Manufacturing and Retail Distribution
September 27th, 2021
Manufacturing Sector Views 2022 with Renewed Sense of Optimism
The lessons of 2020 have made the sector somewhat more responsive and innovative.
INTERVIEW – TRINIDAD AND TOBAGO MANUFACTURING ASSOCIATION (TTMA)
As the third-largest contributor to Trinidad and Tobago’s Gross Domestic Product, the country’s manufacturing sector is important and dynamic but with the unfortunate occurrence of the COVID-19 pandemic, how has the sector taken the blow?
Impact of COVID-19
Trinidad and Tobago Manufacturers’ Association (TTMA) President, Tricia Coosal, has indicated that despite the significant COVID-19 challenges, the manufacturing industry was able to stabilise by the end of 2020. She said, “As of December 2020, Trinidad and Tobago’s non-energy exports took a hit, moving from TT$3.6B in 2019 to TT$3.3B in 2020, representing a 5% fall year on year.
We ended 2020 well considering many experts projected high double-digit losses for the year. In addition, when compared to other regional producers, who suffered on average 25% decline in production, Trinidad and Tobago’s non-energy producers fared fairly well.”
The President stated that the sector was still in recovery mode during the first quarter of 2021. This was supported by the Minister of Trade and Industry and the Minister of Finance who both indicated that there was growth in the first quarter of 2021 for the economy’s non-energy sector. However, with the surge in the number of COVID-positive cases and deaths in the second quarter of the year, this situation has once again threatened the stability which the manufacturing sector fought so hard to regain. But Coosal believes that the lessons of 2020 have made the sector somewhat more responsive and innovative as more companies invested in digitisation in 2020, retooled and re-engineered. “Once companies are able to continue operations and remain open, they would be sustainable even though the local and regional markets would likely become relatively sluggish,” she said. “The mere fact that the sector was able to pivot to produce $105M in Personal Protective Equipment (PPE) in 2020 to meet local demand is a testament to the resilience of the sector.”
As the number of COVID-positive cases rises in Trinidad and Tobago, what does Coosal see as the major challenges facing the industry moving into 2022? She said, “Presently, non-essentials are not allowed to operate. As such, this affects both local and export markets, which has created challenges for those who have contractual obligations and has introduced the possibility of losing market share to competitors. I firmly believe that regaining lost market share will likely be a major challenge moving into 2022.”
Taking the lead
Still, the President remains confident that in 2022 the non-energy manufacturing sector will take the lead in charting a course to put the economy on the right path of sustainable growth and economic development. How does the TTMA intend to do that? It has developed an Export Manufacturing Strategy and is working with the Ministry of Trade and Industry (MTI) and exporTT to put all the necessary pre-requisites in place to achieve its objective of doubling exports by 2025. They are seeking to have a trade facilitation office in Panama, similar to the one that exists in Cuba, to allow greater entry for exporters into the Central American Markets.
In April 2021, TTMA hired a consultant who is working with SMEs with the primary objective of creating opportunities for these operators, allowing them to prepare themselves for export markets and opportunities.
The TTMA is cognisant of the growth in some sectors that flourished during the COVID-19 pandemic in 2020 – production in PPE as well as the chemical sector and the creative industries sector. It is working with members in these areas, to get these companies export-ready via access to funding, certification and partnership with potential investors.
Another area of growth that the TTMA is promoting is the synergy for the country’s business operators. This entails working with local producers to have their products marketed through the local and regional supermarket chains. These large-scale operators are having challenges sourcing goods from the international arena to sell into their retail stores. The TTMA is also promoting the concept of local content for purchases by Government, by encouraging local producers to attain the standards and qualifications that will allow their goods to be attractive to purchasers, be it local, regional, or international.
Outlook for 2021/2022
So, what is Coosal’s outlook for the sector in 2021/2022? Coosal said, “To answer this question, one would have to appreciate what is happening at the macro level to manage the pandemic the world is experiencing. I believe as we continue to live and operate within the pandemic paradigm, challenges that are associated with such an environment would stymie the potential for growth of the non-energy manufacturing sector. If I am to put on my optimist’s hat and appreciate that there will be a proper vaccination framework in place, companies and people will continue to adhere to the protocols and practices to get us over this pandemic hurdle. I can see business operations re-stabilising possibly in 2022. Assuming that the measures the TTMA, MTI and exporTT are putting in place to create an enabling environment can be realised, 2022 can be viewed with a renewed sense of optimism and hope – with the view that Trinidad and Tobago, CARICOM and the world, will come to grips with the challenges of the COVID-19 pandemic.”
Production and Retail Distribution
The coronavirus pandemic has impacted many sectors but it has given the agribusiness (production and retail distribution) sector in Trinidad and Tobago a push as many persons are now encouraged to buy local.
As Nirmalla Debysingh-Persad, CEO of National Agricultural Marketing and Development Corporation (NAMDEVCO) pointed out, “The pandemic has obviously created more opportunities for the sector in terms of production.” She further explained that it has not created many opportunities for export. “Because of the importing countries’ labour issues and the outcome of the pandemic, we are not able to export as much as we could despite the increase in production, but, we have more persons eating local, we have more persons utilising local foods to substitute the ones they would normally eat of import status, so it (the pandemic) has positively impacted the sector.”
Additionally, with the closure of restaurants and fast-food outlets, people now spend more time preparing meals at home. “We are seeing an increase in the number of persons visiting our Farmers’, retail and wholesale markets” stated Debysingh-Persad. “We have not had any decline in the usership of the market. So, therein is an indication of our ability to continue to increase the demand for local foods.”
Debysingh-Persad further pointed out that due to the decline in imported items, there has also been an increase in the number of persons utilising value-added, local foods such as fresh-cut packs, juices and beverages.
So, what does the CEO foresee as the major challenges facing the industry moving into 2022? The availability of planting material has always been a challenge and with the continued closure of borders, the delay in time to get planting material can be one of the significant deterrents.
However, this is being dealt with to some extent. She related, “We have the Seed Bank Centre in Chaguaramas and we are working aggressively on making available to local farmers, seeds that are adaptable to our conditions for growth to ensure the continuity of production.”
The CEO also has high hopes for the sector for 2022. “We now have an increase in the amount of local produce on the supermarket shelves. Additionally, we are being reached out to by the Supermarket Association to get more packaged products of local content on their shelves.”
Now that buying local is on the rise, will the reopening of borders pose a threat? Debysingh-Persad does not anticipate this happening. “We do not know about the health and well-being of the foreign countries and their ability to produce mass amounts to be able to export. Further, there are challenges with prices, with shipping costs, et cetera.”
The CEO further pointed out that there is also a lot of regional demand for local foods and that is an opportunity that has not been tapped into just yet. “If you look at the market, the imports of CARICOM produce are at an all-time low, so therein leaves opportunity for our production base to be able to supply the CARICOM islands.”