The land of diverse manufacturing base: Scovell

THE country has a diverse and robust manufacturing base with a potential to expand, according to the PNG Manufacturers Council. Chief executive officer CHEY SCOVELL said in an interview with The National’s business reporter DALE LUMA that the Government can do better to assist the industry and other businesses grow by creating a holistic tax-friendly regime. This will allow the creation of more businesses to grow while also expanding the country’s tax base.

Q: Can you highlight the progress of PNG Made products and where the industry is currently at in its development?

Scovell: PNG has a diverse and robust manufacturing base.
Because of logistical challenges and lack of supporting infrastructure, our businesses are resilient.
Businesses such as Lae Biscuits, Prima and SP Brewery have been around, and have all endured.
We have also managed to have a regulatory environment that is supportive of manufacturing and we really need that to continue.
By and large, we also got an underserviced population which means there continues to be strong potential for growth.

Q: Who are some of the top manufacturers in the country at the moment?

Scovell: The top manufacturers (include) Coca Cola, Pacific Industries, they have Pepsi and Gold Spot, Paradise Group of Companies, Prima, Goodman Fielder, all of the canneries, RD Tuna, South Seas, New Britain Palm Oil, Trukai.
Then you have big industrial companies like Puma etc.
There is opportunity for continued expansion and Goodman Fielder is building a very big investment in Lae, the continued investments by New Britain Palm Oil (and) Lae Biscuits which is getting into noodles.
There’s a company called Mega Food at 8-Mile.
They started in Koki and have a water bottle operation and are now processing oil.
You had KK Kingston who was the only one producing oil for a long time now but you now have Mega Food which is also doing it as well as Goodman Fielder, now bottling in-country again.
Mega Food is a big entrant.
They are in coffee (and are) exporting as well.
We already have a lot of new players.
We have a dozen new companies now doing bottling.
Eventually, when we get security, power and all that sorted out, we’ll get investments in the agri-food sector.
It is also worth mentioning the LR Group of Companies.
Ilimo Dairy was a huge success and continues to be.
They did their Kuk Chips and now into poultry and strawberries.
Both Zenag and Mainland Holdings are doing significant investments to increase their capacity to supply.
These are all the things that companies are doing.
Rigo Rice is ticking along quit well.

Q: What are some interventions the Government can do to assist manufacturing businesses and the industry?

Scovell: The best thing the Government can do is make sure we have a friendly fiscal regime.
We are still a very high-taxed economy, 35 per cent company tax, profit tax is high and our salary and wages costs are high.
The employees are paying a lot of tax but that’s a cost born by the employers.
Employees just think about what they get in their hand and they don’t care about how much tax the employer has to pay to the Government.
They just want to know how much they are getting in their hand.
There’s always talks on all these special industrial zones and export zones and giving people large concessions.
Rather than giving these one-one concessions in all of these industrial centres, they should also have some holistic reforms.
Hopefully in the next term of Government, we have some steps to ease the burden of taxation rather than taxing a few people more.
We need to grow the economy and have lots more people doing business and take a little from everybody instead of a whole lot from a few.
That’s what’s happening now.
We are over-taxing a few people.

Q: Do you have any other comments?

Scovell: The other thing the Government can do (is) reforms in the food industry, now that we have a whole lot of new people in the market.
The Government has really fallen over in terms of the education, awareness and support as well as policing of things like food safety systems.
We have a whole lot of new food type manufacturers coming through particularly small and medium enterprises (SMEs).
But they really don’t have many food safety practices. So the Government needs to get things done such as establishing boards for national food sanitation council, and the National Institute of Standards and Industrial Technology, two key bodies for Papua New Guinea’s food safety and for the promotion and protection of the industry and its growth.
Both organisations have not had a board for more than six or seven years.