Peles Rice: Doing good while doing good business

KEITH JACKSON

PELES RICE LTD WAS ESTABLISHED IN BOUGAINVILLE to import, fortify, pack and distribute Sunlong quality rice at the same price or less than competitive brands.

The company is the brainchild of Tim Ashton, an Australian farmer, developer and human rights activist – which I agree with you is an unusual combination.

It’s also run by an impressive board of directors, which includes chairman Simon Pentanu (former chief ombudsman of PNG and chief administrator of Bougainville), Stan Basiou (chairman of Kalang Advertising and adviser to the Bougainville government), Albert Kinani (managing director of South Bougainville Engineering) and Lawrence Mattau (director of Bougainville Veterans Holdings).

The general manager is Peter Tareasi, former group accountant of John Lysaght PNG Limited group of companies and current government and landowners liaison manager. with the Bougainville Islands Group.

Peles Rice is a commercial company (that is, it seeks to make a profit) with a strong social motive – to establish in Bougainville an industry that will make available a staple product at a highly competitive price.

The PNG rice market is currently controlled by Trukai Industries, an expatriate owned monopoly with over 95% of the market. By the time this rice reaches Bougainville, it is very expensive.

Peles Rice will be able to cut costs by acting as its own wholesaler selling direct to stores, cutting out the middleman so to speak.

It’s a great idea for a region of PNG that’s been doing things tough. But, as diligent readers will recall, there is a major problem.

While Peles gas secured some solid investment to date, it still requires another K550,000 ($250,000) to actually get going.

So the company is looking for additional investors or loans.

PNG financial institutions have clammed up on lending to Bougainville, and Peles Rice is a victim of this.

Perhaps there’s a feeling there’s too much risk involved, but, as Tim Ashton says, Bougainville is open for business and the north is probably one of the most peaceful regions of PNG.

Initially, Peles Rice will service the northern centre of Buka as far south as Wakunai from a proposed factory and distribution centre in Buka.

Production and distribution from places further south such as Arawa and Buin will not take place until the directors are comfortable with the security situation, especially in relation to the large amounts of cash that the business can generate.

For further information on this project, contact Tim Ashton at tim_ashton@bigpond.com.

Comments

[Tim Ashton]

Different model Leonard.

It would have been no trouble for me to do the same as you are doing with Sankamup Rice, but having the rice packed in Thailand increases price substantially and doesn't employ 20 persons (primarily women who will use the money to feed, clothe and educate their children) on a full wage as our initial operation in Buka will do.

Also, by not paying the Thais to do the packing it gives Peles the margin to compete with Trukai, should Trukai wish to enter into a price war.

I also share your sentiment over wanting to distribute Bougainvillean grown rice.

I have made a number of presentations in Canberra to the like of Richard Marles on having AusAID seriously suppport the development of a commercial rice growing industry on Bougainville. (You know how much each tonne of rice costs to ship from S E Asia to Bougainville :))

I would be generous if I said they (AusAID) just didnt get it.
As you and I both know, the AusAID program needs a total overhaul as to why it exists and how it can help.

[Leonard Roka]

Keith - Looking for external capital is not necessary as I see it. We can do it. I am a board member of a group in Kieta that is a merger of three small business operations specialising in different activities.

One of this is Bitco Limited that imports rice from Vietnam pre-labelled as Sankamap Rice and distributes it around Bougainville (Centarl and South).

The point is, we did this without any massive capital investment. Just took off with a single ship 25 tonne container in 2011 and we reach five containers during the 2011 Christmas.

I hate this, however, coz we are distributors and not planters of rice on Bougainville.

Anyway, it is still ongoing.

Management of finance is a problem for Bitco Limited. It does not beg for loans or external capital.