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Although smaller than its petroleum, mining and agricultural sectors, Papua New Guinea’s industry and manufacturing are major contributors to the nation’s revenue base, and hold significant potential for future investment and development. Manufacturers face several challenges, including high transportation, utilities and security costs, import dependency, currency depreciation, a foreign exchange shortage and land acquisition difficulties. However, the country benefits from a wealth of natural resources that holds considerable potential for value-added processing, most notably in the fisheries and agriculture segment. Long-term industrial development should also support investment in construction materials and petrochemicals, a crucial step in government efforts to reduce imports and build up a robust local production base. This chapter contains interviews with Paulus Ain, Commissioner and CEO, Independent Consumer and Competition Commission and James Lau, Managing Director, Rimbunan Hijau (PNG) Group.

Although it recorded double-digit expansion during the boom years of 2010 to 2013, Papua New Guinea’s construction industry faces a challenging operating environment in 2017. Growth contracted in 2014 following the completion of a major liquefied natural gas project, and contractors have since struggled to regain the momentum seen earlier in the decade. The sector rebounded in 2015 and 2016, with preparations for the 2015 Pacific Games and the APEC 2018 summit helping to maintain stability. Although the real estate industry is experiencing a downturn, a moderation of unsustainably high prices is expected to benefit long-term growth. Affordable housing also retains considerable potential for future expansion, and recent consumer sentiment surveys reveal pent-up demand for mid-market properties. This chapter contains an interview with Jason Yip, Managing Director, DAC Real Estate.

A challenging, disparate geography and low population density have created a unique set of issues for Papua New Guinea’s transport industry. Costs are high across all major modes of transport, and a lack of connectivity presents a serious challenge to doing business outside of Port Moresby. The country’s recent construction boom in the lead up to ExxonMobil’s $19bn liquefied natural gas project has not been as beneficial to public spending as initially anticipated, and budgetary shortfalls caused by low global commodities prices and a wider macroeconomic slowdown have significantly affected the delivery of planned new transport upgrades. As a result, public spending on transport is projected to further contract every year until 2021. This chapter contains an interview with Richard Yolo, Acting Managing Director, National Airports Corporation.

Papua New Guinea’s energy sector has undergone a dramatic transformation over the previous decades, with liquefied natural gas (LNG) becoming the sector’s biggest growth driver. The multibillion-dollar PNG LNG project is now operating well above nameplate capacity, and LNG export revenues are expected to remain a major pillar of the economy in the coming decades. Ongoing exploration activities will offer a clearer understanding of the country’s hydrocarbons reserves and further support plans to expand LNG production. Major international oil companies such as ExxonMobil and Total are looking to additional gas fields for new supply. This chapter contains interviews with Peter Botten, CEO, Oil Search and Andrew Barry, Managing Director, ExxonMobil PNG.

Commodity price fluctuations have rendered sporadic development across Papua New Guinea’s mining sector in recent years. Nevertheless, a diverse basket of minerals continues to attract international investors, who remain eager to unearth the nation’s resources, which have fuelled economic expansion. However, a lack of hard infrastructure and challenging natural conditions continue to escalate operating costs, which hampers revenue streams across the industry. Despite infrastructure drawbacks, mining continues to play a crucial role in the economy, contributing more than 34% of export revenues, according to figures from the Mineral Resources Authority. The sector registered impressive production numbers throughout 2016, following a weaker performance in 2015, which was characterised by a depressed commodities market and a temporary closure of one major mine. This chapter contains an interview Peter Graham, Managing Director and CEO, Ok Tedi Mining and Chairman, Kumul Minerals Holdings.

Insurance in Papua New Guinea remains a sector that offers significant opportunity. With a low penetration rate – estimated at under 2% – and the overall economy set for rapid growth as a result of ExxonMobil’s liquefied natural gas project, demand is projected to increase over time. Other trends and events also suggest good prospects. A new acting insurance commissioner has been appointed and is starting to push for increased and more effective oversight; banks have shown a growing interest in being more active in the sector; and much is being done to develop coverage for people and companies outside of urban centres. This chapter contains an interview Matthew Kearns, General Manager, QBE Insurance.