10/06/2013 10:17

 

Prime Minister Peter O'Neill gives speech.

 

PM O'Neill's speech at a canning factory opening in Lae

Good morning and warm greetings to you all.   As I look around, I see a lot of familiar faces friends I have not seen for a while.

But let me first of all acknowledge the presence at this ceremony of:

Governor of Morobe Province Honourable Kelly Naru,

Minister for Fisheries Honourable Mao Zeming,

Other Honourable Members of Parliament,

Chairman and members of the National Fisheries Board,

Morobe Provincial Administrator,

Lord Mayor of Lae City,

Managing Director of the National Fisheries Authority,

Managing Director of the Investment Promotion Authority,

Departmental Heads and Delegates,

Members of the Diplomatic Corp and foreign dignitaries,

Directors of Majestic Seafoods Limited who are represented by Frabelle

Fishing Corporation and Century Canning Corporation of the Philippines and

Thai Union of Thailand,

Other distinguished guests ……………

SIGNIFICANT OCCASION

It gives me great pleasure to join you today as Guest of Honour for the Grand Opening of this new tuna canning factory by Majestic Seafoods Limited. It is a significant occasion marking the successful completion of the construction phase of a multi-million Kina investment project and the commencement of operations. This investment further underscores the belief and confidence our foreign investment community continue to have in our country as a credible and safe investment destination.

INVESTMENT OPPORTUNITIES

Since formation of the present government last August, I have repeatedly stated that there is no better time than the present to invest in our economy. The economic and political environment in PNG right now is attractive and conducive to invest in and participate in the development of Papua New Guinea. Our renewable and non-renewable resources sector, the extractive minerals and hydrocarbon industry, the manufacturing, retailing and construction sectors all offer attractive investment opportunities. I urge foreign investors and Papua New Guineans to partner together in exploiting these opportunities as we join hands in developing and modernizing our country.

STABILITY

Our government has established a stable and strong political environment – a pre-condition I believe is important to attracting foreign investment into PNG. Investors want to see an economy that is growing strongly – but one in which negative factors such as inflation and political risk factors are under control. Furthermore, the investment community also wants to be assured that fiscal management led by the budget is sound. Our gross domestic product growth in 2012 was just over 9 percent from 11.1 percent in 2011. This is strong growth by international standards.

Despite slowing down of construction phase of the PNG liquefied natural gas project, we expect the economy to maintain strength on the back of growth in the mining sector. The strong economic performance our country has enjoyed over the last decade is forecast to peak at a record 20 percent by 2015 when exports from the LNG sector will commence. A pleasing aspect of our positive economic performance up to this year and in the immediate future is that there will be continued growth in the construction, wholesaling and retail sectors. Another good indicator is that inflation has moderated significantly, down to 4 percent.

We will need to keep a careful watch on inflation in the coming years as the growth we expect and want to accelerate will be less beneficial if inflation is out of control. While there are some good indicators in our economy at present and in the medium term, we cannot discount challenges and potential threats. Our government is addressing social impact issues that are vital to harmony and cohesion of our communities such as better health care, free education, reducing crime, devolving decision making and implementation of development projects and services delivery to the district level.

LAW AND ORDER

Mega investments such as this tuna plant add value to the local economy of Lae and Morobe Province. They must flourish in an environment that is safe and without serious crime or law and order problems. Lae has its share of worrisome law and order problems brought on by increased population as a result of people movement, mainly from the highlands provinces to resettle in Lae. The occurrence of violent crime, general breakdown of law and order and rivalries between schools within the Lae City community must be stamped out. There is no place of crime, lawlessness and disorder in our communities. Our Government will do all in its power to apply the full force of the law to ensure good order is restored permanently in our nation’s foremost industrial city. In consultation with the police, Morobe provincial government and the Lae City Authority, our government will be announcing some crime prevention measures in the coming weeks. I urge all city and community leaders, responsible parents and all residents, including those in the settlement areas to cooperate and unite with the police to discourage lawless elements in our city to stop their bad ways. I urge parents and education authorities, including teachers in schools in the city to discourage school children from inter-school rivalries and cult worship. We have a blessed nation with opportunities for all citizens exploit gainfully. Good order is therefore the key to ensuring our citizens and foreign investment partners make maximum use of and gain beneficially the economic opportunities our nation offers.

MOODY’S RATING

A week ago the international ratings firm, Moody’s, rated PNG as stable with a favourable medium term economic outlook. Moody’s noted improvement in political stability. The ratings firm said institutional strengths improved while the government was showing improved track record of performance. It also noted that administrative capacity was bolstered by the government working with its development partners. It said fiscal discipline, low debt and benign inflation reflect gain in policy management. Moody’s added that while outlook was positive, PNG’s growth potential was constrained by poor infrastructure and law and order issues. I welcome this assessment of PNG’s state of affairs by Moody’s. I am pleased that Moody’s has noted some of the improvements on the political front, policy management, and the performance of our economy. I can only repeat that a stable political climate will improve our rating and attract investment that will grow the economy further and create more opportunities for our people. Our government is committed to that. Moody’s says poor infrastructure, law and order and corruption are areas we need to address, and that is precisely what we have been doing since we formed government last year. We have unveiled a massive infrastructure program and have begun to roll it out. We have started recruitment and training to increase police manpower to 10,000 by 2017. Our fight against corruption is ongoing, with the Task Force Sweep team doing an excellent job. The work of Task Force Sweep and the development of the Independent Commission Against Corruption laws are part of our government’s anti- corruption strategy that we approved as one of the first business of government after the 2012 general elections.

TUNA PLANT INVESTMENT

Having made those remarks let me say that this investment we are celebrating today is a welcome addition to the economic landscape of Lae, Morobe Province and to PNG as a whole. I am told this project cost US$30 million and has taken three (3) years to complete since the State Agreement was signed on 8th June 2010. Let me congratulate and thank the owners of the project namely; Frabelle Fishing Corporation, Century Canning Corporation and Thai Union for investing in PNG. As you are all aware, PNG owns close to 18% of the world tuna stock and our policy is to process all our tuna onshore to create employment and economic benefits for our people. This project will create close to 7,000 direct jobs and about 21,000 indirect jobs through the multiplier effect. This is a significant number of jobs and will immediately address the unemployment problem in Lae City. Once fully operational, the plant will process at a maximum capacity of 350 metric tons of tuna per day into canned tuna for export to the European Union market. The Project will benefit from the preferential market access to the European Union market under the Interim Economic Partnership Agreement we have signed with the European Union. That agreement allows our canned tuna and tuna loins to be exported to Europe duty and quota free. Other canned tuna exporting countries like Philippines and Thailand pay higher tariff rates to export to Europe. Therefore, it makes commercial sense for companies like Majestic Seafoods and others from Philippines and Thailand to invest in PNG. I also believe that this will contribute to furthering the implementation of key government policies as we continue to encourage foreign direct investments into the economy for the benefit of the industry and more importantly, the economy and people of Papua New Guinea.

FISHERIES SECTOR PERFORMANCE

I am reliably advised by the National Fisheries Authority that since 2008, total revenue generated from the fisheries sector has reached K500 million. This is a vote of confidence that renewable resource sectors such as fisheries are able to deliver. It is also a vote of confidence in the management of our fisheries sector by the National Fisheries Authority management since 2008. I also note with satisfaction that the NFA’s fisheries development outreach program for the provinces has taken off well with funding support by the NFA. NFA has provided to the provinces through provincial development grants K2m each to the 14 maritime provinces and K500,000 each to the seven highlands provinces in the 2013 fiscal year which well coincides with our Government’s commitment.

GRATITUDE TO LANDOWNERS

At this juncture,I would also like to thank the landowners for making land available for this investment. I note you also provided land for other investors like Nambawan Seafoods Limited, Donwong Industries, Halisheng Group and Cencon Packaging Limited. Furthermore, I would like to thank the Morobe Provincial Government under the leadership of Governor Kelly Naru, the former Governor Mr. Luther Wenge, Morobe Fisheries Authority and the Provincial Administration for the support given to this project. Without your support, this project would not have eventuated to this stage. Your undivided support has resulted in the completion of this major foreign direct investment project by Majestic Seafoods Limited. This fisheries investment project is billed as the largest of its kind in the Pacific region and will boost the profile of the fisheries sector in PNG. It will become the flagship project for PNG in its bid to be the tuna capital of the South Pacific.

CREDITING NFA

I also would like to acknowledge the support provided by the Board and Management of the National Fisheries Authority as well as other line agencies in their roles in facilitating for the investment by Majestic Seafoods Limited. I also recognize and commend other roles played by the NFA both at the national, sub-regional, regional and international fronts, especially in the sustainable management and conservation of our tuna stocks. As PNG focuses on implementing and achieving our broader development priorities as reflected in the overarching national priorities and commitments, I would like to encourage our investors to adhere to our investment policies in promoting indigenous participation. Our Government has tasked the Fisheries Ministry to focus on Small-to-Medium Scale coastal and inland fisheries development in the next five years. More specifically in ensuring that: (1) 2013 is the year of implementation and fisheries sector programs are fully implemented to transform and improve the lives of rural Papua New Guineans towards addressing issues of food security, income generation, employment creation, poverty reduction and alternative livelihoods; (2) With the industrial fishery being well developed, the focus must shift towards the development of coastal and inland fisheries where majority of Papua New Guineans live; and (3) On-shore fisheries facilities such as fish markets, wharves, jetties, cold storage facilities and fish auctions are developed.

CONCLUSION

It is my firm belief that with a stable government, a conducive business environment and enabling legislation and policies specifically in reaffirming the Downstream Processing Policy and Export Led Growth Strategy, Papua New Guinea will continue to attract foreign direct investment and increased volume of trade. With these concluding remarks, I wish to thank the hosts for inviting me and I look forward to performing the inauguration shortly.

Thank you