For every five containers which is imported into Solomon Islands, only one container is exported. This means that four containers are ‘empties’ and sitting idle in the port or they are loaded back on the ship with no value being gained from the unutilised container space. This represents a missed opportunity, is a waste of money and comes at a high environmental cost. This ratio will get worse during the global pandemic as major exports have been hit-hardest.
There are many barriers to Solomon Islanders being able to export their produce. The Solomon Islands agricultural economy is largely made up of small to medium growers, who are locked out of export markets due to being unable to fill or afford an export container and the associated freight and logistics costs. These already existing pressures have been compounded by the global economic impacts of the corona virus pandemic.
The Less Than a Container Load (LCL) Access to Markets project aims to revolutionise the export market by allowing local cocoa growers and consolidators to share the costs of freight and logistics. It will achieve this through the use of a digital platform where exporters can share information as well as the space and costs of shipping containers for export. The project officially launched on Friday 16 July 2021.
The pilot project is being run by local agribusiness entrepreneur James Kana of Ueniusu’unu Agribusiness Group, along with Samantha Kies-Ryan from Earth Water People and James’ sister Rose Kana. Other partners in the project include Solomon Ports Authority, Express Freight Management (EFM) and Common Code (Aust). The initiative is being funded by the Pacific Horticultural and Agricultural Market Access Plus (PHAMA Plus) through its Export Business Recovery Initiative Grant designed to help the economy recover from the impacts of COVID 19.
The Pacific Connect Journey
“From the inception of the idea through the final funding, the LCL project was given valuable advice and mentoring from many across the ICDP network…making it a truly regional effort and proving the strength of the Pacific Connect network to support emerging entrepreneurs and their business ideas”
The LCL project idea arose from the Shipping and Logistics Pacific Connect Dialogue that was held in Honiara in April 2019. This business opportunity was identified by the team, who then further developed and presented their idea at the Pacific Connect Ideas Exchange in Sydney in September 2019.
With seed funding from the International Centre for Democratic Partnerships (ICDP), who are implementing the Pacific Connect program, a clickable prototype has been created and tested by Australian technology company Common Code with LCL stakeholders. ICDP has given an additional $5,000 funding to scope and further develop the clickable prototype to discover the communication and technology solution needed for the LCL sector in the Solomon Islands. The solution suggested will be bespoke to the LCL sector in the Solomon Islands and seek to make communication between LCL stakeholders more efficient and transparent, leading to easier collaboration and greater volume of exports.
With help from the ICDP team and valuable input on the pitch and project proposal from members of the Pacific Connect network, the LCL project was able to access funding through the PHAMA Plus program in 2020. From the inception of the idea through the final funding, the LCL project was given valuable advice and mentoring from many across the ICDP network from Kenneth Katafono from Traseable Solutions in Fiji, Eranda Kotelawala from Solomon Ports in the Solomon Islands and Cameron Neill from Common Code, Julie Gibson from Hitnet and James Fraser from Minter Ellison from Australia, making it a truly regional effort and proving the strength of the Pacific Connect network to support emerging entrepreneurs and their business ideas.
James Kana is excited to start the pilot, saying “This has never been done so for us to trial this in Solomon Islands and leading the team to solve problems for them is something that is really exciting…this initiative will be a game changer.”
James also noted that, “ICDP supported us from the very beginning. They supported us from the 2019 dialogue where this first started through the ideation process, for the pitching to investors and ICDP stakeholders by a group of entrepreneurs and professionals as part of the Ideas Exchange in Sydney, they came back with a positive response to provide funding. The ICDP provided funding that was able to be leveraged to access more funding through Phama Plus. So ICDP started the whole process. They bring in their wealth of experience but also leveraging the project from their side of things and also linking up with Australian Department of Foreign Affairs and others who put in to support the whole initiative.”
Thinking back to the start of the initiative in 2019, James says, “Back then I went in as an entrepreneur and I was really excited to address these challenges that related to my business. What I got from that was a lot more people that had all different kinds of capacity to address the problem. It’s not only looking at the physical but how to use technology to address that problem of agribusiness to access export markets.”
Asked what his advice would be for other emerging entrepreneurs coming up through the network, James says, “For us looking back two years ago to have the energy and the passion to drive and make it happen that long it needs perseverance, it needs commitment. It needs dedication despite the challenges. Just keep moving. Opportunities come. Never give up. Talk with the right people. These are the key ingredients to make a good initiative happen in the Pacific. Doing business in the Pacific is very challenging. Get yourself prepared for what you really want to do. Identify your key business idea, refine it well given time. With passion, keep driving. Above all, have hope. It will come. It will get interest, gain traction and ultimately get the support your business deserves.”
The Impact
The LCL initiative offers a long-term viable option for small medium exporters of high value commodities to access export markets. The LCL aims to provide businesses from the Solomon Islands with a freight service that can accept smaller consignments on a cost-effective basis, not requiring a full container load and not imposing costs for container space not used. Significant impacts in the sector include:
- smallholder growers and consolidators will be able to have access to otherwise inaccessible export markets
- reduced costs for smallholder growers and consolidators through using an integrated LCL system and storage facility
- freight costs of exports will be proportionate to the volumes being traded
- accessible, transparent and user-friendly e-platform
- improve incomes and livelihood across the supply chain
- enables high value commodities export
- cleaner and sustainable economic growth for the country.
The People
One of the consolidators that the LCL program is working in partnership with to access export markets is Diana Yates, the Manager of Cathliro chocolate company, and who also a long-term member of the Pacific Connect network. Diana manages a staff of 13 women and 2 men people from the cocoa plantation to the fermentation, buying and bagging process to the boutique chocolate shop they run in Honiara. They regularly buy wet cocoa beans from 5 rural communities across Guadalcanal that they prepare for domestic and export markets. Diana has been experiencing difficulties in exporting her cocoa beans and has said, “it will be interesting to see how the platform will go. It will be nice to see if this project can pick up and start to flow with the orders, etc, that will be great.”
The Potential
After being tested with local cocoa growers in Guadalcanal over the next 12 months, the pilot model has the potential to be applied in other agricultural products- such as copra, coffee, vanilla or noni. There is already interest in taking it to other countries in the Pacific- such as Papua New Guinea and Vanuatu.
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How can we build stronger business relationships between Australia and the Pacific?
Post a comment on First 5000 – Have your Say on LinkedIn today or email editor@first5000.com.au with your story.
