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Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
Table 4.1 Income Generation by Existing Tuna Processing Plants to PNG Economy, 2007-2010
Economic Benefit 2007 2008 2009 2010
DIRECT INCOME TO PNG ECONOMY
Government revenue 4,000,520 10,265,282 8,494,986 4,619,125
Employee's earnings 15,788,793 16,533,057 20,501,967 25,689,304
Net local purchases 13,180,595 12,822,304 15,013,651 13,280,028
Other economic contributions 2,412,453 4,017,384 4,409,139 3,214,926
TOTAL NET DIRECT INCOME 35,382,361 43,638,027 48,419,743 46,803,382
Production (mt/day) 260 220 230 250
Net direct income/mt 136,086 198,355 210,521 187,214
2007-2010 average/mt 183,044
Source: Consultants’ own analysis based on financial data provided by canneries, 2011.
Since 2007, the total net direct income generated from canned tuna and tuna loin processing has
generally increased, however this cannot be directly linked with global sourcing. This trend relates
largely to increased contributions from Frabelle, as its operations expanded annually since
establishment in 2006 to reach current processing levels of 70-80 mt/day. Also, employee earnings
have increased consistently in line with increases in the minimum wage rate. Contributions to
balance of payments and gross domestic product have also increased annually.
Table 4.2 presents estimates of projected income generation in the medium term (2011-2016). It
uses the four-year average (2007-2010) income generation per metric tonne of raw material
processed as a basis for estimates, together with projected increases in production, as new
processing investments come on-stream over the next five years.
Table 4.2 Projected Income Generation by Tuna Processing Plants to PNG Economy, 2011-2016
2011 2012 2013 2014 2015 2016
Production (mt/day) 280 350 400 570 640 730
Total net direct income 51,252,237 64,065,297 73,217,482 104,334,912 117,147,971 133,621,905
Source: Consultants’ own analysis based on production and financial data provided by canneries, 2011.
By 2016, the total net direct income generated by tuna processing operations into the PNG economy
could be in excess of K 130 million per year.
In addition, based on rough calculations using the available financial data, contributions to balance
of payment and gross domestic product could be in the order of K 650 million annually.
4.3 Employment Generation
Over the past five years, PNG’s tuna processing sector has generated between 6,400-7,400 direct
jobs annually (Table 4.3). In 2010, total direct employment was estimated at around 6,500 jobs.
Taking into account multiplier effects, additional employment is generated in businesses that
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