Hard to draw global retailers, says CPL

Business, Normal

Then National, Tuesday 11th September, 2012

ATTRACTING international retailers into PNG will get harder if the country’s outlook does not make it easier for them, according to City Pharmacy Ltd managing director Mahesh Patel.
Patel, who runs PNG’s largest supermarket chain, told the Papua New Guinea Advantage 2012 investment conference in Port Moresby yesterday that global players were also reluctant to enter PNG due to perceived and real security issues.
“And they are also reluctant if their own assessments indicate unrealistic volume expectations and superficial sales targets,” he said.
“No significant international retailer wants to spend its shareholders’ cash on more than 5% of their operating costs on security and insurance just to penetrate the market.
“I reiterate that the supply chain from the garden, to manufacturing, to retail and household is a problem that has to be addressed from a national perspective.
“For a developing nation, it is the most-critical issue hampering business growth and local prosperity.
“For most people, the means of making an honest living is selling raw products to an accessible market or retailers – for a better price.
“This is not happening, because of high costs to everyone in the chain.”
Patel told of CPL’s buying fresh vegetables in the Highlands and air freighting them to Port Moresby.
“We charter an aircraft five times a week to bring fresh vegetables to sell in Moresby,” he said.
“It’s the fastest and most-reliable mode of transportation, so the perishable items are as fresh as we can deliver.
“Our customers and clients expect this and we strive to deliver on our promise.
“I have now assumed a key role in the supply chain as a charter management specialist.
“Thankfully, I am not a pilot, or the temptation would be for me to fly and pick up the vegetables myself.
“The problem is not restricted to the Highlands … it’s across the country!”
Patel said high import duties and in some specific categories, government restrictions on new entrants as a policy to protect local manufacturers, was another problem.
“It’s an issue that the ICCC (Independent Consumer and Competition Commission) has recognised and is addressing, as we see in public reports and debate on rice, sugar, and chicken,” he said.
“The list goes on.”