Going for Growth - Opportunities Abound

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MORE THAN 40 new entities
have joined the Jamaica
Manufacturers’Association
(JMA) in the past year and its vice-president,
Metry Seaga, believes this is testimony to
a much-improved environment for doing
business locally.
“There are many large companies that
are investing heavily – LASCO, WISYNCO,
Red Stripe, just to name a few. However,
the most encouraging part for me is that
we have had over 40 new members this
year, all small and micro manufacturers,
with new creative ideas, new products, and
that is where the real growth is going to
come from,” said Seaga.
Based on a growth agenda document
tabled in Parliament by Finance Minister
Dr Peter Phillips, the manufacturing sector
is projected to experience a one per cent
growth in 2015/16, and a 1.9 per cent
growth by 2017/18. The sector employs an
average of 73,000 people.
Seaga said many of the medium, small
and micro enterprise players in the sector
are new and that they come with innova-
tive ideas and products.
According to the JMA second in com-
mand, in addition to the prudent fiscal
management which has been demonstrated
by the Government, “Jamaicans have a
great entrepreneurial spirit” and this is
reflected in the attitude of many
manufacturers.
“The potential for the sector is very pos-
itive. There are challenges, no doubt about
that, but if we stay on the right track, if we
continue to keep the fiscal responsibility
that we have shown, and if we are able to
fix the energy problem and implement
meaningful tax reform and change up the
procurement policy, we will see the growth
coming,” said Seaga.
He added that while the government’s
economic programme has been key to stim-
ulating renewed hope in the manufacturing
sector, the efforts of reform will come to
nought if there is no growth in the economy.
Anthony Hylton, the minister of
industry, investment and commerce, has
pointed to several signs in the private
sector which he says is testimony to the
fact that the sector is on the rebound
and approaching brighter days.
According to Hylton, Red Stripe’s $750-
million investment in implementing a
combined heat and power plant at its
Spanish Town Road location, in addition to
US$10 million being invested over the
next five years to set up a cassava supply
chain, speaks volume about the future for
manufacturing.
ONGOING CONSTRUCTION
In addition, the minister pointed to
LASCO’s ongoing construction of its facil-
ities, which includes investment of more
than $2 billion to upgrade and expand its
plant at White Marl, as testament to
brighter days for manufacturing.
Jamaica’s manufacturing sector is said to
be re-emerging thanks mainly to reform in
the tax environment that makes it possible
for entities to reduce tax liabilities from
33.3 per cent to 17 per cent.
“The tax regime is quite friendly to
them, they are 25 per cent and if they pay
their statutory deductions on time and take
advantage of employment tax credit, they
can get that down to 17 per cent,” said
Richard Byles, chairman of one of the
leading manufacturers – Red Stripe.
Prior to 2013, entities were taxed at 33.3
per cent but this was lowered to 25 per
cent with the passage of the Omnibus Tax
Incentives Act.
Byles also said that with a reduction in
energy prices, it is cheaper for manufactur-
ers to do business, arguing “that is a big
thing because a lot of manufacturers use
tremendous amount of power. It is big
money for many manufacturers”.
The Red Stripe chairman, who also co-
chairs the Economic Programme Oversight
Committee, said, “I am looking for manu-
facturing to grow in the economy in 2015.
I think that all the fallout that we have had
should be done and we will bounce back,”
he added.
14 GOING FOR GROWTH FEATURE | 15 THURSDAY, MAY 7, 2015
Metry Seaga
FILE PHOTOS
(From left) Lascelles Chin, chairman and CEO of the LASCO Group, Prime Minister Portia Simpson Miller, Anthony
Hylton, minister of industry, investment and commerce; and Dr Eileen Chin, then managing director of LASCO
Manufacturing, breaking ground for LASCO’s new factory at White Marl in St Catherine in 2012.
INVESTMENT OPPORTUNITIES
AGRO-PROCESSING Beverages, fruit jams, jellies, preserves, liqueurs and confectionery.
SAUCES, CONDIMENTS In 2013, world trade of sauces, condiments and
AND SEASONINGS seasonings was valued at US$10.7b, while Jamaica’s imports
were valued at US$16.9m and exports valued at US$16.3m
(0.15% of world exports).
DRY PACK FOODS AND In particular, ready-to-prepare meals.
FROZEN FOODS
BAKED PRODUCTS In 2013, world trade of baked products was valued at US$30.3b.
CARICOM exported US$44.9m (0.1% of world share) of which
Jamaica was $12.4m. CARICOM imports amounted to US$166.3m.
PACKAGING AND LABELLING In 2013, Jamaica imported over US$72m worth of plastic packaging
& TOILET PAPER and labels, and approximately US$31m in toilet paper.
ESSENTIAL OILS AND Jamaica imported US$39.5m worth of essential oils and cosmetics
COSMETICS in 2013.
MEDICAL DEVICES According to global market research firm Markets and Markets, the
medical devices industry is expected to grow to $228b by 2015. The
opportunities in this area include medical disposables and medical
equipment.
NUTRACEUTICALS Studies from the Scientific Research Council show that 85% of
the world’s best-selling nutraceutical products contain plants that are
grown locally.
MEDICINAL GANJA INDUSTRY The value of the global medical ganja market is estimated at over
US$140 billion and in the USA the estimated value is US$2.5 billion.
The USA also imported over US$2 billion in hemp products in 2011.
BAMBOO INDUSTRY World demand for bamboo products is valued at US$10 billion and
based on a Chinese study, this is expected to reach US$20 billion by
2015.
TOURISM INPUTS Furniture and wooden products; leisurewear and uniforms; souvenirs
and craft; toiletries and spa
products and chemicals and
cleaning products.
The manufacturing sector is poised for growth. Let
us all champion the manufacturing cause and
“Buy Jamaican ... Build Jamaica”.
‘THERE ARE CHALLENGES, NO DOUBT ABOUT THAT, BUT IFWE STAY ON
THE RIGHT TRACK ... WE WILL SEE THE GROWTH COMING’ – SEAGA
MAKEWAYFOR
GROWTH
TOP: Symbolic groundbreaking of the cassava-processing
plant being constructed at the Red Stripe complex, in
2014.
Right: Co-chairman of the Economic Programme
Oversight Committee, Richard Byles
‘I AM LOOKING FOR MANUFACTURING TO GROW IN
THE ECONOMY IN 2015. I THINK THAT ALL THE
FALLOUT THAT WE HAVE HAD SHOULD BE DONE AND
WE WILL BOUNCE BACK’ – BYLES