Tak­ing PNG pro­duce to the world

Made in PNG - - CONTENTS -

Pa­pua New Guinea’s non-min­eral com­modi­ties and pro­cessed goods are ex­ported all over the world.

Pa­pua New Guinea’s non-min­eral com­modi­ties and pro­cessed goods are ex­ported all over the world.

While Pa­pua New Guinea is best known as an ex­porter of min­eral re­sources—cop­per, gold, sil­ver, nickel and (start­ing in 2014) liq­ue­fied nat­u­ral gas—it is also one of the re­gion’s ma­jor ex­porters of agri­cul­tural com­modi­ties, tim­ber and fish.

Its main agri­cul­tural ex­ports in­clude palm oil, cof­fee, co­coa, co­pra, rub­ber, spices and tea.

Palm oil leads the way

The sus­tain­able pro­duc­tion meth­ods em­ployed of PNG’s palm oil sec­tor have led to ma­jor ex­ports to the Euro­pean Union— around half a mil­lion tonnes of oil an­nu­ally, mak­ing palm PNG’s num­ber one agri­cul­tural ex­port. In­deed, New Bri­tain Palm Oil Lim­ited, the coun­try’s largest ex­porter, even has its own pro­cess­ing plant in Liverpool, Eng­land to han­dle the steady de­mand ef­fi­ciently.

The EU is also a vi­tal mar­ket for PNG cof­fee and tuna.

While there is a grow­ing de­mand for sin­gle-ori­gin PNG cof­fee beans from the world’s cof­fee roast­ers, much of PNG’s cof­fee crop is sold in bulk to Europe’s three cof­fee gi­ants: Ecom, Vol­cafe and Neu­mann Kaf­fee. PNG Cof­fee is also ex­ported to the United States, Aus­tralia and Ja­pan.

Ma­jor source of tuna

Mean­while, roughly 10% of the world’s tuna catch is caught in PNG wa­ters and the bulk of this is ex­ported.

PNG’s tuna in­dus­try has spe­cial tar­iff-free ac­cess to the EU’s 500 mil­lion pop­u­la­tion through a spe­cial Eco­nomic Part­ner­ship Agree­ment—an ar­range­ment that has helped to build a healthy fish­pro­cess­ing in­dus­try in the Mo­mase re­gion on the north coast of PNG’s main­land. PNG’s tuna pro­ces­sors have the nat­u­ral ad­van­tage of be­ing very close to the Pa­cific’s tuna grounds, al­low­ing for a shorter time be­tween the catch and its ac­tual pro­cess­ing.

PNG’s tim­ber is mostly ex­ported as raw logs, although some pro­cessed prod­ucts such as sawn tim­ber, ve­neer sheets, ply­wood and even fur­ni­ture—pro­duced, for in­stance, by com­pa­nies such as PNG For­est Prod­ucts and Cloudy Bay Sus­tain­able Forestry—are also ex­ported.

About 80% of tim­ber ex­ports go to China, Korea and Ja­pan.

Man­u­fac­tured ex­ports

Due to the rel­a­tively high cost of do­ing business in Pa­pua New Guinea, and its lack of scale com­pared to neigh­bour­ing Asia and Aus­tralia, ex­port­ing man­u­fac­tured goods have proved more prob­lem­atic.

PNG’s man­u­fac­tur­ers have there­fore con­cen­trated on niche op­por­tu­ni­ties in neigh­bour­ing mar­kets.

‘If you look at our neigh­bour­ing mar­kets, they’re ei­ther smaller or ex­tremely com­pet­i­tive or both,’ says Stan Joyce, Gen­eral Man­ager S P Brew­ery, which ex­ports its pop­u­lar S P Lager to north­ern Aus­tralia. ‘Aus­tralia is a very, very tightly-held mar­ket. Through our par­ent com­pany, we’re in the Solomon Is­lands, so that re­ally leaves Fiji and then that’s about it.’

Michael Kingston, Gen­eral Man­ager of in­dus­trial and do­mes­tic sup­plies man­u­fac­turer K K Kingston, says ex­port is a small but sig­nif­i­cant part of its business.

‘We cur­rently ex­port to South Pa­cific is­lands, pre­dom­i­nantly Solomon Is­lands and Van­u­atu. We ex­port con­sumer re­tail prod­ucts and com­mer­cial chem­i­cals.’

Par­adise Foods and Lae Bis­cuit Com­pany are two other ex­port­ing man­u­fac­tur­ers, sell­ing a wide range of bis­cuits and snacks across the Pa­cific is­lands, while PNG Tai­heyo Ce­ment ex­ports to the neigh­bour­ing Solomon Is­lands, Van­u­atu and Mi­crone­sia. Mean­while, fish can­ners such as Fra­belle are ex­port­ing the by-prod­ucts of their pro­cess­ing as stock­feed and chick­en­feed.

‘Roughly 10% of the world’s tuna catch is caught in PNG wa­ters’

Com­pet­i­tive edge

Kingston iden­ti­fies a key is­sue for PNG com­pa­nies look­ing to ex­port their goods.

‘It is still hard to com­pete. We have not seen any ben­e­fit from any of the re­cently touted free trade agree­ments,’ he says.

For some food man­u­fac­tur­ing in­dus­tries, quar­an­tine reg­u­la­tions and international pric­ing ar­range­ments pro­vide tough en­try re­quire­ments into other mar­kets.

Ris­ing to the chal­lenge

Nev­er­the­less, some man­u­fac­tur­ers are ris­ing to the chal­lenge, on the back of new in­vest­ment in higher-qual­ity man­u­fac­tur­ing equip­ment and more ef­fi­cient pro­cesses.

A ma­jor up­grade of the Lae man­u­fac­tur­ing fa­cil­i­ties of Prima Small­go­ods will en­able it to pro­duce ex­port-qual­ity pro­cessed meats (see page 14), while Paul Robin­son, Na­tional Op­er­a­tions Man­ager for Laga In­dus­tries, says the ice cream man­u­fac­turer is look­ing at ex­port­ing within three years, once it has achieved ISO (International Stan­dards As­so­ci­a­tion) ac­cred­i­ta­tion.

Chicken pro­ducer Tablebirds is also plan­ning to ex­port, ac­cord­ing to Cor­po­rate Af­fairs and Re­search Man­ager Dr Keith Gal­gal. By early 2014, Tablebirds will have in­stalled a com­pletely new spi­ral freezer, new cool­ers, pro­cess­ing lines and a con­trol sys­tem, thus bring­ing its fa­cil­i­ties up to ex­port stan­dard.

PNG’s tuna in­dus­try has spe­cial tar­iff-free ac­cess to the EU’s 500 mil­lion pop­u­la­tion through a spe­cial Eco­nomic Part­ner­ship Agree­ment.

S P Lager is ex­ported to

Aus­tralia and Fiji.

Laga In­dus­tries is look­ing to ex­port PNG-made ice cream in the next three years.

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