Lae: Papua New Guinea’s manufacturing hub


PNG’s second-largest city is the focal point for the nation’s downstream processing industries.

Although it plays second fiddle to the national capital Port Moresby, Lae in Morobe Province is PNG’s industrial capital and boasts considerable activity in manufacturing, trading, agribusiness and, more recently, fisheries.

Lae: the facts

  • Despite being the second city in a country of some six million, Lae has an official urban population of just 120,000 (2000 census)
  • It is situated on the Huon Gulf and is the capital of Morobe Province
  • Lae’s Nazdab Airport is a 30-to-40 minute drive from town
  • Lae is home to the well-regarded Papua New Guinea University of Technology (Unitech)

Many of PNG largest producers have their head offices here, including K K Kingston, Laga Industries, Mainland Holdings and (100 km away) Ramu Agri Industries. Local subsidiaries of international firms such as Nestlé, Coca-Cola Amatil, DuluxGroup and Japan’s PNG Taiheiyo Cement also call Lae home.

Local growth

Unsurprisingly, PNG’s recent economic boom, spearheaded by the PNG LNG project, has also had a considerable impact on Lae.

Perhaps the biggest recent driver of local growth has been Harmony Gold–Newcrest’s major new mining project at Hidden Valley, three hours drive from Lae and, to a lesser extent, the Ramu Nickel mine near Madang, from which significant benefits have flowed. One local business leader we spoke to has even greater hopes for the impact of the new Wafi-Golpu gold/copper project.

A major local fisheries sector has sprung up over the past decade, with major processing facilities constructed by Frabelle (Philippines) and International Food Corporation (Malaysia). The good times have also encouraged PNG’s larger manufacturers to make sizeable new investments in Lae, including S P Brewery and Lae Biscuit Company.

Story continues after advertisment...

With its central location, access to the Highlands and port facilities, Lae is a natural industrial hub. Nowadays, 60% to 70% of all PNG’s trade passes through Lae, including 90% of coffee exports.

Infrastructure challenges

Despite this, Lae is still beset by the kind of infrastructure challenges that are endemic in PNG. Its poorly-maintained urban roads have earned it the nickname ‘pothole city’, while congestion at PNG’s busiest port leads to perennial freight delays. It also shares the same security problems as Port Moresby, with its accessibility making it an obvious destination for itinerants from the Highlands.

A transport hub

  • Geographically central
  • PNG’s largest port facilities
  • PNG’s major road hub, located at the start of the Highlands Highway that links the heavily populated Highlands area to the coast
  • Regular flights to Port Moresby and other domestic centres

There is some good news on the infrastructure front, however. A major initiative to improve the city’s roads commenced in 2011. While it is yet to be completed, progress has clearly been made.

Early work has also begun on the long-awaited Lae Tidal Basin Project to expand the port.

This article first published in Made in PNG 2012

Leave a Reply