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Virgin Coconut Oil Production

April 2021

The Banaban (Rabi Island) Case Study

Terakano Takesau the founder of Banaban VCO Factory says they turned what many saw as a disadvantage to a winning marketing strategy for their range of products produced by the Banaban Women’s Association IMAGE: Fijian Government

Fiji currently imports around 17,000 tonnes of vegetable oil with a landed value of 20 million.

The Manager of the Pacific Island Farmers Organisation Network, Lavinia Kaumaitotoya says if Fiji Virgin Coconut Oil (VCO) consumption reached 5% of total vegetable oil imports, this would represent a market of nearly 1,000 tonnes which is more than the total coconut oil exported in 2016.

“We’ve studied the Banaban VCO value chain in Rabi Island – off Vanua Levu in Fiji, and it was particularly interesting because it can be duplicated in similar communities in the Pacific and unlike other models, it has been successful despite its remoteness and has managed to tap and present itself in the niche market for VCO.”

“Unlike RBD the scale of investment required for VCO is considerably smaller and classified as either medium, small or even micro for village scale. Coupled with the significantly higher price that has been received for VCO, has made it feasible for Pacific Island countries producers despite the substantially greater labour input requirements.”

While high prices encouraged governments, NGOs and donors to promote village based VCO enterprises, there was also a growing expectation that markets would be readily available.

“There was a misconception that VCO could be readily “pushed” through the value chain, rather than being “pulled” through the value chain by larger processing exporting companies, such as Wainiyaku Estate on Taveuni who were connected to the market.”

“A major challenge for micro or village scale producers has been to achieve consistently high-quality oil that meets international standards. In the case of Fiji, the challenge for micro village based VCO producers has been the consistent achievement of a final moisture content of 0.1% that is necessary to prolong shelf life.”

“Even if quality standards are met, small producers have faced additional challenges with issues of production and not being able to meet market target needs, the sustainability of cash holding and finding the correct markets to sell small scale VCO at a price that covers their cost output has become increasingly difficult to remain viable.”

Lavinia Kaumaitotoya said strong leadership will enable small scale or village based VCO ventures to succeed.

“Many charitable and philanthropic efforts combined with volunteerism are strong characteristics that successful models portray as seen with the Banaban VCO.”

Banaban Virgin Coconut Oil Factory

Meet Terakano Takesau, the founder of the Banaban VCO Factory.

“I saw the need to have a community project that would be able to employ women in Rabi to generate income and make a profit that’s sustainable enough to fund other projects for our women group sectors.”

Initiated in 2010, the Banaban VCO Factory is the project arm of the Banaban Women’s Association that has an active membership from 18 sectors and with a subscription of approximately 300 women from around Rabi.

“It took many meetings, door knocking and critical meetings with the community, with the local Government representatives and with the Cakaudrove Provincial Council to get the attention of the Government to obtain the necessary assistance to get the project going.”

“In 2013, I participated in the ‘The Whole Nuts” a 3 month extensive training course at the Ministry of Agriculture’s  Mua Coconut Centre on Taveuni and I learned everything about the coconut tree and graduated with a cold press machine and an electronic coconut scraper.”

“While I was attending this course, I was also lobbying the Cakaudrove Provincial Council to sought the approval of the Commissioner Northern’s assistance to fund the Banaban VCO Factory facility set up.”

Sheer persistence would pay off and more for Terakano Takesau.

“Government through its “Look North Project” provided funding for the Banaban VCO Factory.”

“The Rabi Council also invested the amount of $13,000 for seed capital to pay for its operational expenses and the Queensland based Nature Fiji Pty stepped in to further assist with $20,000 worth of VCO equipment to equip the factory for the initial start-up.”

Banaban Virgin Coconut Oil began processing and officially began operating as a business in 2014.

“From the start we secured the markets from the luxury resorts like Namale and the Cousteau Resort near Savusavu, the local shopping chains for Dayaram and Changalal Limited and directly to domestic customers via Roadshows that really kicked off our sales.”

“Tourism is down but we continue to make our sales at cafés, market retailers and shopping outlets.”

Key Lessons Learnt

Terakano Takesau said the Banaban VCO Factory turned what many saw as a disadvantage to a winning marketing strategy.

“Overcoming our remote location and isolation was difficult but it allowed us to produce high quality VCO with regular testing done by the University of the South Pacific.”

“We also depend on the reviews of our customers who keep the quality of our oil consistent in addition to following a process using manual methods without any shortcuts.”

A survey conducted by Banaban VCO Factory showed sales continued to grow despite the increase in price of quality handmade VCO.

“We ran a test to increase the price of the 200ml and 500ml Banaban VCO at Roadshow in 2018 to take into account the transportation and travel expenses.”

“The price was bumped up by $3 and $5 respectively and rounded off to 200ml at $8 and 500ml at $15 but customers at the Roadshow in Labasa were acceptable to the price change and still purchased the oils because of its quality.”

“They know that VCO is manually made by hand and old-fashioned sun-dried processing, they also told us that because they knew the process it was value for money and worth it.”

Terekano Takesau said story telling has become the norm in this age of technology where climate change is a topic widely told, retold and circulated on social media.

“Our history and how we were relocated from Kiribati to Fiji’s Rabi Island is one that our customers relate to and it influences their buying decisions in making a conscious and emotional purchase that’s helping women and families in Rabi make ends meet and meeting their livelihood needs.”


NEXT: Key Lessons For Pacific Island Countries

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