Eleven years after the Papua New Guinea government’s National Executive Council approved the scheme, the Pacific Marine Industrial Zone (PMIZ) in Madang Province has finally been launched, with local business leaders saying it will reduce freight costs, speed up transport and reduce congestion at Lae’s wharves.

This week’s launch ceremony for the PMIZ in Madang. Credit: Prime Minister’s Office PNG/Facebook.

Prime Minister Peter O’Neill launched the US$95 million construction phase of the PMIZ project this week, saying it will earn the country between US$2 billion and US$4 billion (K6 billion and K12 billion) a year, once fully developed, with Madang Province earning about US$6 million (K20 million) a year.

‘The project will bring with it 30,000 jobs,’ he said.

O’Neill said it was the Government’s aim to beat Thailand and the Philippines as the largest tuna processing and canning hub in the Asia-Pacific region.

‘The zone is not purely intended for canneries. This can cater to any value adding/on-shore processing companies and other relevant industries that can make use of the modern wharf and other infrastructures that will be set-up in the area.’

Onshore processing policy

Fisheries Minister Mao Zeming said at the opening the government will bring in a new policy next year, ‘where all fish caught in PNG waters must be processed on shore’.

Madang’s Industrial Zone plan. Artist’s impression.

He predicted the zone would be home to nine canneries by 2018.

Madang currently has one tuna cannery, owned by the Philippines’ company R D Tuna Canners, which sold the land for the zone to the PNG Government for K4 million.

Cost cutting

R D’s CEO, Pete Celso, has told Business Advantage PNG that the zone will allow businesses to centralise their logistics, and fast-track shipping.

‘The area is also intended to complement the currently overcrowded Lae wharves, considering that Madang is much nearer to the Highlands, where most of the agricultural products are coming from.

‘The zone, by the way, is not purely intended for canneries.

‘This can cater to any value adding/on-shore processing companies and other relevant industries that can make use of the modern wharf and other infrastructures that will be set up in the area.

R D Tuna Canners’ Pete Celso

‘Examples of these are products that can further be value-added, like coconut, cocoa, coffee, seaweeds and other marine products, wood products, and so on.

‘The idea is to create more economies of scale, thus enabling shipping companies to pick up more cargoes in one location and hence ultimately reducing the cost of freight.’

Community benefits

Prime Minister O’Neill says the PMIZ will generate ‘more than 20,000 jobs for local communities, through direct employment and the generation of small business.’

Trade Minister, Richard Maru, said last month that Oil Search Limited would provide power to the PMIZ, and Water PNG would provide water.

THE PACIFIC MARINE INDUSTRIAL ZONE PROJECT

Initiated: 2006 by the National Fisheries Authority and Fishing Industry Association.

Delayed: after legal challenges on environmental grounds, but actions withdrawn earlier this year

Size: 100 hectares for the industrial zone and 115 hectares for residential and commercial.

Funded by:  EXIM Bank of China (78%) on a concessional loan agreement, and PNG Government (22%).

Cost:  Total US$235 million. Phase one, Construction: US$95 million (K190 million).

Construction by: China Shenyang International Corp. Due for completion in November, 2016

Ownership: A joint venture between Kumul Consolidated Holdings and the Madang Provincial Government.