The Manufacturing sector in Vanuatu is relatively small and limited in scope in activities but have the potential to expand. Most of the operations are geared towards meeting the domestic demand and products currently in circulation include process goods, small boats, timber products and furniture, coconut oils and related products and medical and body products. Those products achieving sales to export markets include the downstream processed products of vanilla, spices and sandal wood oil.
The Manufacturing industry comprises the second highest share of the Industry sector at 40% according to GDP estimates of 2014 produced by the National Statistic Office. In terms of growth rate, the industry grew at an average rate of 12% with very strong fluctuations due to world prices. Between 2014 and 2013, Manufacturing sector grew marginally by 0.7% compared to the construction industry recording a growth rate of 10 % over the same period.
The Government is conscious of its very small and limited economic base with the services sector the key driver for the country's growth. For example, export of cocoa beans from 2013 and 2014 increased 35% from 326 to 441 tones. The Government sees the need for diversification, a results of which has seen the introduction of policies that support small-medium scale value addition industries.
Supporting and complementing its commitment to value-addition industries, the Government has provided duty exemptions on machines and parts related to processing of high value products for the domestic and export market.
Out look for this industry is bright and will continue to be as a result of a number of Government decisions and market demand for the country's niche products. The Government has been and remains strong with its decision to expand developments to its 80% population in its rural provinces. Tourism developments remain in Port Vila accounting 70-80 of all FDI developments. Recent studies revealed big hotels in the country import the majority of its fruits and vegetables and other food stuff.
Increased and quality production of local high value foods and products and ensure supply consistency presents excellent opportunity for this industry. Recent agreements between the Vanuatu Government and European Government have seen grants given by the European Government to improve to improve Vanuatu's 3 main productive products.
Investment opportunities in the Manufacturing sector include but not limited to:
- Production and processing dairy products
- Manufacture of footwear
- Processing of Vanuatu beef
- Manufacturing of animal feed and related livestock products
- Processing of local drinks such mangoe, pawpaw and other essential drinks
- Manufacture of oils