industry?

Business

Kava the next boom industry?

International interest in the Pacific drink is growing and enterprising business people are beginning to cash in

By Patrick Decloitre

Kava is becoming the focus of inter est from a growing number of pharma ceutical companies from Germany, the United States, Japan and France, as they study the medicinal values of the plant which is a common drink throughout the region.

In February, a German pharmaceuti cal company, Schwabe, said it would buy 100 tonnes of dried kava from pro ducers in the South Pacific to manufac ture an anti-stress pill that is to be mar keted in South East Asia.

Eckhart Muller, a Schwabe official, said the quantities (the equivalent of some 600 tonnes of green kava), would be bought from South Pacific kava pro ducers: Fiji, Tonga, Western Samoa and Vanuatu.

The possibility of creating joint ven tures in the kava-producing countries, especially in Fiji, was also mentioned.

They intend to make the anti-stress pill after three years of research, Schwabe said. The company intends to sell the pill in Malaysia, South Korea, and Indonesia. It will be marketed to treat such complaints as anxiety and

hypertension.

But one of Vanuatu’s main kava dis tributors, Charles Long Wah, says the problem locally is not to export but to be able to face the demand from the domestic market.

He estimates the Vanuatu market (mainly kava bars of the capital, Port Vila, and the northern town of Luganville) consumes 4000 tonnes of green kava annually. “Since 1985, this represents a local market of about 100 million vatu (about US$900,000) and

this could grow in the coming years at a rate of seven percent per year,” he says.

This is clearly a reversal in trend com pared to the pre-independence situa tion, where missionaries had labelled the beverage the “devil’s drink”.

“In Port Vila, on Erromango, on Futuna, Anatom, Malekula, the mission aries had told the islanders to destroy kava plants. And so they did.

“But at present, at this pace and given the present situation, we are facing the risk of a kava shortage for the Vanuatu market by the end of this year and for the next three to four years,” he said.

“We should start to increase the pro duction effort now to provide for this increasing local demand, let alone the export markets,” says Long Wah.

The problem is that kava is not grown in the most productive way.

“People are replanting smaller and smaller sticks (from the plant) and the roots are therefore smaller, too. On the islands ofTongoa, Epi and Tanna, there is hardly any kava left. I have started negotiating with overseas donors who are ready to finance an intensive replanting scheme. But even if this eventuates, it will take at least five years before the first harvest is ready.

“But this is a very profitable business which yields nearly 14 million vatu (U 55125,000) per hectare. The idea would be to build a processing factory in a main production centre (an island like Pentecost) to enable the produc tion of an exportable finished prod uct,” he says.

The island of Tanna was producing some 20 to 40 million vatu (US$lBO,OOO to US$300,000) worth of

kava each year but this production has now decreased to less than 10 million vatu (US$9O,OOO).

“The consumption is even bigger on Tanna than what they can produce. The only island left to produce in large quantities is Pentecost. That’s why we heard recently that producers in Malekula and Santo (north Vanuatu) have increased their prices by 300 per cent because there is a shortage in the southern islands,” he points out. Long Wah said he has bought quantities worth over 200 million vatu (US$l.B million) in the past 15 years from the central Pentecost region alone .

He explains this by a “too big con sumption” of the anaesthetic beverage in Port Vila and Santo. “And I have so far never exported any kava since I start ed,” he added.

Long Wah’s Kava Store centralises production of kava, buying at just over US$l per kilogram from the outer islands, mainly from northern Pentecost. He estimates he has 27 per cent of the market, with an average of nine to 10 tonnes bought every week, amounting to 585 tonnes annually.

Daily sales average 1.5 tonnes.

Some of his customers retail to small er kava bars which prepare the bever age every night for a wide range of cus tomers, including ni-Vanuatu and a growing number of expatriates and local residents.

The business of producing and sell ing kava provides income for some 6000 growers in the outer islands, according to Long Wah’s estimates. “On Pentecost, nearly the whole island now concentrates on kava production,” he said.

“I think kava growing is a good thing, it’s become a real source of income.

Someone in the islands who has land and grows a thousand plants of kava is nowadays a rich man and he’d better not leave his land unattended,” he said.

“This is the answer to all the Vanuatu islands, and other Pacific islands.”

Elaborating on the export potential of kava, Long Wah said products such as the anti-stress pill did not need to be manufactured overseas.

“Overall, with this growing demand, the export market could increase by 100 percent in the coming years,” Long Wah said.

To supply this demand, he thinks the best thing would be to process locally the raw material into a semi-finished

product.

He says German, American and French companies are interested in buying kava. “At the moment in Hawaii, they are starting to plant huge quanti

ties of kava and they offer a much better price (US$5O) than the Germans, The Germans only offer US$4 - 7 per kilo. The French are offering to buy three tonnes per month at US$3O per kilo,” Long Wah said.

“We are currently developing a different product here, which is the kava 'tea’. This is the real base of our exports, not the pill. At the moment, some Kava products are being manufactured in the USA or in the UK. They are sold as relaxants but they merely consist of a small proportion (less than one percent) of crushed kava root skin

mixed in a large quantity of alcohol. It is sold at US$25 in the United States, The same recipe is used in a dehydrated form to produce these 'anti-stress’ pills. We could do the same here, it’s easy,” he says.

Long Wah’s kava-tea is made from the inside of the root, which is crushed and dried. It does not have the muddy look of the locally consumed beverage. The tea is prepared the same way as conventional tea (one spoonful per kettle of hot water), looks yellow when ready to drink and retains the relaxing properties of Kava.

“With the Japanese, we could supply the kava tea I have devel oped, but at the moment this is not possible because we don’t have enough kava to supply. So the negotiations have stopped,” he said.

“Our kava is better compared to other producers in the region,”

Long Wah believes. He attributes this to the quality of the soil in Vanuatu which, he says, provides more proteins to the plant.

“Even if Fiji is currently the major exporter in the region (about US$3.5 million a year), with these new overseas demands, I doubt whether they will be able to supply the quanti ties ... I’m convinced that one day the kava market will have to be supplied by producers grouped into co-operatives on a regional level. Now the suppliers are individuals, small entities like me, but sooner or later, farmers will realise they can control the market much better. But at the moment, they are too divided. It will only come if they cultivate kava more intensively.”

Looking into further openings for kava products, Long Wah has even experimented with such products as kava chocolate (a mixture of chocolate and 17 per cent kava), sweets or nougat.

“We always have to be one step ahead in case we have sufficient producing capacities one day and the current range of prod ucts can no longer absorb the production. But I remain con vinced that the answer is tea when we start exporting because this is a good product that is unique and that stands out and the selling price is much higher,” he stresses.

“If we start launching it, we might face an even high shortage because the overseas demand will be huge and the prices

might go up. Let’s concentrate on the local market and we might talk about export when we are ready in terms of production. This is a preliminary condi tion and this cannot be done without the grass-root producers in the outer islands who have to realise what kind of wealth they potentially have. Some of them have already understood and they’re much better off now. But at the moment the message is very hard to get across to the outer islands. Most of them have not understood yet,” he con cludes. ■