Document Sample

                              7TH - 8TH JUNE 2006

                              SUVA, FIJI ISLANDS



This presentation will be in 5 parts;

             1.     The valuation of total production 2002 – 2005
             2.     The new directives taken by the Government through the
             3.     The achievements observed in our Coconut sector
             4.     The vision for Vanuatu in the South Pacific coconut
             5.     conclusion

1/ valuation of total production 2002 to 2005

2002………...Total production. -           18 thousand metric ton
2003………...Total production. -           30 thousand metric ton
2004………...Total production. -           37 thousand metric ton

Evaluation of the financial injection in the rural area for copra production

2002………...450 million vatu (USD 3.8 million)
2003………...750 million vatu (USD 6.4 million)
2004………...925 million vatu (USD 7.8 million)
2/ New directives taken by the Government through the Vanuatu
Commodities Marketing Board or VCMB

When we look back at datas produced by the data section of the Vanuatu
Commodities Marketing Board, we can observe three problems or

          o The irregularity of the production going up and down. The
            farmers are only cooking copra when they are forced to it for
            school fees, and big events such as Christmas events and
            independence celebration. No real commitment for commercial
            production and supply

          o The fluctuation of prices due to world price fluctuations. That
            has caused discouragement of copra farmers and a direct factor
            to the low production season.

          o The over aging of trees and less production of nuts. No clear
            program in the replanting of new trees in place of the old. No
            expanding of new plantations. 80% of the trees are 40 years

The Vanuatu Commodities Marketing Board has been instructed by the
Ministry of Trade Commerce and Industry to try and take measures to
answer these issues.
Since then the VCMB has negotiated with the main power supplier of the
country which is UNELCO Vanuatu.
UNELCO is the power supplier in Vanuatu, currently using 15 to 20 million
liters of Diesel a year. It is the biggest consumer of diesel in the country. The
VCMB has managed to go into contract with them for the supply of coconut
oil. The coconut oil used is produced by a subsidiary company of VCMB the
Vanuatu Coconut Production Ltd.

The first trial began with one of the five power generators in Luganville on
We started in June 2005 to supply UNELCO (Vanuatu) 5% of the
consumption for one generator.
In a week an equivalent of 700 liters coconut oil is used. In September 2005
we moved up to 10% of the consumption which is 1400 liters a week.
In Vila the trials have started on the first of November 2005 with 5% of the
consumption of the main power generator that represents 6 000 liters of
filtered coconut oil a week.

These trials are necessary because the Generators have not been designed to
run on coconut oil. UNELCO (New Caledonia) is also the power supplier all
over New Caledonia and had installed in the Loyalty Islands American made
power generators running on 100 % coconut oil. So the idea we have in
Vanuatu is to make trials on the existing power generators until we reach
ceiling tolerance for coconut oil. And for the 5 other power stations to be
built in other provinces, UNELCO will install the similar engines that they
have installed in the loyalty islands of New Caledonia.

Currently a contract was signed in December 2005 for the whole year 2006.
The contract clearly stated the supply per month, and the fixed price across
the year.

The Ministry of Trades and Industries through dialogue with the Ministry of
Agriculture has put together a program through the research center in Santo
to oversee the replanting of coconuts in areas with over aged trees and the
prospect of the coconut timber industry. The program is seeking financial
assistance in the distribution stock of seedlings and young coconuts. The
programs will be supervised by agriculture field officers.

Current trials supply and projection in the future;

From 2005 to May 2006….Total supply to UNELCO 29.600 liters per
month…….59.20 tons of copra

May 2006 to December 2006…..56.400 liters per month……………112.80
ton of copra.
VCMB is aiming at supplying at a first stage 5% of the total consumption of
UNELCO after December 2006 ~ 2000 metric tons of copra in 2007;

In 2008 …10 % total consumption….4000 ton of copra.
In 2009….20% total consumption…..8000 ton of copra.
In 2010….30% total consumption…...12000 ton of copra.

The present purchasing price for copra the Vanuatu Coconut Product
Limited is offering now to farmers to supply oil to UNELCO is VT 30
000(USD 254.07) per metric ton. The price will remain until, December
2006 when UNELCO and VCMB will review the contract for 2007.

We are already experiencing in Santo a sensitive decrease of electricity bills
and this will happen in Port Vila as from July 2006.

On the issue of continues production at the farmers level the Vanuatu
Commodities Marketing Board is planning to enroll all the copra farmers in
the Banking system. We have the sad situation in our Country where around
150 thousands coconut farmers are not using the banking system. This has
amounted to an estimated 2 billion Vatu not circulated in the banking system
according to reports from the Reserve Bank of Vanuatu and this makes it
very hard for farmers to develop with new investments in the sector of copra
towards their farming and marketing opportunities.

By creating farmers associations and enrolling them into commercial centers
& cooperatives, they are able to open bank accounts under savings accounts.

All their sales will be then credited to their accounts. The system the
government is putting in place will allow them also to purchase shares in
their commercial and cooperatives centers. The government believes that by
giving incentives of ownership, farmers will start to manage their plantation
in a commercial manner. The program has attracted donations of two ships
by the Chinese government with the help of the government through the
Ministry of Public Utilities. These 80 ton capacity ships will be in charge of
getting goods to commercial centers and copra back to Santo. With all these
in place the final objective is to create out of the farmers savings scheme the
Agriculture Bank of Vanuatu.
3/ Achievements observed in our coconut sector

The big change we can observe today is that copra is not only exported but
gradually crushed into oil as a value added product. From that Vanuatu is
exporting coconut oil and copra meal. The total production of Coconut oil is
2100 ton a month, and the copra meal production is 1300 ton a month.
The coconut industry has managed to attract a regular monthly shipment of
Bank Line International shipping.

The copra that is exported goes to Germany for processing for the coconut

The Commitment of the Government to the coconut sector has allowed our
coconut sector to even go a step further from oil production to bio-fuel

In Port-Vila, there are two blending and bio-fuel plant;

   • The Vanuatu Sea Transit (VAST) Company.
   • The Motor Traders.

In Luganville, Santo there is one blending and bio-fuel plant;

   • Vanuatu Coconut Production Limited

The three distributors of Bio-fuel have different mixtures;

   • VAST……………70% filtered and blended coconut oil + 30% diesel.
   • Motor traders…….80% filtered and blended coconut oil + 20%
   • VCPL………….100% filtered and blended coconut oil ( Government

To promote these technologies, the Government has decided to use them as
exampleS to find their reliability to private owners. As from July the first
2006 all government vehicles running on diesel will be switch to bio-fuel.
Few months after the private sector started to get in the system of using bio-
fuel. We have private trucks running on Bio-fuel and we have few inter
islands shipping company running their vessels with Bio-fuel too.

4/Vision for Vanuatu in the South Pacific coconut sector

The Vanuatu Commodities Marketing Board is putting upfront a policy that
should get Vanuatu towards the leading force of oil industry in the Pacific
region in the near future. From exporting copra to production and export of
oil to production of 100% bio-fuel
We have the biggest crushing capacity of the South Pacific region and have
the intension to use it at the benefit also for the other small island countries.
The recently closed down COPV mill is now being negotiated for purchase
by the government. We are already importing copra from Kiribati and
Solomon Islands. Our strategic location via Australia and New Zealand is
also supporting oil from countries such as Kiribati to transit and them to use
our export facilities.

The Vanuatu Commodities Marketing Board has the intention to offer shares
to Island member countries in their subsidiary company (Vanuatu Coconut
Product Ltd) in the near future.

The Vanuatu Commodities Marketing Board has the firm opinion that
Pacific Island countries should work together to develop different sectors of
the coconut processing. Vanuatu is also convinced that the Pacific Island
Countries have to ensure that they are represented in Regional organizations
in order to benefit in the development of trading markets and newly
advanced technologies for the development of the sector.

5/ Conclusion

To conclude, I would like to stress the importance of the work that is before
Vanuatu with the establishment and production of bio-fuel. In relation to our
regional partners we look forward in working together to enhance the
processing of another level of copra to the final stages of having a regional
program on bio-fuel.

Thank you for your attention.

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