Business and Development

New Caledonia enters "a phase of intense development"

From GERALD ROUSSEAU in Noumea New Caledonia’s trade for the first three-quarters of this year has already nearly reached the value of trade for all last year. Recent figures show that rising business has induced imports worth SAII9 million, to the end of September, 1970 —just above the value of imports for the whole of 1969.

French goods account for 49 per cent, of the territory’s needs. Next Australian products, valued at $l7 million, supply 14 per cent, of local requirements. The US is third major supplier (7 per cent.) followed by West Germany (6 per cent.), Japan in fifth place (3 per cent.), and Great Britain (2.4 per cent.) supplying $3 million worth of goods.

Exports for the same period have reached Sio4 million, approximately 25 per cent, higher than for the same period last year. Nickel ore and processed metal account for 99 per cent, of the island’s exports.

The insignificant part played by agriculture is registered in the value of coffee exports at $628,000, their volume having risen from 358 to 1,261 tons. Copra exports continue to fall, earning less than $20,000 for 163 tons.

The balance of trade finally pro duced a $l5 million deficit over the nine months, largely because of the rapid rise in equipment imports, required for the expansion of mining activity and associated needs.

Governor Louis Verger says figures for the first part of this year confirm that “the territory has entered a phase of intense development”.

The Governor recently pointed out that Customs revenue (main source of income for the territorial budget) had increased over 50 per cent, this year. To the end of September, the Customs Department collected $2B million as tax on imports and exports (mainly nickel).

The Governor also stated that 5,000 new settlers had arrived, repre senting a 5 per cent, increase in population in less than a year. The Labour Office, in turn, had recorded

3,000 new work contracts in the first half of this year.

The Governor also referred to four missions which have come from Paris over the past few months to study the territory’s development. They in clude an inter-ministerial mission led by Mr. Gerbaux, a mines mission headed by Mr. Bourrelier, Mr.

Mandray making a port study and Mr. Courtoux to contact education authorities.

More recently, a mission of 14 French industrialists has toured the territory, working in liaison with the French bureau promoting overseas trade. This important group came from the French Federation of Machine and Metal-Processing Indus tries, representing manufacturers of all manner of heavy equipment, and were especially keen to contact mining interests in the territory and visit inland nickel centres.

At the same time, leading inde pendent Caledonian mine operator Edouard Pentecost received several representatives of the Caterpillar organisation, whom he represents in the territory. The visitors included the American executive vice-president of the Caterpillar group, as well as its director in Melbourne.

The rapid expansion these indus trialists were able to observe never theless continues to fan the infla tionary spiral. Over the first nine months of this year the cost of living has risen 4.4 per cent. Health pro ducts and services have risen 7 per cent., while prices of foodstuffs have increased 6.8 per cent.

There’s serious congestion in the port of Noumea, where the increase in merchandise has not been met by an increase in berthing facilities.

And needless to say, visitors are not spared the inconvenience (or excitement) of the boom, any more than the Caledonians themselves.

The tourist office reports that over 50 per cent, of Noumea hotel rooms are now occupied on a semi permanent basis by businessmen and their families, unable to find more suitable lodgings. This now leaves only 179 tourist hotel rooms available for visitors to Noumea.

It’s hoped that the new hotel of Mr. Georges Lavoix will be able to receive its first clients next January, Situated behind the South Pacific Commission, at Anse Vata, the 63room hotel is to be called He de France.

Meanwhile, visitors to Noumea are being directed more and more inland and onto off-shore islands. At He Ouen, bungalows offer 10 rooms and on the Isle of Pines a new 40-room block is now available to take summer guests.

Badly hit' over

nickel quotas

Despite efforts of the French Administration in Noumea to calm uneasiness on the nickel ore export issue, the independent Caledonian mine operators in November voiced further concern as they now prepare to dismiss more men and abandon their expensive mining equipment to idleness.

Paris had recently announced that it would increase the export quota imposed on Caledonian nickel ore shipped to Japan, from 3.8 million to 4.3 million tons (see PIM, Nov., p. 103). But miners still are very unhappy at the quota, imposed suddenly well into the financial year.

As the year’s 4.3 million ton export quota begins to be exhausted, mine operators are finding they are without work, with no more nickel ore able to be exported before the new Japanese financial year beginning next April.

Leading Caledonian miner, Edouard Pentecost, who has invested SUSB.S million, only to see his projected 1.5 million ton exports reduced to a quota of 853,000 tons, flew off for talks with his creditors in Tokyo, in November.

In Noumea, another “petit mineur”, Jean-Claude Berton, held a Press

conference on November 9 at the Chamber of Commerce to air his predicament. In a written statement, he pointed out that his enterprise, built up to produce 400,000 tons of nickel ore annually, was now sub jected to a quota of 50,000 tons.

This quota had been exhausted in October, leaving him with 100 em ployees and 25 contractors, but not allowed to export another gram of nickel before April, 1971.

This, he charged, meant “strangu lation”, with Paris bureaux “wanting to favour the companies from outside and eliminate the Caledonians . . .

This is the instauration by Paris technocrats of a new colonial era”.

Mr. Berton urged the creation of smelting companies with a majority share holding by Caledonians, bor rowing from Japan and including the participation of the territory.

“The Japanese have confidence in the Caledonians and are ready to give all their technical and financial aid for the installation of processing factories,” he declared.

Mr. Berton’s statement closed with, “It is high time that the gov ernment stopped playing around and allowed the Caledonians to work the heritage of their own land, instead of directing it to be exploited by in terests foreign to the territory”.

As other miners began to voice similar complaints, a closed meeting was held on November 12 between Territorial Assembly members and 14 nickel ore exporters, including the Societe Le Nickel.

After this meeting, Mr. Michel Pentecost gave the Press a statement he had just presented to the French Administration, outlining the situ ation of his father’s enterprise.

Pointing out that the Administra tion had been advised of the Pente cost expansion programme by Sep tember, 1969, the statement declared that the present situation would oblige the dismissal of 350 employees (about 70 per cent, of the total enter prise) as well as trucking contrac tors.

The restriction on exports also meant a loss of over SAS million in export income and of over $500,000 potential tax to the territory.

Among other repercussions of these restrictions, the Pentecost statement warned of the effect on Japanese buyers: “The largest Japanese smelter is taking steps to no longer have recourse to supplies from New Caledonia, of either mineral or metal, and other companies will follow.”

The miners then claimed that the Paris action would provoke the building of factories in other Pacific countries, which would make the sale

of Caledonian nickel even more diffi cult.

They urged that there should be no limitation on nickel ore exports until the proposed new factories are built and begin production on the island. This is not possible until after 1973.

Mr. Rene de Rouvray, President of the Caledonian Ore Producers’ and Exporters’ Union, stated quick action was needed to reassure Japanese buyers.

Finally, following this year’s 4.3 million ton quota, it is now believed that Paris will not allow the territory to export more than 4.5 million tons to Japan next year.

Noumea land

prices soar

Overseas visitors to Noumea will be sorry to hear that plans for a golf course to be built outside town at Dumbea seem to have been driven into another bunker.

A preliminary study of the course had been received from world-famed American designer, Robert Trent Jones, but certain obstacles have now become apparent. The terrain avail able does not seem to quite coincide with the plans, and, under the present acute housing shortage, certain public persons have been thinking that the property concerned, having been bought by the territory, would be ideal for housing development.

With the financial scare following French franc devaluation in August, 1969, coupled with the sudden speed ing up of business activity in Noumea and the lack of a local stock ex change, there has been a crazy rush to invest in land.

Noumea is actually built on a narrow peninsula, part of it already gained from the sea. The shortage of suitable land has prompted ex tensive reclamation of marshland in recent times. And now, as home dwellers move inland around Mt.

Dore and Dumbea, the planning authorities are speaking of Noumea II and Noumea 111.

Unbelievable as it may have seemed even two years ago, the city’s population is expected by 1984 to have doubled to 100,000 —the current population of the whole territory.

The hasty buying-up of land has brought some absurd inflation in land prices. Even simple quarter-acre blocks three miles from the city centre and facing dirt roads, are fetching around 1,800,000 CFP (SA 16,000), which is nine times the price they were sold for 10 years ago.

Faced with such high prices, young

people and those on lower incomes are looking more and more to the State to help finance suitable low cost housing. Hence the interested eyes being cast upon the site for the Dumbea golf-course-cum-country club.

Lauries continue

to firm

The recent firming trend in the laurics market has continued, with prices for shipment during November quoted at SUS 236 cif UK/Continent on November 13, Mr. K. G. Oliver, general manager of the P-NG Copra

Marketing Board, said in Port Moresby on November 20.

He said this was an increase of SUSI 4 since the end of October, no doubt due in part to the recent spate of typhoons which had caused con siderable damage to copra palms in the Philippines. The latest of the typhoons, reported only on November 19, would doubtless encourage the continuation of firm prices on world markets.

Active conditions had been reported from all sections of the oilseeds and oils markets with prices advancing sharply on good demand for sunflower seed and oils and spreading to soy bean oils.

Talks on Fiji's

sugar future

In late November, Fiji was awaiting the outcome of a Fiji delegation’s visit to Sydney to discuss the dominion’s sugar future.

The delegation, headed by the Minister for Natural Resources, Mr.

Doug Brown, was due to meet with the Colonial Sugar Refining Co. Ltd. during the last week in November.

The decision to seek the talks was made by the parliamentary select committee which is examining the

sugar-milling industry in Fiji. Mr.

Brown is chairman of the committee.

Other members of the Sydney delegation were Fiji’s Minister for Commerce, Industry, and Co operatives, Mr. Vijay R. Singh, Mr.

R. D. Patel, Mr. K. C. Ramrakha and Ratu William Toganivalu, all members of the House of Represen tatives.

Also making the trip was to be the Secretary for Natural Resources, Mr. Robert Strick.

In earlier statements, Mr. Brown has said the CSR has made a pro posal for the financial terms of the

takeover and the Fiji Government would make a counter-proposal.

The assets of South Pacific Sugar Mills Ltd., CSR’s Fiji subsidiary, arc valued by the company at about $35 million.

Fiji importers

critical of NZ

Fiji importers are continuing to get pretty hot under the collar about lack of delivery and rising freight costs from New Zealand.

In recent weeks, Fiji’s Minister for Commerce and Industry, Mr. Vijay Singh, has pointed out that there is so much dissatisfaction over de livery arrangements from NZ that there are moves by some Fiji mer chants to look elsewhere for com modities.

He was concerned, too, about pro posed higher freight rates. Rates had gone up by one-third in the past 18 months, and it was now proposed they should be increased from $20.20 a ton to $23.70. Freight rate for general cargo from Britain to Fiji, he said, was only $30.30 a ton.

The NZ increases are proposed for general cargo and will inevitably cause spiralling food costs in Fiji.

Mr. Singh said he was aware that in recent months, importers had great difficulty in getting their cargo de livered in Fiji on time because of shortage of shipping space from NZ.

“From this I assume the ships were carrying the maximum cargo possible and therefore could not attribute the rise in freight rates to lack of cargo,” he said.

NZ’s waterfront disputes had further aggravated the situation, with cargo being stockpiled on the wharves.

The Minister said that Fiji still looked to NZ as the natural source for many supplies needed—but there had to be a stable system of delivery, and an end to constant increases in freight charges.

Replying, the NZ Trade Commis sioner in the Pacific, Mr. G.

McLaren, said the rates were the same as freight charges between Aus tralia and Fiji.

“If a New Zealand food product is the same price as a similar pro duct from Australia, both should land in Fiji at the same cost,” he declared.

He added that the backlog of cargoes had been largely overcome.

Two “rather bulky items” would be cleared during December and the situation would be up to date.

British Petroleum

in P NG

The giant fuel supplier British Petroleum is setting up shop in Papua-New Guinea in December — right in the middle of a market shared since 1946 by competitors Shell and Mobil.

BP is flat out to grab a huge slice of the Shell-Mobil market by concen trating on smiling super-service. P NG has been short of this sort of approach ever since petrol came to the territory.

“The New One—The Friendly One” —that’s how BP is advertising its huge bulk and retail selling . . . and motorists forced to submit for years to the common P-NG attitude “take it or leave it” are warming to the big BP signs.

BP is investing SI million in Port Moresby alone to meet the burgeon ing market. The facts: in 1968-69 P-NG imported 13,500,000 gallons of motor fuel, representing at least $5 million retail; more than 30,000 vehicles are registered in P-NG, and new car sales in 1968-69 rose 28 per cent., and this year it will be 25-30 per cent.

Burns Philp (New Guinea) Limited is not altogether happy about BP . . . because Burns Philp for years has been the only “BP” in P-NG. They think there could be confusion over the name.

New Hebrides v

Norfolk os a haven

There is an attitude growing on Norfolk Island that the island will lose its popularity as a tax-free busi ness haven to the New Hebrides.

Vila-based investors, encouraged by the British Administration in the New Hebrides (which is a British-French condominium) are selling the con dominium as a more secure place for company registration than Norfolk Island. They point out that the Commonwealth Government is al ready making signs of moving against tax-free company concessions on Norfolk, which is an Australian terri tory. And now even the Norfolk Island Council wants to put up the costs to businessmen—by increasing company registration fees to Sioo annually. There are more than 1,000 foreign companies registered on Norfolk.

The matter of increasing the fees was discussed on November 10, but put over because nobody was sure

what the position was if councillors declared their pecuniary interest in companies registered on the island, and by so doing left the council without a quorum to decide the issue.

Expert advice is to be obtained.

At the same council meeting the chairman’s casting vote was given against the establishment of Solar International on Norfolk Island. The company wants to build a plant to produce optical lenses, but members felt it was not in Norfolk’s best interests, and would give employment to only a few.

In November it was announced that the ANZ Banking Group has acquired a substantial interest in the

Melanesia Trust Company Ltd., a company registered in Vila, and has offered shareholdings to a number of major international banks and invest ment companies.

Mr. H. McE. Scambler, managing director of ANZ Banking Group, said the service of a trust company in the New Hebrides would “facilitate the introduction of oversea funds for the development of Australia and should assist in attracting funds for the general development of the Pacific Islands and Asian areas”, Meanwhile, no doubt, the New Hebrides will continue to make up the leeway in its own drive for in vestment.

Emperor board

forced ouf

The Emperor Gold Mining Co.

Ltd. has rarely had it easy in Fiji, and there are further difficulties ahead—for the parent company, Emperor Mines Ltd., which is in corporated in Melbourne. Several times Emperor has had to receive a subsidy from the Fiji Government to help it pay its way.

The last assistance period was from April 1, 1967, to June 30, 1970, and in the latest financial year, to June 30, there was a group loss of $47,988.

Now a group of dissatisfied share holders, from Australia and New Zealand, have forced the resignation of the present board and replaced it with men of their own choosing.

They say they made their move because of Emperor’s unsatisfactory performance over recent years and because of the alleged failure of the directors to implement any measures that may have offered some hope of a better return for shareholders.

The dissidents at the annual meet ing won their point when the old board resigned because it did not have the numbers.

The new board left for Fiji on November 30 to look over the com pany’s major asset, the Emperor gold mine at Vatukoula. The board com prises Messrs. G. E. R. Myers, chair man, company director of Auck land; D. R. Hoult, of Sydney, former finance journalist and chairman of two mining companies (Tasman Minerals NL and Ausminco Securities Ltd.); P. D. O’Sullivan, Perth (manag ing director of Tasman Minerals and Ausminco); J. B. Spencer, of Auck land, company director; P. A.

Browne, of Sydney, lawyer and director of Ausminco; and J. L. Reid, of Auckland, a stockbroker.

Those who resigned were Messrs.

J. F. Wren (chairman), N. B.

Theodore, N. Nilsen, C. W. Cayzer, C. Wallace Smith, D. M. N. Mc- Farlane and Dr. R. G. McElroy.

Ironically, Mr. Nilsen, who is also chief executive officer of Emperor, on November 26 was awarded Australia’s highest mining honour, the Aus tralasian Institute of Mining and Metallurgy medal for 1970. • The Indonesian Government owned Pertamina Oil Corporation on October 24 signed a production sharing contract with the American Whitestone-Indonesia Inc. for an oil search in a wide area of the Bomberai district of West Irian. Whitestone is obliged to invest $U510,150,000 within eight years of operation.

conn rn fn ror bepuruic

Pur „- L. • Cii J

nOTe issue , .

Despite the fears of many expatriate businessmen, there was a strong case for the introduction of a separate note issue to Papua-New Guinea, Professor Heinz Arndt, Professor of Economics at the Australian National University, said m Sydney in November.

He told a meeting of the NSW Branch of the Economic Society of Australia and New Zealand that separate notes should be issued before home rule, if only to prove to

businessmen that establishment of a separate currency was no cause for alarm. Those businessmen who be- Heved that they wouldn’t be able to repatriate their money, and pulled it out 0 f t be territory prematurely, “would have to crawl back again, and that would be a good lesson”, Professor Arndt said.

He added that although no changes j n territory financial institutions were a j. p re sent necessary, there was urgent need to plan ahead. Private banks which now served almost entirely expatriate business, had to consider their future role, and the Reserve Bank should be planned as an embryo central bank.