Sector receiving ‘big investments’

THERE have been big investments in manufacturing over the past five years, says PNG Manufacturers Council chief executive officer Chey Scovell.
Scovell said they included capital investments by existing local manufacturers such as Goodman Fielders’ new processing mill in Lae, Pacific Industries, Pepsi, and Mainland Holdings’ upgraded flour mill.
“Investments are made on the basis of expected returns,” Scovell told The National.
“The areas of manufacturing are food (bakery, small-goods, milling), beverages (non-alcohol and alcohol), tobacco, cement fabricated products (bricks, drainage pipes), commercial and residential framing (windows, doors), housing.
“I can’t give a quantum on this.”
He said membership of the council was voluntary.
“But I can confirm that we have inspected and approved membership for new entrants over the past 18 months,” Scovell said. “Albeit a threat to security and welfare, our rapidly expanding population which continues sadly to miss out on formal employment gives rise to opportunities in low-cost fast-moving consumer items, especially foods and beverages.”
He said PNG was in a prolonged recession, largely as a result of policy failures.
“Many of the investments over the past few years did not foresee the State not realising opportunities in the extractives sector for this extended duration.
“They were buoyed by the announcements to get better deals. They just didn’t foresee such a lengthy delay.
“When these kick in, the increased employment and economic activity will drive increased spending and these new manufacturers will be better placed to capture some of that spending.”
He said there was a very conservative and cautious outlook for 2022 “based largely on the uncertainties around the general election and security”.
“The reluctance of the State to tackle meaningful tax reform will continue to constrain expectations and spending,” he said.
“We have been advocating for 3 to 5 per cent reductions in the top three or four salary and wages tax rates which will provide an immediate boost to consumer spending.”