KRISTY ATTARD | Business in Focus
THE ISLANDS OF THE SOUTH PACIFIC often bring to mind sparkling beaches lined with coral reefs and lush rainforests rather than manufacturing, innovation and progress.
Papua New Guinea is renowned for its rugged natural beauty and vibrant tribal culture but, interestingly, the country has seen some significant growth in manufacturing.
In recent times, there have been some intriguing developments taking place that are having a positive impact on the economy and local industries.
Papua New Guinea may one day, for instance, be recognised as the tuna capital of the world. Copra farmers are now supplying a sustainable alternative to tropical hardwoods, one that would have been wasted in the past. People in China may soon be enjoying a cup of coffee from PNG.
The pristine waters surrounding PNG are teeming with marine life, which includes migrating schools of tuna. While the vast majority of canned tuna on supermarket shelves is a product of Thailand, that looks likely to change in the future with all eyes on PNG.
Unlike Asian countries, PNG has full duty free access to the European market, the world’s most lucrative market with around 500 million customers through its Economic Partnership Agreement.
Papua New Guinea is rapidly becoming a strong player in the international tuna industry now that an enormous tuna cannery, Majestic Seafood, has been built at Malahang in Lae.
The $38 million Majestic Seafood cannery opened in June this year. The company is dipping its toe in the water by employing 2,500 people initially, the majority of whom are women; the plant can accommodate close to 7,000 people.
Majestic Seafood is currently processing 150 metric tons of fresh tuna a day, 80% of which comes from the waters surrounding PNG. The plant will eventually have the capacity to process a staggering 600 metric tonnes of tuna a day. The daily catch is unloaded from boats into insulated trucks and transported to Majestic Seafood to be processed.
The opening of the plant has sparked monumental change and investment in Lae, which has a high crime rate. There are plans for refurbishing the port, upgrading road infrastructure and building a new international airport terminal. The opening of Majestic Seafood has created jobs for many local people and numerous spin off businesses are appearing.
It will be interesting to see the impact that state of the art companies like Majestic Seafood will have on the empowerment of women in Papua New Guinea by providing major employment opportunities. There are plans to establish more large canneries in the future in Lae, which will see PNG double its current tuna production.
Canned tuna is not the only product creating change and projecting Papua New Guinea onto the world stage. Coconut palms are one of the world’s most iconic trees. Known as the ‘tree of life’, coconut palms are common throughout the South Pacific.
In 1884, German settlers planted numerous coconut plantations around the northeastern quarter of Papua New Guinea and coastal areas for the production of copra, which is the dried inner flesh of the coconut.
Coconut oil is extracted from copra and the by-product known as copra meal is used in the manufacture of animal stock feed. Copra farming is nothing new in PNG but growers have found a profitable and sustainable way to deal with coconut palms that have reached the end of their fruit bearing life.
Coconut palms will bear fruit for around 70 years. In the past, senile coconut palms and plantations were felled and burned or used as landfill. A few years ago, it was realised that senile coconut palms can be used to manufacture palmwood.
This is an ecologically sound choice that has the same exotic appeal as endangered hardwoods sourced from rainforests. No rainforests have to be destroyed to harvest palmwood; all the lumber is sourced from senile coconut palms and plantations.
Depending on the density of the wood, the colour can vary from a light honey to dark tan and is always patterned with distinctive dark brown flecks throughout. Since the coconut palm has no limbs, palmwood has no knots. It is exceptionally strong and durable, making it suitable for high traffic areas in the home and office.
Many Australian flooring manufacturers are now examining the potential that palmwood has for their domestic manufacturing operations. Palmwood is also being used to manufacture furniture, from tables and chairs to desks and cabinets. The palmwood industry is still in its infancy in Papua New Guinea but looks like it will have a lucrative future.
While the palmwood industry holds tremendous potential for growth, the humble coffee bean is still the star of Papua New Guinea’s agricultural sector. Coffee exports earn K460 million annually for PNG, and over 90% of the coffee is produced by smallholders with almost 400,000 households involved.
Every village produces coffee that bears distinct characteristics; this depends largely on who processes the beans. Many of these coffees are organic since the growers cannot afford to use chemical sprays and synthetic fertilisers but the quality can be inconsistent.
Commercial coffee plantations that range anywhere from 20 to 200 hectares wet process and dry coffee beans inside large facilities. While these estates have superior quality control procedures which produce a more consistent product, some people actually prefer the distinct flavours and aromas of coffee produced by smallholders.
Papua New Guinea exports over a million bags of coffee beans each year – these traditionally go to the European market, but China has been identified as a potential export partner. Last year, 10 coffee companies in PNG were invited to attend the 10th China Agriculture Trade Fair held in Beijing. Over 30,000 visitors from all over the world attended the event.
If PNG does establish China as an export partner for coffee, will it be able to improve overall product quality and increase production to meet the huge demand? It has been suggested that the coffee companies and cooperatives of PNG would be better off supplying niche coffee markets in China with speciality products like organic coffee. Provided that PNG can meet the quality specifications of the Chinese market, the coffee industry is going to have a new lease on life in the years to come.
The growth of manufacturing in PNG has by no means been an easy path, with 80 per cent of the population living in impoverished remote and rural communities. Access to basic health care and education is still limited and nearly half of the adult population is illiterate.
While provinces like Jiwaka have the potential to increase coffee production, transport and infrastructure problems like poorly maintained airstrips are holding back development. Almost 100% of women living in the coffee growing highlands report suffering gender-based violence.
Yet the growth of manufacturing in Papua New Guinea has the potential to propel the nation into a more prosperous and progressive era. There is great potential for innovation in challenging the old ways of doing business and welcoming new ideas.
Women are going to be lending their hands to the growth of manufacturing in the journey forward for PNG. Over time, hopefully hearts and minds are going to begin making progress too, as Papua New Guinea becomes increasingly connected to the outside world via investment and trade.