Marketing Arrangements

Improving market accessibility for small farmers is vital to help farmers achieve better market access, price and facilitating market linkages. Farmers face a challenge to meet volume therefore to reach required production volume KIK is encouraging and mobilizing joint group of farmers.

A cluster of farmers can consolidate raw coconuts to reach the required production volume and market the finished products.

KIK work with farmer clusters in establishing supply chains and coordinating the flow of raw materials from numerous producers for large-scale processing.

Helping aggregators assist in transit storages establishment and support transportation modes whether it is trucks or ships or dinghy with an aim to ensure smooth transportation of coconut products from farms or processing facilities to access market.

Production of High Value Coconut Products (HVCP)

For improved livelihood for farmers KIK is proposing to farmers to halt black copra production and encourage, train and promote the production of high value coconut products according to quality and safe standards.

With downstream processing farmers can generate more income as a better alternative instead of only selling the traditional copra which is only made from one coconut part.

More profitability can be made from fully utilizing and selling different parts of a coconut from the leaves and shells to the kernel. Downstream processing will create more employment opportunities.

Farmers and processors will gain a higher profitability when selling the various parts of a coconut tree.

1. Virgin Coconut Oil
2. Coconut Soap Production
3. Body & Hair Care Products (Lotion, Gels & Fluids)
4. Coconut Shell Charcoal
5. Coconut Coir & Peat Products

Coconut Downstream Processing Facilities and Machinery

KIK continues to provide technical and resource support to MSMEs to improve their processing facilities, ensuring that coconut products manufactured meet the quality standards required for both domestic and international markets.

The Industry Division officers, Research Development Division and other certified technical companies work together to recommend and provide technical training on coconut processing machinery and technologies. Based on requests KIK endorses machinery for large-scale or village level manufacturing. These machines and technology increase efficiency and volume, improve quality control, value addition, economic opportunities and sustainability.

Facilities financed or alleviate fund restorations by KIK:

1. Murnas Facility
2. Alotau VCO Mill
3. Nawruz VCO Mill
4. (Note: Ask ISD or RND to provide list of all funded Mills or processing facilities by KIK)

Farmer Mobilization into Farmer Groups (Coconut Producer Organizations & MSMEs)

Since the inception of the coconut downstream processing and value addition activity in 2014, KIK has been actively establishing partnerships with micro to small businesses in the coconut industry. This initiative involves mobilizing coconut producer groups (including MSMEs, farmer groups, societies, and cooperatives) by raising awareness about value-added products and white copra production, thereby enhancing their resource capacity for active engagement in HVCPs and white copra production.

Benefits:

1. Increased total Production
2. Increased Volume
3. Improve bargaining power
4. Gain better access and sharing of resources and markets
5. Share knowledge & Expertise
6. Access to credit facilities

The emerging farmers groups and coconut HVCP producer MSMEs were mobilized by delivering awareness on the importance of coconut farming, White Copra, and HVCPs – VCO and soap production. Physical awareness meetings were conducted and establishment of copra producer and emerging MSMEs engaging in HVCPs – VCO and soap were mobilized and established.

Most of these farmer groups and MSMEs operate in a kitchen or cottage set-up and require capacity building training and resourcing to progress to the micro-level stage. Their products are currently sold at informal local markets or through personal networks of families and friends in towns and cities.

Additionally, existing MSMEs in the Momase region have leveraged their business networks and have secured potential markets in Goroka and Port Moresby. The Kumul Organics in Madang has embarked on finding market opportunities in Goroka and Port Moresby and has successfully secured an MSME stall at the Unity Mall in Port Moresby.

Kumul Organics continues to consistently engage with farmers that are VCO producers which creates market pathways for farmers in the rural Bogia district. Furthermore, the Malala Co-operative Society (MCS) was recognized with the best white copra producer award during the World Coconut Day.

KIK plans to collaborate with MCS to revive the white copra production utilizing the Awar plantation in Madang in the 4th quarter and onwards.

Coconut Quality Standards

It is a mandated role of KIK to establish accreditations of coconut products processing facilities and laboratories and develop and adopt high quality standards for the coconut industry.

In 2018, the KIK Board adopted 15 coconut standards set by the International Coconut Community (ICC) for use by coconut farmers and traders. These standards were subsequently gazette by the National Institute of Standards and Industrial Technology (NISIT) and are now formally recognized as the PNG Coconut Standards.

However, a copyright issue has arisen, and KIK is currently seeking clarification from the ICC to ensure that there are no legal implications regarding copyright and user rights.

MSME Start up Kits

The MSME Start-Up Kit program was initiated to support and enhance the capabilities of farmers, individuals, and groups involved in the downstream processing of coconut products, particularly Virgin Coconut Oil (VCO) and coconut soap. Distribution of the kits is based on a comprehensive assessment of production capacity and access to essential utilities such as electricity (main grid) and water sources, ensuring optimal production conditions.

Each kit comprises the following items:

1. 1x manual squeezer
2. 1x electric/manual scraper
3. 5x soap molds
4. 50x oil packing bottles
5. Oil storage buckets
6. Filter papers

For areas without access to main grid electricity, mini diesel generators are provided to enable the use of electric scrapers, thereby improving VCO production efficiency.

Additionally, four off-grid solar power systems have been procured from overseas to enhance the efficiency of downstream processing equipment. These solar systems will be distributed to MSMEs to boost production capacity and increase the volume of high-value coconut products (HVCPs).

During this reporting period, 12 start-up kits were procured and distributed to MSMEs engaged in VCO downstream processing.

Food Safety and Hazards Analysis & Critical Control Points (HACCP) Accreditation

The Hazard Analysis and Critical Control Points (HACCP) system, under the Codex Alimentarius, is a proactive strategy aimed at ensuring food safety. It identifies and mitigates biological, chemical, and physical hazards in production processes that could render the final product unsafe, designing measures to minimize these risks to acceptable levels.

KIK initiated the HACCP program for local MSMEs in 2015, developing a framework of guidelines and standards. This framework was designed to give MSMEs a competitive edge in the market, ensuring their products are recognized and accepted by consumers both domestically and internationally.

As a result of this program, four MSMEs have been accredited by HACCP Australia. These include:

• Weni & Mendol Investment (East Sepik Province)
• Rabaul Virgin Coconut Oil
• Tropic Frond Oil T/A Niugini Organics (East New Britain Province)
• Aroma Coconut Products Cooperatives T/A Aromantic (Central Province)

In these quarters, KIK supported Nawruz Solution Limited in Madang Province to enhance its VCO processing facility to comply with Hazard Analysis and Critical Control Point (HACCP) accreditation requirements.

The improvements, undertaken in collaboration with the National Institute of Standards and Industrial Technology (NISIT), are expected to be completed by 2025.

Labelling, Packaging, and Branding Elevated to Industry Standards

Effective labelling, packaging, and branding are critical for enhancing the appeal and marketability of coconut products. They convey vital information about nutritional and health benefits, as well as product usage, fostering consumer confidence and satisfaction.

Recognizing this importance, KIK has been actively promoting High-Value Coconut Product (HVCP) brands through trade fairs and exhibitions both locally and internationally, including a strong presence in 2023.

This reporting period, KIK delivered a comprehensive e-commerce training program in partnership with Slice Bread Social, an Australian consultancy specializing in e-marketing.

This training covered key areas:

1. Branding and Packaging: Strategies for defining a brand identity and selecting optimal packaging designs.
2. Digital Marketing: Techniques for maximizing online presence.
3. Social media and Artificial Intelligence: Tools and best practices for leveraging social platforms and AI in marketing efforts.
4. E-Commerce Management: Guidance on creating, optimizing, and managing online stores.

This initiative, supported through regional collaboration with the Pacific Community (SPC), engaged 21 micro, small, and medium enterprises (MSMEs), five KIK staff, and one SPC staff member.

Participants were awarded certificates of attendance from Slice Bread Social upon successfully completing the program.

This milestone reflects KIK’s commitment to empowering local businesses with the skills and knowledge to compete effectively in the global market.

KIK Market and Surveys Reports Compiled

Kokonas Indastri Koporesen (KIK) compiles quarterly market reports and socioeconomic research surveys to inform policy development and decision-making aimed at improving market access and opportunities for coconut entrepreneurs.

The Quarterly Market Report provides comprehensive updates on both international and domestic market trends. It includes comparative analyses of global copra prices, domestic copra production, and export performance.

The Socioeconomic Surveys offer valuable insights into industry dynamics, identifying challenges, and recommending solutions to address bottlenecks. These efforts aim to create an enabling environment that fosters the growth of Micro, Small, and Medium Enterprises (MSMEs) within the coconut value chain, enhancing their competitiveness in both domestic and export markets.

Among the planned research initiatives is the Cost of Production (COP) Survey, which assesses production costs across the spectrum of smallholder coconut farms and larger plantations.

Promotion of Coconut Products, Trade & Investment

The KIK actively promotes coconut products through various marketing platforms, including trade shows, events, digital media, social media, newspaper ads, printed materials, and televised promotions.

A major highlight was the World Coconut Day 2024, an event that showcased the value and versatility of coconut products. The celebration included exhibitions, seminars on key topics, stakeholder discussions, and promotional activities aimed at increasing consumer awareness and attracting investment.

The event provided an excellent opportunity to connect with local and international audiences, strengthening KIK’s position in the industry.

These efforts are part of KIK’s ongoing strategy to raise awareness and expand markets for coconut products. Key achievements reflecting KIK’s dedication to growing the coconut industry nationally and globally.

1. Promote coconut products through mainstream media
2. Promote through printed materials
3. Promote market activities via mainstream media/social media platforms / trade shows
4. Promote coconut products at world expo events
5. Support SMEs at International Trade Shows
6. Host “World Coconut Day” on 30th Sept – 6th Oct. 2024
7. Support Micro SME coconut products at local trade shows and expos
8. Host Coconut Day Festival 2019 and invite international coconut businesses and experts
9. Support Micro SME coconut products at local trade shows and expos

Cost of Production (Plantation, Smallholders & MSMEs)

One of the main tasks for KIK is to assess cost of production aspects for plantations, smallholders and MSMEs such as harvesting, maintenance, labor, land, seedlings and recurring costs.

Monitoring & Evaluation of Coconut Projects in each province

KIK ISD team regularly monitor and evaluate coconut projects in each province in Papua New Guinea. Purposely to advance durable span of sustainability that will precisely benefit farmers’ livelihoods.

Monitoring and Evaluation (M&E) is fundamental for accountability and data-driven decision-making to successfully manage coconut project implementation.

KIK License & Export Inspections

KIK statutory role is to ensure compliance according to mandatory quality and health inspections. As the regulatory institution authorized by the PNG government to issue licenses to exporters annually.

KIK inspectors in collaboration with NAQIA and Customs conduct tests for coconut products and examine storage facilities for coconut products before exports.