Manufacturing and Retail Distribution
October 28th, 2022
Road to Recovery
Looking inward to CARICOM and solidifying our existing trade relationships we may be able to mitigate the impact to stabilise, strengthen and grow despite international constraining factors.
A journey of a thousand miles begins with the first step and last year 2021, Trinidad and Tobago took its first step on the road to pandemic recovery with its mass vaccination campaign, ‘Vaccinate to Operate.’ From that point to now, a few other obstacles have been tossed along the path. Two key ones have been the global supply chain problems and fallout from the war in Ukraine. Still, Trinidad and Tobago is bravely stepping forward as a nation and working to rebuild essential parts of its local economy that bore the brunt of the pandemic issues. Stepping in the right direction is reason enough to have a positive outlook and to be cheerful about the future of business and the economy.
The Central Bank of Trinidad and Tobago (the Bank) gives us grounds for optimism. A recent publication of the Bank’s showed increase in productivity in the non-energy sector for the first three quarters of 2021. This position was further supported by the Minister of Finance pronouncement in the 2022 Mid-Term Budget Report, where he highlighted the increase in the Gross Domestic Product (GDP) is a result of significant positive movement of a number of sectors of the economy, including the non-energy manufacturing sector to surpass pre-pandemic levels.
Of course, a certain level of proactiveness is required to progress the journey along the path and too, an essential, to make it pleasant. To these ends, the Trinidad and Tobago Manufacturing Association (TTMA) intensified its efforts to open and solidify new markets for the manufacturing sector via our trade missions, particularly within the CARICOM community. We believe that by looking inward to CARICOM and solidifying our existing trade relationships we may be able to mitigate the impact to stabilise, strengthen and grow despite international constraining factors. In 2022, we have already hosted trade missions to Guyana and Suriname and others are planned, some in collaboration with exporTT. Additionally, the TTMA hosted its annual Trade and Investment Convention (TIC), live again, after a two-year break, from 25–27 August 2022. The face-to-face meetings of business interests again generated meaningful investment opportunities for participating parties.
The Government’s extension of the Foreign Exchange Facility at EXIMBANK in the 2022 has also allowed us to be optimistic about realising our objective to double non-energy exports in five years. The facility made available by the Ministry of Finance has given businesses access to funds to buy foreign goods and services. Certainly, the capacity of our human resources is a top priority.
As such, our team has put in place several agreements with training institutions such as The UWI, MIC Institute of Technology (MIC-IT) and the Ministry of Trade to identify and close skill gaps in the job market. We have no doubt that the road to economic recovery is a long one, but at the TTMA we believe that we have the right combination of strategy and partnership to see us through all the miles that lie ahead.
A hub of investment opportunities
Trinidad and Tobago’s manufacturing sector is the largest in the English-speaking Caribbean, and the largest sector of the national economy based on its share of GDP. As Trinidad and Tobago’s Investment Promotion Agency (IPA) aligned to the Ministry of Trade and Industry, InvesTT focuses on key non-energy sectors such as Energy Intensive Manufacturing, Maritime Services, Logistics and Distribution and Business Process Outsourcing (BPO). According to Franka Costelloe, Chairman, InvesTT, there are many reasons to invest in the local manufacturing sector.
Recovery in investment
Costelloe shares how InvesTT fared, “Eleven (11) investments closed in 2021 at TT$135 million, nearly returning to the pre-pandemic figure in 2019 of TT$143.5 million. In 2022 it is anticipated that the rethinking around route to market strategies due to supply chain disruption coupled with the added focus on implementation of infrastructure investment stimulus remain key points driving rejuvenated interest in the Caribbean and South America. The important risks to be mindful of include labour demand, supply chain bottlenecks, the energy crisis and inflationary pressures that will also affect results.”
While there is normally a time lag between economic recovery and recovery of new investments, Costelloe states, “InvesTT can say that we are at the end of the third quarter of our financial year and that we stand at a Total Investment Value of TT$356.1 million to date. The message is that InvesTT is well on the road to surpassing the FY target of TT$230 million, which was a 70% increase on the previous year’s target. Further to that, it has been a pleasure to see the cross-section of geographies, industries and business sectors being facilitated at InvesTT – Maritime, Manufacturing, Logistics, Agro-Processing, Tourism, BPO companies, Call Centres and investments that range in size from $1 million all the way up to $265 million and they all get the same essence of importance.”
Why invest in manufacturing?
Trinidad and Tobago’s robust logistics infrastructure, supported by numerous bi-lateral and multi-lateral trade agreements have created avenues for manufacturers seeking to access new markets. Additionally, local amenable energy costs – facilitated by the hydrocarbon industry – significantly boost the capacity of manufacturers to offer competitively priced products for export. Geographically situated between the Americas, Trinidad and Tobago has a strategic export and supplier network location. At the southern-most end of the Caribbean archipelago, the threat of operational downtime for businesses is minimised during the region’s annual hurricane season.
With two major seaports for sea freight (Port of Port of Spain and Port of Point Lisas) and one major airport for air freight (Piarco International Airport), there are several routes for importing raw materials and exporting finished goods. There is also ease of access to modern industrial estate opportunities such as e TecK’s Phoenix Park Industrial Estate and the Tamana InTech Park.
Investment opportunities in manufacturing
There are numerous gas-based downstream manufacturing opportunities such as Liquefied Natural Gas; Alternative Fuels & Fuel Additives — CNG, Petrochemicals for Fuels (eg: flex fuels), DME; Metals Processing —Aluminium; Downstream Methanol — DME and Plastics; Downstream Ammonia — Urea, Fertiliser Applications; Inorganic Chemicals; and Biochemicals – Natural Gas to Protein. Trinidad and Tobago is also positioned to become a manufacturing centre for renewable energy components for the solar and wind energy industries to support growing demand in the Caribbean and the Americas. Other sustainable energy manufacturing opportunities include Renewable Energy Electricity Generation, Green hydrogen and green chemicals and Energy Storage — Battery Assembly. In the food and beverage sector options exist for the manufacturing of prepared food stuff, beverages, and spirits and there are also possibilities in Pulp and Paper Manufacturing.
New horizons for investment
“The real estate option stretches in Trinidad all the way from Phoenix Park, Moruga, Tamana and estates that are outside of e TecK’s purview as well, all the way to Tobago. We have also built a very strong relationship with the new Tobago House of Assembly, Chief Secretary, The Honourable Farley Chavez Augustine, who is exceptionally passionate about growing business in Tobago and having a one-on-one relationship with local and foreign investors. There is a lot of energy on the InvesTT Board and amongst the InvesTT executives to build on this new momentum coming out of the Covid-19 drop that we saw in 2020.”
Costelloe looks forward to future developments, “We are enthusiastic about the merger with exporTT – we see this as added resources and collaboration to hit all time higher numbers to stretch our targets.” These recent measures by the Ministry of Trade and Industry to establish a Trade and Investment Promotion Agency in Trinidad and Tobago, merging several state agencies, will create an enabling environment giving the local manufacturing sector a much-needed boost.
Article by: Natalie Dookie