What’s behind Air Niugini Cargo Limited’s recently implemented 50 per cent discount on a range of freight exports?  ANCL’s General Manager, Gus Kraus, explains the thinking behind the move to Business Advantage PNG.

Air Niugini Cargo plane. Source: ANCL

By providing a 50% discount on the freight costs of exporting Papua New Guinean goods, ANCL—a subsidiary company of Papua New Guinea’s national airline, Air Niugini Limited—is hoping to incentivise farmers and Papua New Guinean businesses, says Kraus.

‘We see these discounts as playing an important role in providing a much needed incentive to support farmers and exporters.’

These goods include Papua New Guinean-made agriculture products such as coffee, chocolate, vanilla, root crops including kava, as well as coconut oil and some developing fruit and vegetables (seafood is excluded).

Capacity

ANCL has capacity out of Port Moresby on its Boeing 767 aircraft and, as a result, had been reviewing ways to fill the under-utilised space while also assisting exporters, Kraus tells Business Advantage PNG.

‘We see these discounts as playing an important role in providing a much-needed incentive to support farmers and exporters who are looking to expand their businesses.’

Air Niugini’s Gus Kraus. Source: ANCL

‘The discounts will also encourage new players with a strong foreign currency income to get involved,’ he says.

Commodities currently taking advantage of the offer include coffee and cocoa, with chocolate and cocoa powder as the finished product.

Some coffee exporters of roasted coffee are also benefiting from the discounts, and Kraus says vanilla exporters are likely to come on board in the near future.

‘With a market for specialty coffee from Papua New Guinea to Asia, Europe and the United Kingdom including to Pacific countries such as Cook Islands and Fiji also acquiring the PNG-made roasted coffee taste, this is a great opportunity for our coffee farmers and exporters.’

While initially only a handful of farmers and exporters have taken advantage of the offer, ANCL expects the discounts to support more businesses over time.

Export marketing

Further support to businesses seeking to export local products could also be provided through a coordinated approach to marketing, he says.

‘There is a lack of a coordinated effort by one marketing body with the right skill set to ensure the quality of product and that export requirements are met by our local exporters.’

‘A consistent and coordinated approach to marketing will benefit all local exporters and enhance the Papua New Guinean brand.’

‘All local products should be marketed under the one banner as ‘proudly made in PNG’.

‘A consistent and coordinated approach to marketing will benefit all local exporters and enhance the Papua New Guinean brand,’ Kraus explains.

‘Where possible we will support local businesses accessing new and untapped markets, and to ensure Papua New Guinea has a competitive advantage in the region,’ Kraus adds.

Domestic support

Domestically, following the recent introduction of an additional ATR-42 aircraft for air freight under a partnership with Hevilift, ANCL hopes the government gets on board by providing support for specific routes to ensure fresh produce gets to market in a timely manner and helps farmers achieve a better price for their produce.

‘Either the government assists with incentives to Air Niugini Cargo for lifting fresh commodities, or they help with direct payments to those exporting to Port Moresby to offset the perception of high freight rates,’ says Kraus.

While operating a freighter aircraft is costly, Kraus says it’s a critical service for high value products that require airfreighting due to time sensitivity.