Despite having won many business excellence awards over its nearly 15 years of operation, Kokonut Pacific Solomon Islands’ greatest reward comes from being able to return more than half of its revenue to farmers and create sustainable livelihoods – that’s what this business is all about. And it’s set to multiply those socio-economic benefits with a new export marketing strategy.
KPSI provides opportunities for rural families to generate income from their abundant coconut stocks and depends on a growing network of more than 50 village producers of virgin coconut oil. According to its books, over 60 percent of KPSI’s coconut oil revenue goes back to the villages, providing an income to some 2,000 people.
KPSI Managing Director Bob Pollard says, “We’re not just about producing good quality coconut oil and coconut soap, but about putting money into rural communities. Our products, our oil, is produced in the village and so the business enables people to stay in the village to earn good incomes.
“This money is being invested by families into kindergarten, schools, clinics and churches”, says Bob. “We’re giving them income and dignity. That, I think, is the unique feature of Kokonut Pacific.”
A strong seller in the domestic market, KPSI is looking to expand sales overseas through the support of Strongim Bisnis, an Australian Government initiative. The program works with local partners to imagine, design and test new ways of doing business. Recognising KPSI’s impact across the coconut supply chain, Strongim Bisnis has provided technical support to identify and analyse new opportunities for virgin coconut oil in four different markets – Fiji, Hawaii, Taiwan and South Korea.
Bob believes this fine-tuning of the business strategy will make a big difference.
But the company’s resources are limited. “As we’ve grown, we’ve realised that we have to look at markets – the whole value chain. If the product isn’t bought at the end, our whole value chain breaks down. The coconut industry has become more competitive, so working with Strongim Bisnis has also helped secure our future by making better market connections.”
Bob says this research is guiding KPSI’s thinking around exports:
“Basically, the research came back revealing that some countries, that we thought might have been easy, in fact are areas where maybe we don’t waste our time. It identified other opportunities, and has been innovative, not just giving us answers that we were looking for in a sense. If these opportunities come off, it could mean we can upscale our business much more than we had planned, so it is exciting.”
He admits that exporting virgin coconut oil from Solomon Islands has had many challenges.
“When you are competing internationally the question is about product and quality. We’ve learnt that lesson, and seen other players around the region who’ve had contracts but been unable to maintain quality and [subsequently] lost them. So, we are acutely aware that quality is paramount in the international trade.
“There are challenges around quantity, people want to have contracts with a certainty of supply. That’s a real challenge that we face when working with rural communities.
“Also, international standards are not easy to secure and maintain, and they are expensive. Getting your product in front of buyers is part of the marketing challenge too. On top of that, there are logistical challenges. There is still no less-then-container-load (LCL) service out of here, so if we’re shipping goods, we are using air freight or paying for a full container. A container load of soap is a lot of soap for a new buyer!”
On top of that, Bob says the business environment in Solomon Islands is not an easy environment to succeed in. Despite these barriers, he is optimistic that Solomon products have an advantage in the market.
“Solomons is part of this beautiful, ideal, unspoilt Pacific. I think our point of difference is that buying our products is putting money into rural communities, village communities, as opposed to big companies. Many people like the idea of buying a quality product and, at the same time, having that money go back to improving the quality of life in rural Pacific Islands communities.”
The long-term vision for the coconut sector is bright according to Bob. “The coconut has been the backbone of the Solomon Islands rural economy for 150 years. People talk about it as the ‘tree of life’. It’s an incredibly abundant resource which grows so well here, but we are harvesting such a small percentage of that. There is real potential to scale up.”
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