International Trade and Investment Minister Richard Maru proposes downstream processing of wood products within SEZ – Special Economic Zone 

The Minister for International Trade and Investment Richard Maru has proposed to venture into downstream processing of wood products within a SEZ- Special Economic Zone with the PNG Forest Authority – PNGFA. 

He made the proposal last Thursday ( 24th of April) at the PNG Forest Authority Headquarters during a special meeting with the Managing Director of PNG Forest Authority John Mosoro and senior officers. 

Minister Maru was accompanied by Secretary Ms Jacinta Manua and met with PNGFA Managing Director Mr John Mosoro and his senior staff members comprising of Ms Magdalene Maihua, Chief Operation Officer, Mr Mark Pilon, Corporate Strategic Planner, Ms Verolyn Daugil, Director Economic & Trade and Mr Gabriel Gabonen , Manager, Connect PNG Programme in Forestry. 

PNGFA Managing Director John Mosoro welcomed the senior Government Minister and his delegation on behalf of the Forest Minister and the Chairperson of the National Forest Board . 

They discussed strategic solutions to implement Government Policy relating to phase out log export and promote downstream processing of all logs in the country under the current Special Economic Zone Policy. 

MD Mosoro provided an overview of the proposed operation of the PNGFA and emphasised the need to fast track specific tasks relating to amendment of the Forestry Act, Total Forest Inventory of the forest resources in the country, reforestation and plantation programmes and downstream processing of all logs into wood products for export to international markets based on best terms and conditions of pricing formula used in under EU markets abd others. 

The MD also expressed grave concern regarding lack of financial lending to support Government Policy on log export ban and downstream processing. 

“ We have written to the Treasurer on several occasions to fund downstream processing feasibility studies of 4 log ponds or export zones but did not get the funding requested despite the fact that the costs are already being approved by NEC and also in our budget submission last year. 

“ I am really concern that if there is a bias funding by Treasurer then this policy on downstream processing will fail and that will be a major loss to revenue generation this Government,” MD Mosoro said. 

The PNG Forest Authority has also expressed interest to take part in the Osaka World Expo 2025 in Japan to showcase to the world PNG’s rich and unique forest resource and attract investment. 

The Osaka World Expo began on April 13th will continue till October. 

MD Mosoro and senior Forest Officers briefed Minister Maru and Secretary Manua of the progress of the PNGFA and its potential in attracting investors at the expo. 

They stressed that the development of the forest resource is not just focused on logging but on downstream processing, and natural values of the resource – nature based solutions. 

“ We are phasing out the export of round logs by the end of this year 2025z This is a government policy we need to implement. 

“ We are looking at nature based solutions – putting a value to our Forest resource. Our trees, the leaves and barks have economic value. We have an arrangement with the United Kingdom who are assisting us to put a value to our Forest resource,” MD Mosoro said. 

He added ; “ PNG forests are rich and can capture and absorb carbon emissions instantly from industrial countries from any part of the world,” 

MD Mosoro was supported by his corporate strategic planner Mark Pilon who said investors globally are environment conscious. 

“ Logging and chopping of forests does not fall in the top 100 global activities anymore, “ he said.

PNGFA’s Chief Operating Officer Magdalene Maihua added that downstream processing and tree plantations are the way forward. 

Ms Maihua said PNG FA plans to plant 800,000 trees by 2050 under its reafforestation program but added that funding is an issue. 

PNGFA’s Director Economic and Trade and PNG Diwai Holdings Ms Verolyne Daugil said PNGDHL’s intent is to market PNG’s forest Products to the international market and will look at investment opportunities during the expo.

“ With the establishment of the PNG Diwai Holdings there is an opportunity to partner with investors to acquire logs for downstream processing and export,” Ms Daugil said.

She added that PNG Diwai Holdings is not receiving adequate funds committed by the government to support its operations and this is posing a challenge.

Ms Daugil said the high tax imposed by the government on log export of 50 percent is also a challenge to the industry where almost 90 percent of operations have shut down.

“ Forestry has a lot of potential and opportunities . At the end of the day the environment for investment must be conducive,”Ms Daugil said. 

Manager of Connect PNG projects in Forestry Gabriel Gabonen said existing Forest management projects have built a roads at the rural remote sites. He said PNGFA has partnered with the Works Department to link the road projects with the national Works connect PNG program. 

Minister Maru responded commending the MD and supporting the establishment of PNG Diwai Holdings . 

Mr Maru said he saw a good potential in forestry and downstream processing and it’s contribution to the national economy. 

He suggested that PNG FA and his department sign an MOU to partner in a SEZ, special economic zone where tax and other incentives are in place to attract investors to do business. 

“ I am happy to sign the agreement with PNG FA and the Forest Minister and support the proposal in cabinet,” Minister Maru said.