By Dev Nadkarni
In the years since the global financial crisis unfolded – and easy, cheap credit suddenly vanished – stories of new private sector investment have been few and far between. Businesses have been in survival mode for the most part refraining from making new investments, waiting for the first signs of the hitherto elusive turnaround.
Economies of the Pacific Island region have not been as badly affected as those in Europe partly because the Asia Pacific region has been largely insulated from the west’s financial troubles thanks to the momentum of their robust economic activity over the past few years.
But the ripple effects have been felt particularly in countries drawing sustenance mainly from remittances and revenues brought in by inbound tourism: job losses, wage cuts and a general tendency to put off non essential expenditure by people in the main tourist source markets has caused some decline in inbound tourist numbers and onshore expenditure.
It is therefore refreshing to see a private enterprise in the Pacific Island region building its business growth strategy leveraging on the recession. John Woods, owner, publisher and editor of the Rarotonga based Cook Islands News saw an opportunity in expanding his business precisely because of the recession.
If it weren’t for the global recession, he would never have been able to expand his media enterprise with a fairly substantial investment in new machinery and equipment in one of the South Pacific’s most popular holiday destinations.
Like all industries ancillary to manufacturing, the printing industry also felt the ravages of the global financial crisis. As manufacturers round the world pulled back on production levels, the demand for print products and services including promotional and packaging material dropped. This was bad news for overleveraged suppliers in the print and packaging industry. With the result, the printing and packaging industry was awash with thousands of sophisticated printing and finishing machines at unbelievably low prices.
This is where Woods saw the opportunity – especially in relation to the situation in the tiny Cook Islands market.
Rarotonga, the Cook Islands’ capital and its most populated island has just over 10,000 residents. An additional 7000 tourists and visitors at any given time keep its economy ticking. Like in most island destinations in the South Pacific the costs of goods and services are high because of their geographical distances. Rarotonga’s businesses have to send out a considerable amount of their print and packaging requirement to facilities in New Zealand adding considerably to costs.
Highly capital intensive printing facilities were too expensive to invest in because of the small size of the market so far. But the global financial crisis changed all that. Woods was able to pick up a reasonably recent model of a four colour unit Heidelberg printing press from a used printing machinery warehouse in Auckland for about 15 percent of the price of a new one, he says.
Having acquired the machine, he flew in engineers from Heidelberg to refurbish and assemble the machinery in his Rarotonga facility. Besides printing the daily Cook Islands News, the press is beginning to prove a cost saver to a number of high quality print product users, who so far had no alternative but to get their runs printed in New Zealand and then shipped or air lifted to the Cook Islands, adding considerably to costs.
Woods’ press is on par with printing technology in New Zealand and uses the latest in prepress and offset printing technology. He also runs a digital printing set up for smaller runs and banner printing for signage and advertising, adding another set of services for the island’s small display, advertising and signage industry.
As well as running a live wire newsroom for the Cook Islands News with the latest buzz from the island, the region and the world, Woods has refurbished the paper’s website and is looking at a re-launch with several e-commerce options in the next couple of months.
Business plans for this foray into digital media are based on the fact that more than 100,000 Cook Islanders live and work overseas – mainly in New Zealand, Australia and the United States besides other countries. The biggest offshore population being in New Zealand, an Auckland print edition of the Cook Islands News is on the cards, too, Woods says.
Raro – the next movie destination?
Fiji-born New Zealand accountant and actor Anand Naidu – whose first film ‘Curry Munchers’ made waves in New Zealand, Australia and is now set to release in the United Kingdom (albeit under a different title, ‘Vindaloo Wars’) and who is now based in Rarotonga – is contemplating setting his next production in the Cook Islands. Not that the destination is new to the international audio visual industry: the popular ‘Survivor’ series was shot in Aitutaki some time back.
Naidu is now financial controller of one of Rarotonga’s biggest resorts – Edgewater – and is contemplating a reality television series and a possible film with collaborators from New Zealand and India.
‘Curry Munchers’ themed on the migrant experience in New Zealand did not do as well as he had expected it to in his native Fiji, says Naidu. He is encouraged by its relative success in New Zealand and Australia and its impending release in the UK and India.
Gearing up for the forum
New Zealand Minister of Foreign Affairs and Trade visited Rarotonga and Aitutaki last month accompanied by senior officials and Cook Islands based diplomatic staff on a recce ahead of this year’s annual Pacific Islands Forum summit. The forum will be held in the last week of August.
Cook Islands does not seem to have a single venue to host an event the size of the forum, given the ever burgeoning numbers of attendees from far flung nations thanks to the exponentially increasing interest in the region for both strategic geopolitical and natural resources reasons.
The Edgewater is likely to be one of the main venues both for stay and work. The leaders’ retreat will be held on the picturesque Aitutaki, a half hour’s flight away. Interest in this year’s forum is sky high. More than a hundred rooms have already been booked between the Chinese and Americans alone – another pointer to the ongoing race of the superpowers in the resource rich Pacific Islands region.
First appeared in Islands Business March 2012