The range of products manufactured in Papua New Guinea is growing all the time.

PVC electrical conduits made by Pipemakers in Lae, Morobe Province

The range of goods made in PNG is quite impressive. Much of PNG’s manufactured produce is aimed at a domestic consumer market that is growing so rapidly—albeit from a low base—that many local manufacturers are struggling to meet demand. Many producers also cater to the business-to-business market, especially the booming mining, petroleum and construction sectors.

Given PNG’s wealth of natural resources, it is little surprise that downstream processing plays an important role in the manufacturing sector. Examples include the loining and canning of fish, converting local timber into plywood, roasting coffee and even the refining of gold. At the same time, the potential exists to significantly expand the scale and scope of downstream processing.

Papua New Guinea’s non-mineral exports

Source: Bank of PNG (2011 figures)

• Palm oil 1477 million kina
• Coffee 927
• Forest products 768
• Cocoa 320
• Marine products 260
• Copra oil 174
• Copra 71
• Rubber 41
• Tea 14.2
• Other 291

In global terms, PNG’s manufacturing sector is small and has a high cost of production. Naturally, this acts as a barrier to exporting, and yet local producers are increasingly finding new markets, particularly in the neighbouring Solomon Islands and other Pacific Islands, but even in Australia and New Zealand.

Asserting PNG quality

There is certainly no doubting the ability of PNG to produce high quality goods, be it S P Lager (that has penetrated the fiercely competitive Australian market), industrial products from K K Kingston or the stylish furniture produced by Cloudy Bay Sustainable Forestry. Multinationals such as Nestlé, Coca-Cola Amatil and Dulux manufacture their renowned brands in PNG, while local manufacturers Paradise Foods has gained international acknowledgment for its model operation.

The range of goods produced in PNG

• Beverages: beer, soft drinks, vodka
• Building: pre-fabricated building (wood/steel), roofing materials, cement, plywood
• Food: biscuits, snacks, noodles, baking products, canned meat/fish, smallgoods
• Handicrafts: pottery, embroidery
• Household items: furniture, beds, mattresses, cooking utensils
• Industrial products: chemicals, water tanks
• Packaging: aluminium cans, corrugated cardboard
• Paints and coatings
• Personal care products
• Printing: offset and digital
• Refined petroleum
• Textiles: footwear, school uniforms

Important contribution

PNG’s manufacturing sector reportedly employs around a quarter of the formal workforce, while its contribution to GDP is estimated at between six and 11.5%.

Much of PNG’s existing manufacturing sector is centred around Lae and, to a lesser extent, Port Moresby. In a recent survey of its members, the Manufacturers Council of PNG discovered that more than 75% were planning greater investment into the future than over the previous three years. ‘There is certainly no doubting the ability of PNG to produce high quality goods’

The PNG Government is seeking to encourage local production by offering incentives and concessions to manufacturing enterprises. Incentives include export sales exemptions and wage subsidies. The government is also attempting to address the factors limiting growth of this sector, particularly infrastructure problems such as road maintenance and upgrading around Lae.

First published in Made in PNG 2012