The re-opening of the mega Stop ‘N’Shop in Waigani Central, Port Moresby will be delayed by a further four to five months due to the current foreign exchange shortage.
CPL Group Chairman, Mahesh Patel, tells Loop PNG that a lot of the equipment needed such as refrigeration and bakery equipment is imported from overseas. And with the country’s forex issues, suppliers are asking for cash payment up front.
“A lot of the suppliers want cash up front, which we are able to give them a fixed timing. If the funds were available we say ‘okay here’s your 10 percent or 30 per cent deposit, start manufacturing.’ So they wont start manufacturing the equipment until we give them a deposit,” Patel said.
“So the whole process and once the refrigeration comes in, its installation, commissioning and testing. So it will be four to five months before we are able to open it.”
The mega Stop ‘N’ Shop, which is the largest store square metre wise, was considered CPL’s jewel in the crown when it opened in 2014. However, a major fire just before the XV Pacific Games in Port Moresby in 2015 shut down operations.
While the CPL Group was able to re-open its former shop within the same vicinity two months later, the shutting down of the shop had a big blow to the entity.
“The old stop and shop Waigani Central at the moment is 2, 500 metres. This things is 5000 metres, twice the size. So obviously The turn over and the rentals were good. The car park went from 200 to 600. So we were pumping through a lot more customers,” said Patel.
“So the fire was really a big blow to us. But credit to the management, that in two months we were able to revive the old store, so that kept us at bay so it minimized our losses.
“But I think going forward, with the economic downturn, and with that fire, I mean we can keep talking about it but its just sort of been a double whammy. Because the economy is depressed at the moment as well, the spending power is not there, new jobs are not being created with the slow down in the mining sector, so what I’d call in Hollywood terms is a perfect storm,” he added
Patel, who has been in the country for 34 years, says there is light at the end of the tunnel and believes the economy will stabilise.
“It’s doom and gloom maybe now but around the corner it will bounce back. So we’re getting prepared. We opened the two stores with Harbour City and Koki, so that has taken the blow a bit. But unfortunately we opened it last year, when the economy was down,” he said
“We spent a fair amount of capital expenditure on that, close to K35 million. And that store traded for partial of the year, so this year 2017 they will be trading full year, so hopefully it will be looking much nicer. If I had a time clock I want to see December 2017 because I know we’ll have a full years trading and all our efficiencies will kick in.”
Picture: Cedric Patjole