World Bank's IFC collaborate with SP Brewery to transform beer production

IFC, a member of the World Bank Group, signed today a partnership agreement with SP Brewery for an innovative project to grow cassava and convert it to starch.

IFC, a member of the World Bank Group, signed a partnership agreement with SP Brewery for an innovative project to grow cassava and convert it to starch. This will be used initially as a partial substitute for imported barley in beer production. The project aims to create a new industry and boost farmers’ incomes.   

SP Brewery, a subsidiary of Heineken, has spent the past four years testing ways to produce starch locally.  After extensive tests, it settled on a limited number of cassava varieties as the best source of starch. They set up a nursery and pilot farm in Markham Valley and are now building a factory to produce the starch. 

“We’ve been brewing beer in Papua New Guinea for the last 66 years and as an operating company under Heineken, we’ve been exploring how to incorporate locally produced starch in our brewing process,” SP Brewery Managing Director, Stan Joyce said. “Although SP Brewery initially funded this project and will continue to do so, to ensure it is sustainable, we now need more support to commercialize this as a business. It has been a challenging four years but we are excited about this project. We see a real opportunity to strengthen the agriculture sector and look forward to working with IFC to ensure that Papua New Guinea benefits from this cassava project.” 

Under the agreement, IFC will be advising SP Brewery on a business strategy to achieve a sustainable supply of cassava for the starch factory, which should be in operation by the end of the year. The work, supported by the Australian and New Zealand governments through the Papua New Guinea Partnership, aims to help smallholder farmers grow the cassava, improve their farm management and access new markets, with a focus on women farmers. 

“This is about creating a new industry in Papua New Guinea which in turn will create jobs and opportunities for people in rural areas,” said IFC’s Vice President for Asia and the Pacific, Nena Stoiljkovic, at the signing ceremony in Port Moresby. “The aim is to develop a competitive starch industry attracting local and international buyers, amid growing overseas demand for starch products.” 

In Papua New Guinea, a country where about 80 percent of the population relies solely on agriculture for their food and income, the commercial cassava market is very small, grown mainly as a subsistence crop and traded in very limited volumes. 

SP Brewery first identified the potential of starch from cassava for its beer produced in Papua New Guinea back in 2014. A year later, the company signed a memorandum of understanding with the Department of Agriculture and Livestock to set up a nursery in Erap in Markham Valley and developed plans for a factory to convert cassava into starch. 

One aspect of the new partnership will be to help around 450 smallholder farmers who live near the planned SP Brewery starch plant, commercially grow the desired new cassava crops. These farmers will be provided with training to learn new skills that will help them boost productivity and better manage their farms.