Mixed year ahead for PNG'S manufacturers

Papua New Guinea’s manufacturers are expecting a ‘mixed year’ with some new products coming onto the market, and hopes that local building suppliers will benefit from a government-backed affordable housing scheme.

The manufacturing industry plays a modest but growing role in PNG, contributing between six and nine per cent to overall GDP, in spite of a small domestic market, relatively high labour and transport costs, and competition from imports.

PNG manufactures a wide range of produce, including beer, soap, concrete products, clothing, paper products, matches, ice cream, canned meat, fruit juices, furniture, plywood, and paint.

Some manufactured products are being exported, including food and beverages, building materials, handicrafts, household items and furniture, and paints and coatings.

Paradise Foods, the oldest established food manufacturing company in the country, produces food products for the international and regional markets, including biscuits, corn chips and potato chips. International companies such as Coca-cola Amatil, Nestlé and Goodman Fielder also have a manufacturing presence in PNG.

Mixed bag

The year 2015 represents a ‘mixed bag’ for manufacturing, says the Chief Executive Officer of the Manufacturers’ Council, Chey Scovell, with concerns centred around government revenues.

‘We’ve had a number of members make significant capital investments over the last two years, so that was a sign of their confidence in the market,’ he tells Business Advantage PNG.

There is now the start of a holding off of investment, particularly in the fisheries sector, with some looking to set up elsewhere in the Pacific.

‘For members of our Manufacturers Council, they realise it’s time to get the processes right and to find those growth markets, so that they’re not looking at a boom-and-bust scenario.’

Housing is one area Scovell is optimistic about, saying local building suppliers could benefit from a government-funded ‘affordable housing’ scheme, which will see 40,000 new homes built in Port Moresby.

New products

After completing the upgrading of its Lae and Port Moresby plants in 2014, South Pacific Brewery—part of the Heineken international group—is pioneering new products, according to General Manager, Stan Joyce. ‘We see in Papua New Guinea an emerging middle class. ‘We see a growing number of younger drinkers whose tastes and expectations are different from their parents’

generation, and we believe the establishment of an international premium segment in Papua New Guinea will occur over a period of time.’

‘We’re a member of the global Heineken Brewery Group. They have over 220 brands in their portfolio. So we have a continuous process of looking at opportunities where we might do those.’

Cider is developing as one of those new drinks, he says.