The Government will be partnering the private sector in major investment projects with the aim of replacing imports and downstream processing of all raw materials into final products with the agriculture, forestry, and fisheries sector as the target. This announcement was made today by the Minister for International Trade and Investment, Hon. Richard Maru. He said the Government will be taking up equity with the private sector in over 15 investment projects over the next two years.
“It is very important for our Government to de-risk investments by taking up equity to attract the private sector to partner the Government to invest in businesses in the agriculture, forestry and the fisheries sector,” said Minister Maru.
“Our Government fully understands the perception that our country is a hard place of doing business given our law and order issues, land ownership issues and other impediments like continuous power black outs and expensive cost of utilities including electricity which have made investment difficult and high risk,” he said.
“In terms of appraising investment opportunities, private accounting firms will be engaged to complete financial evaluation of all the investment opportunities and only investments that would bring attractive rate of return will be considered for investment by the Government,” said Minister Maru.
The first accounting firm to be engaged by the Government to complete the financial evaluation of first three investment projects is KPMG. Minister Maru announced that these first three investment projects that the Government will be giving priority were the establishment of an instant coffee factory in Lae and two new dairy farms- one in Lae and another one in the Sepik Plains.
“The establishment of the instant coffee factory in Lae will result in replacing of over K50 million worth of instant coffee that PNG imports annually, including the famous 3-in-1. This will be the start of processing coffee into final products and the Government hopes that if this project is successful, we will invest more in processing with plans to end the export of coffee green beans in our country and only export final coffee products over the next few years. This will result in a big increase in the prices for coffee farmers which will make our people to seriously work in their coffee gardens, resulting in more coffee production,” said Minister Maru.
The other project of priority is the establishment of two new dairy farms in PNG following the success of the Ilimo Dairy Farm which is not able to supply the total dairy requirements of the country.
“Ilimo farm supplies one-third of the total dairy needs of our country and has replaced K100 million in dairy imports from Australia and New Zealand. PNG still imports up to about K300 million worth of dairy products from Australia and New Zealand annually. For the two dairy farms that we are looking at, each of them will cost K120 million and will create over 600 new jobs. The dairy farm that is planned to be established in Lae will supply the Momase, Highlands and the New Guinea Islands Region and the one in the Sepik Plains will supply the Sepik Region and will also target West Papua in Indonesia,” said Minister Maru.
Minister Maru said that other investment projects were also being investigated and, in the coming weeks, the Government will be announcing the appraising of other investment opportunities in other sectors like the processing of white copra, cocoa products like cocoa powder and chocolate, and vanilla processing. Minister Maru said the Government was also looking at investing in major commercial rice farming and other agriculture investments.
“The Government will make investment decisions after the studies are done and we are given independent and competent advice whether to invest with the private sector in those ventures or not,” said Minister Maru.
“Each study will result in a prospectus which the Government can provide to potential investors who want to partner the Government to invest in the projects. The joint venture companies will be managed by the private sector,” he said.
Minister Maru added that the funding for the purchase of the equity in various projects will come from the State Equity Funding in the 2023 Development Budget.
