Business and Development

UK Crown Agents to take a good look at Pacific investment

No immediate reactions are likely to follow visits through the British Islands territories in November by two Crown Agents, Messrs.

E. A. Morris, of London, and W. Walter, Sydney-based representa tive for Australasia and the Western Pacific. But the calls will be nonetheless significant because this 136-year-old arm of the UK Government is in the process of taking its longest yet look at in vestment, technical and developmental opportunities in the Islands.

Known in the Pacific primarily as stamp agents for several territory governments and Australian depend ency administrations and as a diversi fied “Customs agent” for supplies and workers to British territories, Crown Agents has resources capable of doing far more.

Its world-wide interests include extensive investment research facil ities, big industry contacts, engineer ing, shipping and procurement know how and loan raising resources.. The group has a 40 per cent, interest in a West Indies bank, through which it offers merchant banking services, and has contributed to loans floated by the Fiji Government.

Through its Sydney man, Mr.

Walter, who knows the Islands well, the Crown Agents has a receptive ear open to development projects proposed by Islands governments.

The group, which likes to call itself a “public service” rather than a de partment of the British Government, has funds ready for investment in viable schemes which need not necessarily reap big profits or returns in the first year or two. Long-term investments are favoured.

Not interested in hotels

But Crown Agents will not be building hotel resorts —the group has no direct tourism investment and isn’t contemplating any.

Islands governments have not in the past pressed hard enough to bodies such as Crown Agents for financial or other help.

For example, the idea put up several years ago that a Pacific Islands Stock Exchange be set up in

Suva, Fiji, has lately interested some therefore created difficulties for us

Americans who wouldn’t be adverse to the proposed exchange being in Port Moresby, New Guinea, instead.

But the intricate knowhow financ ing and technical experience to start an exchange wouldn’t be outside the ability of Crown Agents.

Whatever the project or scheme, the fact remains that there’s much that can be done now—unless most Islands territories want forever to be economically dependent on countries such as Britain. And hopes are that as a result of this tour the Crown Agents will find a way of doing more.

Aussies on Nauru

may have to pay

home taxes by 70

Under new legislation to come into effect in 1970, Australians working in Nauru will be subject to Australian taxation on their income. President Hammer De- Roburt told the Nauruan Parlia ment at the end of August that this had caused great “concern” on the island, which traditionally has never imposed taxation.

“This new situation in Australian legislation, has placed us on precisely the same footing in the eyes of Aus tralian taxation, as any other country which is a foreign country to Aus tralia,” he said. “This change has

which have hitherto never existed.

They arise out of continuing to employ experts, advisors and staff from the country to which we have had a long association and traditional ties.

“However, expatriates from coun tries other than Australia appear to be able to come here without being subjected to tax on their Nauruan earnings in their home countries.

There is an easy way out of this in that if we impose taxes here, then under existing Australian legislation, Australian residents working on Nauru would be exempt from Aus tralian tax on their Nauruan earn ings.

“We, however, have never had taxes and do not see the need ever to have taxes. The thought of the imposition of taxes on Nauru is in fact, contrary to our desires and traditions, as is equally the thought of imposing a discriminatory tax structure which would apply solely to Australian residents working on Nauru so that they may be exempt from Australian taxation.

“Accordingly,” he continued, “we are continuing with our negotiations in Canberra in an endeavour to over come this problem to the mutual satisfaction of all concerned.”

Copra prices move

upwards

Mr. K. G. Oliver, deputy-chairman of the Papua-New Guinea Copra Marketing Board, gave the following report on September 19: Although copra prices remained firm in August and the average for the month finished at $A180.42 (some 38 cents better than July), there was really little activity in the market from the devaluation of the French franc until the first week in September.

Even so, prices remained steady and with the September resumption of trading have made substantial gains. From their level at about SAIBO at the start of the month, prices have moved up and presently buyers are offering as high as $AlB6i c.i.f. Northern European ports for September/October shipment.

Equivalent gains have been re corded in most sectors of the oil seed and oil market with the best gains for groundnut oil. Here, buyers have advanced their prices by as much as £Stg.6 per ton. Coconut oil has followed the upward trend with some quite useful gains.

Cars to be assembled

in P-NG soon

PNG Motors, New Guinea’s publicly-listed motor dealer and taxi operator, anticipates assembly of vehicles in the territory will begin late in this financial year or in July, 1970. The firm’s plans, to set up a motor vehicle assembly plant, are under consideration and negotiation with the NG Administration.

PNG Motors said late last year it wanted two plants—at Port Moresby and at either Lae or Madang. It hoped to assemble Land-Rovers, British Motor Corporation com mercial vehicles and Mini-Mokes and a director of the company, Mr. A. A.

Morris, said the company was also considering building a small passenger vehicle in NG.

The company has not made any other references to the small passenger vehicle in its 1968-69 report, issued recently.

In the report, PNG revealed it made a $121,517 net profit, a profit rise of less than $2,000 on the previ ous year. The latest profit repre sented an earning rate of 20.95 per cent, on current paid-up capital of $580,000.

A final dividend of 12i per cent, was paid to shareholders and directors

warned that tougher times could be ahead: “It is important to draw shareholders’ attention to increasing competition being encountered now and to be faced in the future, to achieve and hold our markets, par ticularly in the field of motor vehicle sales,” they said.

BNG quietly

does well

Pioneer Papuan growers, British NG Development Company Ltd., re leased a bumpier annual report recently.

BNG, established in Papua before World War I as a grower and trader, and since the 1930’s as purely a rub ber, copra and cocoa producer, has rarely done better than it’s doing now.

The company’s 2s. (Sterling) shares, quoted only on the London Stock Exchange, were recently changing hands at a little over 45., offering a yield of over 12 per cent, from the recently-announced 25 per cent, dividend.

For the year ended January 31 this year BNG made a trading profit of £5tg.195,170, compared with a profit of £113,794 for the previous year.

And that’s on a paid-up capital of only £438,750.

No wonder directors lifted annual dividend 6J points to 25 per cent.

A breakdown of 1968-69 figures shows $88,086 was earned from rub ber, £156,479 was earned from copra and £2,995 came from cocoa output (before working expenses).

BNG has made its mark with the development of rubber in Papua, pioneering early experimentation into clonal seeds.

Average selling price per lb was 20.29 pence (18.47 and. in 1967-68) for a production of 2,881,890 lb (2,818,900 in 1967-68). In 1968-69 yield per acre was 716 lb, a slight drop on an average of 723 lb in 1967-68.

Two Papuan estates—Doa and Ifi kinumu—boast 5,094 acres of mature and immature trees. Estate working costs rose by 2.27 and. per lb in 1968-69.

Directors say production for the first four months of the current finan cial year (1,005,000 lb) has shown an increase of 8.25 per cent, over the same period in 1968 and they expect a total crop of three million lb.

BNG’S copra production comes from six plantations—Hisiu Beach, Baubauguina, Gadaisu, Otomatu, Paila and Waigani. Over 8.000 acres are planted, which in 1968-69 produced 3,284 tons at an average selling price of £BO a ton.

Working costs rose by £1 per ton and the good production, directors say, is the result of “more evenly

distributed rainfall over the past two years”. Production this year is “well in advance” of 1968’s figures (1,200 tons for first four months) and a crop of “in excess of” 3,000 tons is expected.

The company’s cocoa—inter-planted with copra on the Baubauguina, Paili and Waigani plantations—totals 1,070 acres of mature and immature trees.

Production in 1968-69 was a dis appointing 1,073 cwts (it reached 1,877 cwts in 1965-66) at an average selling price of £284 per ton.

Summing up prospects for 1969-70 they say, given stable commodity prices and an evenly distributed rain fall, things should be “excellent”.

Port Moresby manager is Mr. B.

Fairfax-Ross and Sydney agents are F. C. Tracy and Cos. Pty. Ltd., who handle several other plantation in terests. BNG’s London-based chair man, Mr. L. A. Worley, will visit NG and Australia in October. Other direc tors are Messrs. D. Owen Jones, M.

B. Baring, L. J. D. Mackie and T. A.

Tweedie.

Fiji manganese shares

will be a good buy

February next year could be the time to buy shares in Fiji manganese miner, Southland Mining Ltd. A heavy increase in the supply of Southland scrip on Australian Stock Exchanges could happen at this time.

Former owner of the firm’s man ganese properties on north-west Viti Levu, Mr. Hari Akhil, received 1.6 million of the company’s 25 cent shares for consideration of his pro perties.

By comparison, the public issue

totalled only 2,152,000 shares of which 550,000 went to institutions and investors outside Australia. Exist ing capital was 1,248,000 shares and total paid-up capital $1,250,000 in five million 25 cent shares.

Under agreement, Mr. Akhil’s shares cannot be sold before February 6, 1970, and the same restriction applies to several other smaller share holdings of directors. Sales of the shares have varied from $4 to $1.82.

They were recently firming around the $3 mark.

Beetle control project

to be extended

The UN/SPC rhinoceros beetle control project is to be extended a further 2J years from its five-year term ending in November. This was decided at the sixth meeting of the Rhinoceros Beetle Operations Board which ended in Apia recently.

Representatives of the six con tributing South Pacific governments attended the meeting in addition to a member of the South Pacific Com mission and observers from the UNDP, FAO and Tonga.

The board was encouraged by re ports of seemingly good progress in the control of this beetle in Western Samoa coconut plantations over the past six months, following the release of a virus attacking the beetle.

This Rhabdion-virus has now spread to other parts of Western Samoa. Originally discovered in Malava in 1963 and obtained by the South Pacific proiect in 1967, it may also be used in Fiji and Tonga.

Meanwhile the control proiect is appointing anew manager, following

the resignation of young Australian Mr. A. (Mick) Catley, who is to re turn to entomology work in P-NG.

Profits double for

Papuan rubber

Lolorua Rubber Estates is the first Papuan rubber producer to show improved results reflecting the greatly-improved world natural rubber prices over the past year. The company has announced doubled profits for 1968-69 and resumption of dividends at a five per cent, annual rate.

Lolorua made $13,948 profit ($5,935 in 1967-68), an earning rate of seven per cent, on its $200,000 paid-up capital.

In PIM, April, p. 118, Lolorua, together with other Papuan rubber producers, were recommended as re covery investments. This company and another, Rubberlands Limited, were especially noted because of their asset backing (over 80 cents) m relation to their selling prices on Aus tralian Stock Exchanges (30 to 40 cents). Lolorua is still 40 cents.

Rubber prices in recent months have continued to hold the 25 pence (Sterling) a lb mark with indications they could go higher. Tests with high yielding trees in Malaysia have shown costs can be reduced to about 10 pence a lb (current Papuan costs are about 16 cents) based on plantings with average productivities of oyer 1.000 lb per acre per year, excluding replanting expenditure.

Where output was increased from 600 lb to 1,200 lb an acre per year, production costs were reduced by fourpence a lb.

This research is due to large-scale look into producing better and cheaper rubber since 1960 because of the continued threat of synthetics.

Results have so far shown that natural rubber can withstand synthetic products. .

' The latest rubber trees in Malaysia can produce up to 3,000 lb an acre, where the average output in 1960 was 600 to 700 lb an acre.

Sporting pool scheme

tor Fiji now

Mr: H. G. Pearce, who last year made a vain attempt to promote sporting pools from Norfolk Island, and earlier this year came to grief with a far more ambitious pools scheme which did get off the ground in Nauru, is still interested in the pools business. This time in Fiji.

Mr. Pearce, who is not now con nected with the Nauru company, Pacific Sporting Pools, not operating

now, was recently visiting Fiji where he was planning a Fiji Racing Pools operation. He was planning to register a company called Fiji Sport ing Pools, apparently associated with a Norfolk Island company.

Coupons were being printed in September but apparently there was much to be done before the opera tion could begin.

One coupon seen by PIM invites investors to predict the results of Brisbane, Melbourne and Sydney races. The coupon offers “an exciting way to win big money, big cash prizes every week”. Investors were invited to bet stakes from five cents up to sl.

A Suva source said profits from the pools were to be earmarked for the establishment of a greyhound racing track in Fiji.

Solomons copra

production up

Copra production is up on last year—but prices have recently been reduced by $lO a ton for the three grades. That’s the current Solomon Islands copra picture. In the first six months of this year Solomons copra output stood at about 12,000 tons.

This compares with just over 10,000 tons and 13,000 tons in the first halves of 1968 and 1967 respectively.

Biggest gains have been in the Western and Central Districts.

New copra prices are $l2O a ton, first grade, sll6 a ton second grade and $lO6 a ton third grade.

Fiji's sugar

inquiry ends

Lord Denning, Britain’s Master of the Rolls, hopes to complete work by December on a document which will have profound implications for the future of Fiji.

It’s the award Lord Denning will make after ending his work in Fiji in September as arbitrator in a dispute between Fiji’s cane farmers and South Pacific Sugar Mills, the colony’s only sugar miller, on the terms of anew contract for the growing, harvesting and purchase of cane.

The present contract, due to expire in March next year, came into force nearly 10 years ago.

The millers pressed for the present contract to be retained. The growers asked for it to be scrapped and for new provisions to be introduced.

Lord Denning faced a potentially explosive situation. Ranged on opposite sides of the Parish Hall at Lautoka, scene of the tribunal, were growers’ representatives from the ruling Alliance Party and the

opposition National Federation Party.

For both parties the tribunal was more than just a straight-out legal battle between farmers and millers.

It was also a fight for the votes of the 15,500 growers.

There were also those present at the tribunal who for many years have nursed a deep dislike, bordering on hatred, for “the monopolistic CSR and its subsidiary South Pacific Sugar Mills”.

Lord Denning poured oil on troubled waters. He charmed every one with his smile and made exactly the right remark whenever a diffi culty arose.

Initially, millers and growers’ counsel had been concerned about the way Lord Denning was handling the proceedings. They felt he was too lenient, and allowed irrelevant issues to arise.

But by the time the tribunal ended it was generally agreed that Lord Denning’s technique had been the right one. No one can complain of being gagged.

Crux of the tribunal was the question of the price to be paid for cane.

The Federation’s demand for a minimum price of $lO a ton was un realistic. The Alliance worked out schemes for sharing the proceeds on a percentage basis, and many people wouldn’t be surprised if Lord Denning adopted the Alliance’s concept of a price formula.

The Alliance took a political risk by briefing an Australian Queen’s Counsel. Mr. Gerard Brennan, to present its case for the farmers.

But Mr. Brennan proved to be a good buy. His grasp of even the most technical aspects of sugar pro duction made him a formidable company opponent.

The Federation lawyers, too, scored on several issues and gained concessions on a number of points from the company.

Both millers and growers are now hopeful that Lord Denning will give them satisfaction.

Good results for

Fiji rice scheme

Fiji continues to make rapid pro gress towards eventual self-sufficiency in rice.

The government’s 250-acre pilot scheme in the Rewa Valley is already proving so successful that 46 farmers in the area expect to increase their yields by four times this year.

Because of newly-irrigated fields and the extensive use of fertilisers and insecticides, the farmers will now have two crops a year.

Under the old one-crop-a-year system, the farmers were only able to produce less than a ton of padi to the acre.

With the new method, they are able to harvest up to two tons of padi to the acre —twice a year.

An Agricultural Department spokesman said the farmers, all Indians who hold leases on the land, were initially critical of the new methods. “Now that they’ve seen the type of rice crops being produced, they’ve changed their outlook”, he said.

If the present project is com pletely successful, it will be extended to cover the 13,000 acres of rice land in the Rewa Valley and an additional 13,000 acres on the Navua Flats.

More oil palm

for New Britain

A second smallholder oil palm scheme is to start in New Britain. It will involve the establishment over the next three years of a further 980 settlers on blocks of 15 acres.

Each settler will plant a minimum of eight acres of oil palms and an area of food crops.

It was decided to proceed with this second scheme because of the good progress being made by the first scheme which involved 580 settlers. At the end of June this year about 280 settlers were established and planted over 1,000 acres of oil palms. The remaining settlers for the first scheme have been established and are expected to have about four acres of oil palms planted on each block by the end of the year.

It is expected that the first 390 settlers for the second scheme will be established in the Buvussi Sub division about mid-1970. The two smallholder schemes when fully estab lished will have a total of 12,000 acres of oil palms in 1973. At full production in 1979, it is estimated that the export income from the two schemes will reach about $4 million a year.

320,000 tons

of copper ore

Reserves of 320,000 tons of ore averaging 5.2 per cent, copper have been proven in an old mining area 17 miles inland from Port Moresby, Papua-New Guinea, and plans are afoot to float anew company in P-NG and Australia later this year to develop the reserves as the ter ritory’s second copper mining ven ture.

Two Melbourne men, Mr. Keith

Turner, a mining consultant, and Mr. L. M. Gross, a businessman, together with other businessmen, are spending about $125,000 on ex ploratory work on the reserves, at Laloki in the Astrolabe mineral field.

Available records show that between 80,000 and 85,000 tons of copper have been produced by several mines on the field between 1907 and 1965. Three mines contributed significantly. They were Laloki, 40,000 tons, Dubuna, 20,000 tons, and Sapphire-Moresby King, 17,000 tons.

The 320,000 tons of proven reserves also average 4.1 dwts. per ton gold and 10 dwt. per ton silver.

About 50 per cent, of the reserves could be mined open-cut and it’s understood about $2 million would be needed to set up a mine and plant facilities.

Three unnamed international miners are believed to be interested in a share. • Mr. Gordon Thompson is the Income Tax Review Tribunal for Papua and New Guinea, for the next three years. Mr. Thompson was admitted to the bar of the Queens land Supreme Court in 1953 where he practised for 13 years and in January was appointed a member of the Board of Review.