In for the long haul
Logistics company iPi is investing from its reserves to improve its future capabilities.
The iPI group is a diversified provider of logistics solutions that started operations in Papua New Guinea in the early 1980s. It was initially associated with
the Porgera gold mine, but chief executive Scott O’Reilly says it then diversified its operations through synergies, providing more services to its existing clients and geographic diversification.
“We have managed over the years to prove our worth around the country and beyond,” he says.
O’Reilly says the company has faced significantly tighter trading conditions since the end of the build phase of the PNG LNG gas project in 2014–15. “The ongoing tightness with foreign exchange causes daily issues, and this flows through to client business as well.
“The net effect is a market driven
strongly on price sensitivity. This is not always the ideal condition when innovation, efficiency, proactivity and extreme attention to quality are a focus for us.
“It is obvious that to invest back into business efficiencies requires the finance to do so, and in a very price-sensitive market that can be a challenge.
“We are taking a longer-term view by continuing to invest from our reserves so as to better our capabilities.”
O’Reilly says in a diversified business, operational challenges can vary. “It is different depending upon whether it relates to trucking, to warehousing, to catering, to property management or to hotel operation.”
The difficulties obtaining foreign exchange have become “a real cost to doing business” he acknowledges. But he believes the company has enough capital reserves to withstand the stresses. “We see the (foreign exchange problems) as a competitive barrier to entry for those who might challenge us.”
O’Reilly says he is looking for growth to come from improvements to internal efficiency, synergistic expansion and further diversification. “We will look to do what we presently do, but better; we will look to offer more services to existing clientele, and we will look to diversify, either through tender or purchases of businesses.
“I am a believer in growing from a core rather than opportunistic growth and so any moves will fit within a model of building from a stable, well resourced core rather than pursuing an operational direction that is previously unknown to us.”
O’Reilly is proud of what the company has achieved, especially its partnering with the Porgera mine in building an airstrip, the flyin-fly-out accommodation village, and supplying all the bricks for the underground tunnelling. The company has offered financial support to rugby, church groups, schools and for medical needs.
“We have created bursaries that provide ongoing educational support,” O’Reilly says. “We’ve placed females into once male-dominated areas and we’ve supported women in business.
“We’ve provided dividends, year in and out, to give a future for many thousands of our people – through trading periods that were buoyant, and through trading periods that are extremely difficult.”
We have managed over the years to prove our worth around the country and beyond.