In spite of the challenges, Papua New Guinea’s second city, Lae, is experienced some significant new investments. Business Advantage PNG sits down with John Byrne, President of the Lae Chamber of Commerce, to discuss the state of play in the country’s “engine room”.

Aerial photo of Lae Port. Credit: ICTSI

Business Advantage PNG: How important is Lae as a business hub in Papua New Guinea?

John Byrne: Lae is the engine room of the country, it’s the heart of the country. Port Moresby is the capital, or the head office, but Lae is the central hub. We are the shipping port that sees 60 per cent of all international goods come through Lae, we are the only access to the Highlands and all the way up the country. We have domestic transport all around the country and an international airport.

“The important thing we need to do is to tell the world that Papua New Guinea is not a dangerous place.”

We are critical in terms of innovation, being the manufacturing hub and the distribution hub of the country.

BAPNG: What are the key areas of activity and who are the major players?

Lae Chamber of Commerce’s John Byrne

JB: In terms of manufacturing, we have Nestlé, Coca-Cola, the Lae Biscuit Company, Goodman Fielder, Trukai, Mainland Table Birds and Zenag Chicken. They are the majors in terms of produce. Prima Smallgoods is a great provider of goods and smallgoods around Lae, and there are other players like Dulux, and NCI Packaging, which makes fuel drums and tins.

Ramu Sugar has been here a long time. In terms of transport companies, we have three of the majors: Express Freight Management is doing a lot of domestic work around town and we have Mapai Transport and iPi Group.

There are also a lot of smaller players that are vital to the whole network, including in manufacturing, distribution and transportation.

BAPNG: How is economic activity tracking?

JB: At the moment, it’s a challenge. We have challenges with power and foreign exchange, and we have challenges with connectivity and transport costs. Transport costs are very high because of the state of the roads and the fatigue on the trucks, but it’s better now than it has been in a long time.

The other challenge is fuel: the supply is a bit difficult and that has hurt the economy.

With the reduction in the exchange rate, we have taken a bit of a belting. This has made it harder for businesses to make a profit and to keep operating, but businesses here are resilient. There are still massive opportunities for investors. We have some big players investing big money locally. Goodman Fielder is building a new flour mill, Coca-Cola is investing a lot of money in a new PET bottling plant and Nestlé is about to make some new investments. Snax Biscuits is about to do a whole new production line for their biscuits.

So, there’s a lot of confidence but it’s a matter of turning it into results.

BAPNG: Have there been any new companies setting up in recent times?

JB: Most new players are smaller Chinese companies. These new companies are bringing a whole new level of competition but there are no really big names coming in at the moment.

BAPNG:: What about the future?

JB: I’m an optimist. I have been around long enough to see the cycles of business going around, I’ve seen inflation, deflation and stagflation. We will batten down the hatches and come out the other side stronger. What is needed is leadership that can make some hard decisions and face reality.

The important thing we need to do is to tell the world that Papua New Guinea is not a dangerous place. There is not a country in the world that doesn’t have danger spots, and there is such opportunity here. Don’t believe every headline you read. We need to advocate to the world that we are better than the headlines.

Lae Chamber of Commerce President John Byrne will be a participant in the 2024 Business Advantage Papua New Guinea Investment Conference, taking place in Brisbane on 12 and 13 August. To view the program and register, click here.