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.

Business Advantage Papua New Guinea - - Manufacturing -

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.

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