With the world slowly going back to a ‘new normal’ and Papua New Guinea’s population growing, opportunities abound for Papua New Guinea’s manufacturers. If challenges can be addressed, they say, the future could look even brighter.

PNG galip nuts

Pacific Foam’s Nihal Shah

There are significant opportunities in Papua New Guinea’s manufacturing sector because its growing middle-class has a need to buy local products, according to Nihal Shah, Chairman of the Pacific Foam Group.

He believes the trend is only going to grow. 

‘The middle class [in PNG], like in many other developing countries, is increasing,’ Shah said during a recent Australia–Papua New Guinea business forum. ‘That part of the population, the aspirational consumer [will need more products], and we see opportunities to grow significantly in the medium term to meet that demand.’

He has seen a significant increase in demand for locally-manufactured residential furniture.  

With PNG’s population reaching over 10 million people, ‘the size of the market can sustain a wider range of manufactured products … We believe there are plenty of opportunities.’ 

Shah said that those trends will continue in ‘the consumer goods space and non-food consumer goods’.

Working together

For agricultural processing and manufacturing, there are opportunities within reach too: PNG’s next door neighbour, Indonesia, is a potential market with a population of over 200 million, according to Murray Woo, Chairman of the Manufacturers Council of PNG.

Woo, speaking at the same forum, explained that in over 25 years, exports to the country have increased at an annualised rate of 9.92 per cent. PNG currently exports vanilla, cocoa beans, tinned products and wood to Indonesia and could export more.

Dorothy Devine Luana, Managing Director, DMS Organics, a company that processes and packages the galip nut, told the forum that manufacturers need to see who is who in the market to create synergies.

‘We don’t want to import expats to do this jobs. We want to invest on the local people. We want to bring the experts in to be the conduit and the trainer, but we don’t see this as a long-term fix.’

She believes there’s ‘not much competition at this point in time in the agribusiness sector, especially with processing and packaging of local produce that can be bought at the supermarket.’

Luana said it’s not about reinventing the wheel, but finding ways to get those opportunities.

Challenges

To get those opportunities, manufactures need to address several challenges, including access to reliable power, better infrastructure and better local distribution.

The PNG government and its electrification partners (Australia, Japan, New Zealand and the United States) are working together towards connecting 70 per cent of PNG’s population by 2030. Other projects, such the development of economic zones, will help address infrastructure issues. New highways and roads will help improve local distribution, but other problems directly impacting manufacturing have been identified, including an unstable regulatory environment.  

‘We see a lot of issues. Reports regularly where, from one day to the next, the rules [change] and we see imposition of tariffs that previously didn’t exist and essentially become a tax,’ Warren Mainey, General Manager at Goodman Fielder in PNG, told the forum. ‘There’s no rationale for applying a tariff if there’s no local manufacturing [industry] that it’s actually meant to be supporting.’ 

Mainey, who also identifies lack of skilled staff as an ongoing problem for the manufacturing industry, says that it makes sense to train local people.

‘We don’t want to import expats to do this jobs. We want to invest on the local people. We want to bring the experts in to be the conduit and the trainer, but we don’t see this as a long-term fix. The long-term fix is to develop local talent.’