Cheap imports hit

Business, Normal

The National, Friday March 7th, 2014

 ALTHOUGH the country’s economic growth in the past 10 years has spurred demand for locally manufactured goods, cheap and dumped imports continue to make inroads into the local market.

Manufactures Council of Papua New Guinea chairman Murray Woo said the goods ranged from construction materials and paint products to enormous range of processed foods and cleaning brands. 

He said the prospect of a petrochemical industry in PNG also raised possibilities for the future.

On the other hand, there was a growing concern over cheap imports into the country that were posing threats to local producers, according to Business Advantage PNG. 

There were reports of foreign companies allegedly dumping goods in PNG or under-declaring imports’ value.

Imports were essential for any economy to function properly, but dumping – the importation of goods at prices below the cost of production – is causing headaches for some of PNG’s producers.

General manager of Goodman Fielder’s operation in PNG, Peter Tannahill, estimated the company lost significant sales as a result of cheap and inferior flour imports.

“When flour is transported in containers across oceans and then sits on wharves for an extended period of time, it starts to deteriorate,” he said.

Mainland Holdings was one of PNG’s largest agribusinesses, with strong focus on poultry and eggs for domestic consumption, merchandised under the high-profile Tablebirds brand.

However,its major competition comes not from other domestic producers, such as Zenag Chicken,but from imported poultry products from Australia and New Zealand.

Mainland’s corporate affairs and research manager, Dr Keith Galgal, explained the challenge for local producers:

“Imported products are landed in Papua New Guinea at costs lower than our costs of production, so the first thing we have to do is look at ways we can reduce our costof production – to be competitive without compromising quality.”

The  company is looking to reduce the cost of stockfeed by using local alternatives to imported wheat and soy bean, such as cassava root flour and fishmeal, a by-product of PNG’s fast-developing fish processing industry.

Meanwhile, other major costs such as power generation and security services would also need to be addressed to reduce cost of production and improve competitiveness.