David J Alcock, CEO, Mainland Holdings: Viewpoint

David J Alcock, CEO, Mainland Holdings

Viewpoint: David J Alcock

We should all recognise that a lot has been done by the current administration when compared to previous ones in overhauling the city’s infrastructure. However, inadequate roads and infrastructure in general represent perhaps the first and foremost challenge for any company operating in what is considered to be the industrial centre of Papua New Guinea. In our industry, due to the poor condition of the roads, vehicles frequently break down while delivering services to farmers and this has a huge impact on costs and time management.

Power is the second major issue I would say and even though additional gas turbines were installed in Lae city in 2015, we often have to rely on our own generators, which means in many cases having to buy as much as 100,000 litres of diesel weekly. The manufacturing base in Lae is destined to grow in the future, taking advantage of the city’s strategic position as a gateway to the Highlands, and a more sustainable long-term measure needs to be put in place to spur economic growth.

Thirdly, I would say that the lack of law and order clearly hinders investment not only for the manufacturing industry, but for the economy as a whole. The upgrading of the highway to link Lae with Nadzab, being built by China Railways International, is certainly a good initiative, and upon completion by the end of 2017 this link will provide an immediate relief to some of the problems listed above.

A few well placed police posts along the way would certainly make a great difference security-wise, as private companies are obliged to employ security companies in order to protect the movement of their goods and personnel, which again adds to the already high cost of doing business in PNG.

Boosting infrastructure and power supply while addressing law and order will help to facilitate the export of manufactured products from Lae to both the domestic and international markets. Take for instance the poultry industry. PNG is the only country outside of Australia and New Zealand that boasts grandparent and parent chicken farms. Therefore, we have a real desire to drive the genetic base extension, and competitively supply the Asian market with our products. The export of poultry products requires a very high standard, when it comes to bio-security.

Our parent stock could leave the airport in Moresby tomorrow and reach Kuala Lumpur overnight with a very competitive offer for the Malaysia market. This would eventually contribute to lifting our standards even higher in the future. That is the direction where we want to move, as we are very serious about the opportunities ahead of us, but of course we will need the government to support the industry with the adequate infrastructure, as at the moment our production continues to be too expensive within the region and beyond. The overall goal is to become the Pacific’s top poultry supplier for the Asian market.

When it comes to bio-security, PNG has also recently banned the import of uncooked poultry from Australia, as there have been serious cases there of both campylobacteriosis and Newcastle Disease. If imported, these diseases could wipe out our entire flock. That would trigger enormous economical consequences as one can imagine.

In fact it is not the first time that this has occurred, as a similar ban was also imposed in 2012 because of an outbreak of H7 bird flu in New South Wales.

At the end of the day what PNG wants is the same standard of bio-security applied in Australia, New Zealand and even Fiji, which allows only cooked poultry to be imported into their countries. Of course this ban will also have a positive impact on the domestic industry here in PNG, which is worth approximately PGK750m ($283.8m), according to the PNG Poultry Association, while imports amounted to roughly 5-10% of the total production. There is enough capacity to supply the vacuum, also because most of the imports were basically wasteful products that had no real market back in Australia.

Anchor text: 
David J Alcock

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The Report: Papua New Guinea 2015

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