New Owner For Madang Mill

Elan Trading Corporation of Australia has bought the Madang Coconut Oil Mill in Papua New Guinea to add to its other coconut mill interests in the South Pacific.

Elan bought the Madang mill for K6.4 million from Kokonas Indastri Koporesen (KIK) after the mill had been in liquidation for some months.

Interim liquidator Rex Paki said Elan Trading would operate the mill under a joint venture agreement with local growers, through Madang Commodities Ltd. Under the agreement, Elan would hold 60 percent and growers would be entitled to purchase the remaining 40 percent.

Madang Commodities was set up by the Madang Provincial Government last year to accommodate the interest of the local copra growers in Madang who wanted a share in the ownership of the mill in their province.

The growers had strongly opposed moves by KIK to sell the mill to outside interests.

It is uncertain at this stage how the growers will benefit from the 40 percent share that is available to them.

Paki said the sale involved the mill shed, office complex, the mill machinery, eight residential properties and the mill business as a going concern.

"The sale price is a very good one. It is well above offers made before the appointment of the interim liquidator, and reflects the financial position of the company through stringent cost controls and other savings," Paki said.

A significant change in the mill has been the switch to coconut oil to fuel the mill¹s boilers which saves costs while encouraging downstream processing activity.

The Madang mill was bought and shipped to Papua New Guinea from Tonga in the mid-90s by the now defunct Copra Marketing Board.

Last year, Elan Trading, led by South Australian businessman Don Fleming, secured a 25-year lease of a government-owned mill at Vaitele, near Apia in Samoa, which was commissioned in July. The company also has a copra mill at Santo in Vanuatu.