I am Chris Fidelis. I am 36 years old and a Papua New Guinean citizen by birth. I have completed my Master’s Degree in Agriculture at the Papua New Guinea (PNG) University of Technology and am currently employed by the PNG Cocoa Coconut Institute as an Agronomist.
I am planning to leave formal employment and therefore I have recently registered my private business ‘Pacific Agriculture Support Services’ or PASS as part of my start up and commitment to become a local cocoa dry bean buyer and exporter.
Cocoa is a dominant crop in both small islands and inland areas of Manus Province, a remote island province of PNG. The island lacks permanent cocoa markets that can provide buying services. This is an opportunity for me to become a service provider in buying dry cocoa beans from farmers and exporting to overseas chocolatiers and processors as single-origin cocoa.
My project is to establish a small cocoa depot in Lorengau Town, the provincial capital. At the depot, I will purchase dry cocoa beans from farmers and store these for quality assessment before export. The project is realistic and eco-sustainable as cocoa is organically grown on the island and cocoa beans from farmers will be sourced from existing trees without new land clearance for new plantings.
The absence of buyers in the province has triggered farmers to ship their own produce to Lae City and Madang Town on the PNG mainland, where major buyers are located and shipping costs are high. This factor, coupled with my local origin and my wish to own and operate a private business earlier in life, has motivated me to submit this proposal.
I am also motivated because international demand for cocoa beans and chocolate has been predicted by ICCO to increase sharply by 2020.
If I get the initial support for the depot, I hope to export 16 bags or 1.0 tonnes of dry bean per month for the start. At a buyer’s price of USD $3 per kilogram, the projected gross revenue per month will be US$3,000.
Over 8 months, the gross revenue will be USD $24,000 and net profit will be USD $9,000. To be commercially independent, 50% of the returns will be re-invested into the business to increase the capital to purchase more raw materials, and to increase the storage capacity as more farmers are expected to sell their produce at my depot. The other 50% will be put into long term investment sources.
The average income of these island farmers and their families is USD $1,205 per household per year, or USD $3.30 per day. My project is expected to increase this statistic by 50%. Farmers and their families will then be able to comfortably meet their basic needs for food, health, education, clothing and shelter.
For my project to be successful, the following steps will be undertaken:
Firstly, my brother owns a lodge in Lorengau town. I will transform available room space at the lodge into the depot, including a basic storage shed to store cocoa dry bean bags, and office space. The storage space will take into consideration pest resistance and food safety.
Secondly, I will carry out awareness-raising activities for my cocoa buying service. This will be through an on-site billboard, posters, and the provincial radio station which is quite reliable on the island.
Thirdly, I will research and identify chocolatiers and processors in Australia and New Zealand, and confirm their interest and requirements before supplying.
Next, I will arrange transport of dry cocoa beans by plane from Manus via Port Moresby, to the chocolatiers or processors. The Cocoa Board of PNG has a freight subsidy scheme that I can hopefully utilize in my project. Considering the remoteness of Manus Island with the use of cargo ships, several handlings at different ports and long voyages can delay arrival of products.
Finally, I will purchase dry cocoa beans, conduct quality assessment and start exporting.
The success of my project is based on the concept of single origin cocoa, which will command a higher price. The measurable success factors will be the volume of dry cocoa beans purchased and exported every month including the net profits generated.
I already have the tools, equipment and labour required to construct the depot. My project will also utilize an existing export license from the PNG Cocoa Coconut Institute to export our cocoa beans. The institute has verbally agreed and we will negotiate a fee for use of the license.
The average cocoa price in PNG is approximately USD $167 for a standard 62.5 kg bag. However, I will set my price at USD $173 per bag. The capital needed to purchase 16 bags or 1.0 tonnes dry cocoa beans in a month will be approximately USD $2,768. This cost will be incurred every month for 8 months, at the commencement of export and afterwards.
Transport costs involved in sending samples to buyers for analysis, moving cocoa beans to the airport, and airfreight charges will be USD $1,716. These costs will be incurred every month for 8 months and afterwards. However, if the buyer is able to meet the costs, that would be a bonus.
The miscellaneous costs for 8 months will be USD $516 and include communication, electricity bill, labour for unloading and loading, and recording and quality assessment. I will also assist where necessary.
Blogpost and picture submitted by Chris Fidelis (Papua New Guinea) – pacificagriculture15[at]gmail.com
The content, structure and grammar is at the discretion of the author only.
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