PNG is seek­ing to reach a ma­jor mile­stone on its jour­ney to be­com­ing a re­gional fish pro­cess­ing pow­er­house.

Business Advantage Papua New Guinea - - Contents - By Kevin Mcquil­lan

The plans for Pa­pua New Guinea’s fish­ing in­dus­try are am­bi­tious. The Prime Min­is­ter Peter O’neill is on record say­ing his gov­ern­ment’s aim is for the in­dus­try to be­come the largest tuna pro­cess­ing and can­ning hub in the re­gion, ahead of Thai­land and the Philip­pines.

Al­though there is a long way to go be­fore that is achieved, there are pos­i­tive signs. Alan Mclay, Pres­i­dent of the Lae Cham­ber of Com­merce, de­scribes Lae’s es­tab­lished fish canneries as ‘the shin­ing light, es­pe­cially the tuna canneries re­ly­ing on stock from Morobe wa­ters.’ Mclay says a new can­nery will be built soon, which, he says, shows ‘the strength of this in­dus­try’.

An­other ini­tia­tive is the pro­posed es­tab­lish­ment of a Pa­cific Ma­rine In­dus­trial Zone pro­ject in Madang Province. It is to have up to 10 tuna canneries and other port fa­cil­i­ties, lo­cated on the Madang La­goon.

The pro­ject has faced de­lays and cost in­creases, how­ever. Ac­cord­ing to the EXIM Bank of China, which is a 78 per cent part­ner, the bud­get has in­creased by US$61 mil­lion (K194 mil­lion) on top of the orig­i­nal US$95 mil­lion (K300 mil­lion) se­cured under phase one.

The area will en­com­pass 100 hectares for the in­dus­trial zone and 115 hectares for res­i­den­tial and com­mer­cial use. An­ton Yagama, Vice Min­is­ter in charge of the pro­ject, hopes op­er­a­tions will be­gin in the first half of 2017.

Lo­cal man­u­fac­tur­ing

Pete Celso, the Man­ag­ing Di­rec­tor of the coun­try’s big­gest can­nery, the Philip­pine-owned R D Tuna Can­ners, and chair­man of the Fish­ing In­dus­try Association (PNG), is pos­i­tive about the pro­ject but says ‘the big­gest chal­lenge is to make it hap­pen’.

A 2017 re­port by the Fish­ing In­dus­try Association found that PNG in 2012–2013 ex­ported more tuna than it im­ported. The re­port pointed to an al­leged lack of border con­trol.

‘We have more than enough lo­cal man­u­fac­tur­ers and canneries to sup­ply the needs of the en­tire na­tion with sur­pluses,’ says Celso. ‘Here you are try­ing to en­cour­age lo­cal pro­duc­ers to do it and yet we sim­ply don’t have much con­trol on all these im­ported items whose guide­lines are a bit dif­fer­ent from the lo­cal pro­duc­ers.

‘ To me it doesn’t make any sense be­cause most of the tuna that comes back was the same tuna that was caught in PNG wa­ters. But for­eign can­ners can pro­duce it much cheaper be­cause the cost of do­ing busi­ness is not only lower over­seas, their re­spec­tive gov­ern­ments have built in­cen­tives which we don’t have here.’

Celso points to other is­sues fac­ing the in­dus­try. One is the lack of for­eign ex­change. An­other is the ris­ing cost of do­ing busi­ness. Main­tain­ing mar­ket ac­cess is a fur­ther chal­lenge.

‘We used to be get­ting al­most ex­clu­sive duty free ac­cess to Europe, but Europe is now try­ing to give the same ben­e­fit to a good num­ber of coun­tries whose cost of do­ing busi­ness is much lower.’ 


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