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Port Moresby
October 19, 2019
Business News

PNG Manufacturers Struggling with High Costs of Production

Most manufacturers in PNG are struggling with high costs of production, resulting intheir products selling at higher prices than similar imported goods.

 

Some manufacturers say ifthe National Government reduces some ofthe production costs imposed onthem, consumers can enjoy cheaper products.

For most low and middle income earners and ordinary Papua New Guineas,the purchase of store goods depends onthe pricing.

 

According to ICCC, products manufactured in PNG cost more due tothe cost of production inputs such as land, infrastructure, fuel, materials, electricity, water, and ports services.

 

“PNG manufactured products are more expensive compared tothe imported products due tothe fact thatthe general operational cost oPNG manufacturers are high,” says Dr. Belly Manoka – ICCC Commissioner.
 

Some ofthe production input like water and electricity are owned bythe government and suppllied through state-owned enterprises. Manufacturers say ifthe government reducesthe bills charged onthem,the cost ofthe products sold can be reasonably reduced.

 

“High cost of operation of course in Papua New Guineaitself discourages people setting up for exporting. High cost of power is something that we would likethe government to address,” says Stan Joyce – General Manager, SP Brewery.

“Producing in PNG is very expensive compared with neighbouring Asian countries. Electricity and water are high cost in our production. And, ifthe government can reducethem, that will impact positively on our costing,” says Mikael Ruben – General Manager, Akzo Nobel.
 

It is now up tothe government to consider such suggestions in order to alleviatethese struggles bPNG manufacturers and consumers alike.

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