Strengthening island life through commerce

Sitting on the edge of Honiara, on a one-hectare block, is the Kokonut Pacific Solomon Islands factory.

There, a team of 30 young and vibrant Solomon Islanders support hundreds of villages across the country to produce virgin coconut oil that is either exported or turned into soap or cooking oil.

The social enterprise operates by the motto: improving village life.

“Solomon Islands is a beautiful part of the Pacific, where the past and present are still very much connected,” explains Bob Pollard, Managing Director Kokonut Pacific Solomon Islands.

“Around 70-80 per cent of the population still live in villages and these villagers lead a subsistence lifestyle. Earning cash for basic needs can be a real challenge for those living in rural village communities.”

“Over the past 30-35 years, many communities have turned to logging. We have tried to create an alternative income for people at the village level.”

“These villages are on islands, which makes transportation and communication hard. Some islands don’t even have a wharf, so people try and ship stuff by bags and canoes. Those obstacles make it very difficult for villagers to earn income and people just don’t bring products to market.”

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Village-level production

In 2004, Kokonut Pacific Solomon Islands founder Colin Dyer was looking at ways to encourage business within the Pacific nation. ANZ has been supporting the company with banking services since 2003.

He partnered with Dr Dan Etherington in Canberra, to use technology Dr Etherington had developed to enable village-level production of quality virgin coconut oil.

Initially, they intended to produce virgin coconut oil and sell it domestically. But within a few months, they realised there was so much oil, they could never sell it all locally.

“In the early days, it was about developing the technology, getting it to work and establishing markets. Twenty years later, we’re a well-known business and we’ve won a number of business awards and the Prime Minister’s Business Excellence Award,” Bob says.

“But trying to encourage village business is not always easy. We’re dependent on the world prices of virgin coconut oil. In recent years, that’s been declining but we’re still here. We are working towards being sustainable.”

Over the last 10 years, Kokonut Pacific Solomon Islands has injected on average around SBD 3 million (AUD 534,677) back into villages.

“We’re diversifying now into cocoa as well, to find a way for the business to be sustainable on a long-term footing.”

Cocoa diversficiation

Kokonut Pacific Solomon Islands works with more than 1,000 coconut farmers across the country, most of whom are subsistence, cash cropping farmers. These same farmers often have cocoa too.

“While the coconut has struggled, the cocoa industry is considered a significant crop for the Solomon Islands’ economy, in terms of the export of raw materials going to bulk markets,” says Bob.

“We recognised we could add value to the same communities by processing cocoa beans to make cocoa butter, cocoa powder and nibs and we can get a better price for our farmers and export it with our fair-trade organic certification.”

“It’s a social enterprise and we’d like it to be sustainable so we’re working on all fronts to provide employment opportunities to villagers.”

“We have a really great team of Solomon Islanders who are taking up leadership and developing the business. In that sense, the future is bright.”

Martin Beattie is ANZ Country Head for the Solomon Islands