierre is the visionary man who heads the company he has extensive knowledge in the balsa industry having worked for the world’s largest balsa processor in Ecuador for almost nine years yet he still reckons PNG grows the best quality balsa for various reasons we have a stable climate with a stable temperature although you have to move from 25 to 35 degrees it’s very humid it’s very rich the soil is very rich and we get a lot of Sun a lot of light which helps the growth of the of the balsa so it’s a perfect condition for the banza and I don’t are not afraid to say that we have because of this climate and there is this special location we are in the world we are recognized as the best pals a quality worldwide now balsa trees grow best in warm climate with plenty of rainfall and good drainage for that reason the best stands of balsa usually appear on the high ground between tropical rivers and no one knows this better than Rex gravich who manages the harvesting process of the plantations our system of harvesting is very low impact on me on the on the ecology or the environment we only have a limited amount of heavy equipment but the harvesting is done all by labour the trees that cut down their skin and loaded onto bins all by labour and we only have trucks and a few tractors as heavy equipment so you know environmentally it’s very very friendly Rex also works closely with villagers providing technical advice on how to tend to balsa plantations he must ensure there are enough logs to supply to the factory on a daily basis for efficient production process the volume of wood required by the factory is 4 to 500 cubic meters per day which equates to about 1820 truckloads and around about I’d say eight thousand ten thousand cubic meters per month we’re one cubic meter sorry one hectare yields about 300 cubic meters per hectare so 300 is about 600 700 trees per day now the landowners have a lucrative agreement with the balsa company while they own the land they don’t literally get involved in the task of planting the trees all work carried out in the balsa plantations are done so by the company’s workers the landowners merely benefit from the royalties earned from the land but they benefit to a local people to the shareholders they have been benefited through a spin-off jobs and also with with the money Paris’s royalties will pray thou shouldest give it and and also it torture creates job opportunities for people the landowners agree this joint venture works in their favor not only does it create sustainable jobs but provides them a secure source of income – normally here we don’t have any money to start off business we so PNG balsa as a gateway to grow in partnership okay as they grow Bahamas we also grow and this has been the situation with us today mostly our local companies don’t have the financial capacity to develop large areas so joint ventures a good thing good ID from the owner of the company since the very beginning has been to have joint went to your agreement with local people in order again to support the community we could have bought four or five thousand hectares of a jungle of old plantation and n make a long plantation there we didn’t want to do that we decided to go

with joint venture with local people so we have a huge interaction from them every every week we have interaction with those people we are always in contact with them say photo op what we do and based on that is we have been the cost and very good relationship with them knowing us to be seen as a as a good company Rolle balsa wood has a high moisture content so it must be dried in a kill for at least two weeks before it can be used commercially the drying process creates an ultra-light wood that is usually cut into sheets or round dowels a PNG balsa operates a state-of-the-art green’ mill an ultra-modern kill and has a thorough finishing process top business will take you through the production chain here we’ve started dressing up to work so here we cut off the top and the bottom of the the cans that we call them and then after that we ascend them to the straight line so do further dressing well here the dressing of the world is more or less complete so here we thought they would cut it into smaller pieces in order to try and get all the pits and not that might be in the would remove once the wood has been cut into certain sizes and ready for the next process here we take the individual borscht then we move them into what we call slabs and then they have to harden for 30 minutes then afterwards we take them out we take different flats and blend them according to their weight and then we actually weigh the entire block keep them within their customers environment then upwards we apply glue and then we take this and do them into one big block you in this area we check the blocks and then we cut them up into panels and then afterwards we have a lot of our production guides then mark up any defects so again it could be pitting nuts it could be holes in the panels then after this bin mark these guys here they drill the defects and then we replace that with clubs that we’ve made in the ranch well basically here with the panel’s go into the dehumidifier and then the QC checks the communities within the certain specs and then when there are that then we’ll send them to our Sanders and then again our fuses have a look at the panel to see if the standing process revealed any hidden people in the world and of course the descending is within specs now balsa cultivation is an attractive

and competitive land use option for both large and small-scale landowners that’s because balsa trees grow quite rapidly and are ready for harvest within five to seven years so to ensure a sustainable rotation of balsa plantations a nursery is very important Malaga Boris runs PNG Balsas in-house nursery it’s here where the delicate process of seed germination to seedlings are produced we have to produce seed sweets which are viable and which which can be it can guarantee the company more volume in five to six years time so in that we have to first and foremost we have to collect seeds which which are of higher volume which can give give us more volume and of course more volume means more incomes to produce high quality seedlings it’s crucial to perfect the germination process especially when there’s only a sixty five percent survival rate of plants in the nursery we keep them in the nursery from solving that we have a germination set which we germinate the seeds and we keep them for three weeks in the domination set and then after that we transplant them into the spots which here and we keep them for another three weeks then we give them an extra two weeks to harden off here under the set then at eight weeks old we’ve shipped the market all the plantations to be planted the nursery goes hand in hand with the company’s replanting program we are now on our way to one of PNG vulvas largest plantations it’s a 40-minute drive out of kakapo into the interior of the island where the wild balsa trees grow four villages that provide their land for balsa plantations it’s a sustainable alternative to cash crops once the harbour station is complete and landowners choose to engage in another cycle then the replanting phase begins the replanting component of the business lies at the very heart of PNG Balsas quest towards forests two of council stiff occasion or FSC certification what FSC certification does is improve forest management worldwide by creating an incentive for forest owners and managers to follow best social and environmental practices so in essence businesses agree to comply to sustainable and ethical practices of logging and managing forests and in return they receive certification from the International Authority allowing them to seek premium prices for their forestry products for PNG balsa FSC certification can open up a host of new opportunities it gives to the customer the guarantee again that when we use wood we don’t have children working for us we don’t do things with the storage environment and we do see in the way so we protect the population around us you know in these countries there are a lot of people are not living in cities they live in the jungle and there are a lot of area where they go they own garden where they have their own religions a tool show where they where they where they meet with each other we have to protect those things we cannot just comment plum bands and destroy everything we want to keep the specificity of this country and to respect what is important for the community and helping PNG Bowser achieve FSC certification is the European Union funded increasing agricultural commodity trade project or the I act initiative which strengthens the export capacity of Pacific countries across various industries from agriculture forestry aquaculture and livestock the idea behind the European Union ayuk project is to get businesses to realise their potential and help them grow through financial or technical assistance for the European Union it’s all about empowering the private sector especially small businesses to become export ready I think it’s one of the most important programs that we have that the European Union has for the for the Pacific and it’s really focusing on the private

sector it’s focusing on helping people to really begin to export their products they are working in a range of different product areas and we’re really making companies more companies realize what they have to do in order to compete not only within the countries that they work and but also internationally the success of those ventures like PNG bowls and others that the i-x supports is an indication of just how much export potential there is out here in the Pacific well we felt that in the Pacific there are a wide range of agricultural and Fisheries products which do have a market they are they are natural products and very often they can be exported successfully if they’re correctly marketed if they’re correctly processed for PNG balsa the European Union ayuk project has been assisting the company achieved FSC certification by helping them conduct an environmental impact assessment social impact assessment fade Improvement Program project management training and Admiral extension services they have sent a couple of experts to come here and to assess again our ability to become FSC certified because it’s requires processes in place and a way of working which is which is quite quite rigorous and the frame which we need to follow and this had been for us a huge help to have those people coming in helping us to put in places as the FSA certification so by being FSA 35 the european community helped us but by having the certification we can help from the european community to grow closer to go in to continue to work with banza because they have the guarantee that our wood production is done in a way which is economically viable and which is sustainable for the country dear FSC certification will certainly set PNG balsa apart from its competition it’s the way we can differentiate ourselves from the competition which are not there because we are fully integrated we have our own plantation where we manage the tree ourself our chain of custody is entirely controlled and by doing that we have access to customer we want to have an FSC certification so by being FSC certified we will be able to deliver the customer in Europe and we’ll be able to give our markets a marketplace we are number two in the world and we want to remain but number two in the world in thermal volume but also in terms of quality we want to be at a level of quality we are what customers expect us to be and FSC certification will clearly be a big help for us without that we might not be there in a couple of years for a company which has over 2,200 dedicated employees and with over 7,000 people that indirectly rely on it for their livelihoods PNG balsa plays an important role for those within the kakapo community apart from just being a mere employer PNG balsa realizes its responsibility to the many that depend on it and believes that its vision of promoting environmentally appropriate socially beneficial and economically viable balsa plantations will allow sustainable growth for many generations to come and that’s the show for this week would love to hear from you so do send us an email talk business at Phoebe tv.com Dhananjay remember you can catch me on the net on a youtube channel as well as our Facebook page and if you have a Twitter account follow me at Rachna vgtv until next time have a productive week you

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