“Jamaica Trade Desk News” Theme: Strategic alliances to leverage growth! Contact us at (868) 675-8862 Ext. 239 M O N T H L Y
P U B L I C A T I O N
Email: tradeassist@ttma.com I S S U E
8 –
O C T O B E R
2 0 1 3
President & CEO of the Canadian Manufacturers and Exporters (CME) advises T&T’s manufacturers : compete on quality & innovation!
HIGHLIGHT THE IMPORTANCE OF STRATEGIC PARTNERSHIPS: TTMA welcomed the President & CEO of
Jayson Myers, CME CEO & President, Canadian sharing lessons from the Canadian experience during the President’s Dinner at the Hilton Trinidad and Conference centre......
the CME... INSIDE THIS ISSUE:
Establishing smart alliances and bringing on labour! Building strategic alliances: the right way to compete !
2
Partnership driven 3 solutions: Labour in T&T’s manufacturing sector... The implementation of a regional model to address labour challenges.
4
ExporTT visits to Jamaica...
5
The 1st Export 5 Development Forum!
Upcoming event in the French Caribbean!... Don’t miss it!
6
Contact JA-T&T Trade Facilitation Desk TODAY!
7
Businesses in Trinidad & Tobago must adapt and focus on innovation, in order to compete on an international level. That‟s the advice of Canadian Manufacturers & Exporters President and CEO Dr. Jayson Myers, who gave the feature address at the Trinidad and Tobago Manufacturers‟ Association‟s President‟s dinner. The event took place on Wednesday 23rd October, 2013, at the Hilton Trinidad. Dr. Myers noted that local manufacturers need larger markets to be competitive and succeed. “Canada is a small economy. For a huge country, we‟re actually divided up, as you know, into regional markets. We‟ve got a fairly small population compared to the United States, and here we were going into a free trade agreement with the United States, and we signed that free trade agreement in 1989,” he said. “Between 1990 and 2002, manufacturing more than doubled. We couldn‟t have done that without the free trade agreement. The reason was you need a large market if you’re going to specialise. You need a large market if you’re going to succeed and take advantage of opportunities. You need a large market to achieve the economies of scale that are going to make you competitive.” Dr. Myers said manufacturers today compete in a global market with China and other developed economies that can outcompete locals on price and volume. He advised manufacturers to see their business as providing solutions that customers need. “You can‟t compete on product and price alone. You have to compete on quality and innovation,” he said.
Minister of Trade, Industry & Investment, Vasant Bharath highlighted the critical role this country‟s manufacturing sector plays in the economy, noting that it is the second largest non petroleum sector. Minister Bharath noted that while the sector recorded a contraction of 0.4 per cent in 2012, it is expected to rebound, with growth estimated at 6.1 per cent in 2013. “The contribution to GDP of the manufacturing sector is projected to increase to 9.2 per cent in 2013, up from 8.8 per cent in 2012.” Minister Bharath assured TTMA members that his Ministry will continue to work with the TTMA to “remove all hindrances to doing business in Trinidad and Tobago and overcome those obstacles that hinder the growth of our non-energy sector”. “To date, Trinidad & Tobago exports more than 80 per cent of Caricom‟s foreign trade and accounts for about 80 per cent of all intra-regional exports. To further increase this figure, arising from the proactive lobbying of the TTMA, Government has made provisions to improve the efficiency of the VAT refund system”, Minister Bharath said. “As an initial step in simplifying the VAT refund process for the manufacturing sector, the Government has made provision in the 2014 Budget statement and $1 billion has been allocated for all outstanding VAT refunds, with a view to ensuring that all future VAT refunds are made within the stipulated legal timeframe. “The Government will remove the VAT on all imported items of raw materials that goes into the manufacturing process.” TTMA President, Nicholas Lok Jack praised manufacturers for driving the economy in the last two years. He noted, however, that business people must be aware of the current challenges, including a slowdown in demand for locally produced goods in the Caricom market. “Manufacturers must move nimbly and quickly to access extra-regional markets,” he stated. “To compete in these markets, however, we must drastically reduce our cost base. To do this, we must improve our productivity at the firm level, at the agency level, and at the country level.” Article written by Ms. Julie Ramlal- TTMA Marketing, Communications & Events Manager. Email: marketing@ttma.com
PAGE
2
Building strategic alliances: The right way to compete in the 21st century! Today‟s unpredictable economy causes several successfully assertive leaders to refocus resources on their core business functions and markets. Nevertheless, focusing exclusively on core business activities and competencies has a serious risk. In fact, companies become unwilling to invest in new products or services, new markets or new processes, often leading to sharp decline in revenue and profitability. In order to prevent this negative effect, forward-looking leaders are seeking to establish new alliances. It is understood that before you jump into an alliance, you need to bear in mind that between 50 to 70 per cent of all alliances usually fall apart, most within the first two to three years. All-too-enthusiastic partners don‟t automatically have the shared knowledge and skills of what is involved in successfully establishing and maintaining an effective and sustainable alliance. To significantly amplify the short- and long-term effectiveness of an alliance, there is a need to ensure the following: To begin with, it is key to conduct an initial analysis that reassesses your customers‟ needs, requirements, and expectations. This is critical to the success of any business. In addition, it is important to redefine the emerging market opportunities for your products and services; the competitive landscape with but also without and alliance partner; and, to realize a truthful evaluation of your company‟s strengths and weaknesses (SWOT analysis). There is no doubt that it‟s essential to perform the same timely and meticulous analyses on your potential alliance partners. Secondly, you need to clearly identify the business metrics that both companies will use and how these will be gathered, analyzed and interpreted. While growing revenues and profits is a universally shared key objective, others are just as vital, such as improving market competitiveness
through market access, enhancing the innovative performance of firms and increasing competitive advantage. Thirdly, ensure that all key players or main stakeholders provide active and effective support. Bear in mind that in addition to the most senior executives of the firms, middle managers “Team Leader” must be briefed on the “raison d'être” for establishing a strategic alliance, so that they can play a fundamental role in its rollout, by tracking and measuring the productivity growth. The clients and existing partners should be engaged in this process as well, as they might be uncomfortable with your new alliance. Since all alliances go through growing stress and problems, take time to discuss with the leadership teams to identify those best practices that are most likely to impede the success of the alliance. For example, many partnerships involve sharing of customer/client personal information. As a result, both you and your ally necessitate having processes for collecting, analyzing, sharing, storing and discarding information that protects customer/client privacy. As in any relationship, strategically partners are expected to experience some degree of tension and anxiety as their partnership progresses to new levels. In this case, there are intermediary organizations available to assist the parties refocus their energy. It is apparent that regardless of the industry or type of business that you are into, strategic alliances are the best way for your company to compete and succeed in today‟s fast-moving and networked economy. However, forging a strategic alliance and making it work are not easy exercises, as partnering well is a key core competence that needs to be developed. Invest your time and efforts wisely!!! Article by Naika Pichi-Ayers– TTMA Trade Desk Officer, Jamaica-T&T Trade Facilitation Desk. Email: tradeassist@ttma.com
PAGE
3
Partnership driven solutions: Labour in T&T’s manufacturing … Research has shown that manufacturing has a large impact on job creation, both direct and indirect, and it is estimated to sustain about 66 secondary jobs per 100 direct manufacturing jobs, across all skills levels. It is undeniable that manufacturing activities provide inputs to other sectors of the economy and satisfy a broad range of final and intermediate demands. High value-added manufacturing, in particular, is a key driver of innovation and technological advance. It increases opportunities for attracting and embedding R&D activities, collaboration with the higher education sector and stimulating networks.
tic relations between all key players as this is a national problem that must be given strategic attention. In July 2013, TTMA signed a Memorandum of Understanding (MoU) with the Ministry of Tertiary Education and Skills Training (MTEST). The MoU will specifically ensure that TTMA‟s member companies work with the Ministry and the National Training Agency (NTA) to design apprenticeship programs that meet the needs of industry. Other initiatives that the TTMA will work with NTA to highlight to members include the NTA‟s Workforce Assessment Centers; On the Job Training Programmme and their Career Coach. It is intended that by working in conjunction with the TTMA the work of the NTA and other training providers will neatly coincide with actual industry needs.
The latest Central Statistical Office data for T&T showed a declining unemployment rate from 5.4 per cent in Q1 2012 to 4.9 per cent in Q2 2012. Significant decreases in the size of the labour force specific to manufacturing were also noted, with craft and related workers falling by 8.5 per cent or 8,500 persons; and plant and machine operators and assemblers falling by 6.0% or 3,400 persons, suggesting people are leaving the sector to seek employment in other fields.
TTMA also entered into a strategic partnership with the trade association representing the Canadian Manufacturers & Exporters (CME) with the aim to promote mutually advantageous commercial and industrial interests to generate economic benefits for both parties. An MoU was signed in October 2013 with a core deliverable being collaboration on projects and initiatives with respect to human resource and productivity development.
Figure 1 Employment in T&T’s manufacturing sector 2011/2012
Figure 1 offers a snap shot of employment in the manufacturing sector as collated by the Central Bank of T&T. According to this data, T&T‟s manufacturing sector is faced with an interesting conundrum – national labour figures show that the unemployment level is declining however the ability of manufacturers to source and retain labour at globally competitive levels of productivity is a persistent problem. Trinidad and Tobago‟s manufacturing community sits in a questionable position due to a creeping inability to have labour demand coincide positively with labour supply. The specific problems that manufacturers face are with respect to retention of labour and ensuring the requisite level of training of hired labour. In light of the aforementioned constraints faced by local manufacturers, the Trinidad and Tobago Manufacturers‟ Association (TTMA) is attempting to stimulate synergis-
“In the long run the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate.”- Adam Smith. The TTMA aims to work with members to ensure that the relationship referenced by Adam Smith maintains prominence within all local manufacturing businesses. The association acknowledges that our human resources are the key to business success and the local manufacturing sector respects the poignant role of labour in the value creation activities of our business. Nicholas Lok Jack, TTMA‟s President hit the nail on the head when he explained that industry must ensure that workers are valued and that workers in turn value their jobs, “I think we need to get back to basics. People need to value their jobs. Keeping people is just a manifestation of the shortage we have in the labour system. People have a million options and so they do what suits them best and can walk out of a job today and on to a new job. If people valued their job and what they did that would take care of that problem. It‟s a long term process and we need to have vision and I hope we don‟t have to go through a bad catalyst like in the eighties for people to get a sense of what is valuable.” Contribution from Ms. Giselle Roberts– TTMA Team Lead, Business Development. Email: membership@ttma.com
PAGE
4
The implementation of an effective regional model to address labor challenges in the Caribbean...
The issue of labour shortage remains one of the single largest challenges facing the Trinidad and Tobago (T&T) economy. Despite an unemployment rate of 4.9% in T&T, indicative of full employment, the business sector is plagued by a shortage of labour which continues to hinder its productivity. The affected sectors include the fast food, agricultural, retail, entertainment and manufacturing sectors. Data from the Central Statistical Office suggests that persons are leaving these sectors to seek employment in other fields. Coupled with this issue is the concern of by a growing skills gap between education and employment 40% of firms in critical sectors that drive the T&T economy view „skills gap‟ as a major developmental constraint. Furthermore, statistics indicate that despite the 7000 graduates that leave the tertiary education system each year, there continues to be a widening of the skills gap. A similar situation is apparent in the Jamaican economy. According to the Statistical Institute of Jamaica (STATIN), Jamaica‟s unemployment rate for April 2013 is 16.3%, the highest in more than a decade. In particular, unemployment among youths constitutes 38.5%, up 34.1% from 2012. The figures are indicative of despair felt across the country by persons seeking work, despite an increase in the labour force in 2012. The incremental increase in the unemployment rate was caused by an additional 38,900 (3%) new entrants into the labour force, of which only 8,700 found employment – resulting in 30,200 persons (16.3%) being unemployed. Additionally, the data shows that plant and machine workers and assemblers experienced the largest decline in workers dropping by 4,300 persons, while the overall manufacturing sector declined by 7,200 persons (9.2%). Despite the collective efforts of our respective governments, the data presented above make it abundantly clear that unemployment remains pervasive in Jamaica and the skills gap (along with under-employment) characterizes T&T‟s labour maket. The essence of the Regional Model In this context and given the imperfections inherent in our public sector human resource development mechanisms, it may be expedient for the regional business community to develop what is being loosely described here as a model to enhance the supply and satisfy the demand for labour. It should be constructed in such a way that it can be applied
to the specific labour market conditions in T&T and Jamaica (and by extension the wider Caribbean). Germane to this model and, with specific reference to the supply of productive labour, would be factors such as wage rates, education, training, the number of persons comprising the overall labour force, working hours, the nature of job contractual arrangements etc. On the other hand, the demand for labour would be a function of the size of firms, the capital intensity, the cost of labour (including the minimum wage, where applicable), the nature of output (whether goods, or services, or a combination of both), the company‟s revenue projections, etc. The model‟s creation can be facilitated by the formation of a sample of manufacturers from both countries to gather the data using an appropriate survey methodology. The beauty of creating such a model, assuming the availability of data to manipulate it, is that users of it can evaluate the impact of changes to any of the factors that comprise the model on labour demand and supply. Once this is done, one can then assess whether demand outstrips supply or vice versa, which can in turn be used to inform government policy insofar as it pertains specifically to the labour market conditions of the business sector. This model can provide a sound empirical basis for the free movement of labour between both countries. This brings into focus the matter of the Caricom Single Market and Economy. Fundamental to the CSME development thus far has been the movement of factors of production. While there has been much discussion on this aspect of the integration framework, it has not gained sufficient momentum to be described as being fully fledged free movement. The position taken in this article is therefore that the business community can work towards showing the benefits of cooperation among our island states towards overall labour development, with redounding effects on our Gross Domestic Product and economic growth. Of course the counter argument can be made that the data may suggest that such cooperation can compound the problem and make unemployment a regional headache; nevertheless the private sector, forever defined by the profit motive and its self regulating nature, will smoothen over any such complications if allowed the latitude to operate fully in a regional space. It has long been held that labour and capital are critical to the economic expansion of any country. If we can solve the labour component of this equation, a solution to our development challenges will be within closer proximity. Contribution from Mr. Marc Sandy– TTMA Research Officer, Business Development & Ms. Arianne Phillips - TTMA Trade Research Officer (Respective emails: research@ttma.com / researchdesk@ttma.com
PAGE
5
exporTT visits to Jamaica... exporTT Limited is the national export facilitation organization of Trinidad and Tobago. Its mandate is to: Generate export growth and diversification in the goods and services sectors; Increase the international competitiveness of exporters; Develop new exporters across the various sectors of interest; Expand to new markets, based on market research. As the trade policy implementing agency of the Ministry of Trade, Industry and Investment (MTII), exporTT provides a comprehensive range of services to exporters through its core activities of: Building export capacity, Providing market access, Creating an enabling environment for exports, and Harnessing the differentiating factors that give Trinidad and Tobago a competitive advantage in global market place. Its market access activities include: Researching and Exploring new markets; Promoting T&T‟s products and services, using webbased technologies and internationally; Leveraging the Caribbean Diaspora; Facilitating market entry through co-financing. exporTT’s role is to assist the Government of the Republic of Trinidad and Tobago (GORTT) in diversifying its export base leading towards a secure and sustainable future
for Trinidad and Tobago businesses. The company continues to take on board feedback received from clients and stakeholders in charting its way forward. The company welcomes enquiries from international buyers and is ready to provide information and advice on doing business with Trinidad and Tobago. As part of Researching and Exploring new markets, the company has planned a Market Survey Mission to Jamaica from November 04 to 10, 2013. Working closely with Dr. Noel Watson of AZ Information Jamaica Limited, a team of two exporTT Officers- Mr. Nigel Lutchman and Ms. Roann David, will be visiting a number of Government Agencies and Jamaican businesses, with the view of collecting information of relevance to aiding business relationships between both nations. The end objective will be to disseminate information to T&T‟s exporters on their return through seminars and information on the company‟s web presence- www.exportt.co.tt. Ideally, it is hoped the Market Survey will result in furthering business relationships between Trinidad & Tobago and Jamaica, as we seek the broader vision of economic development within the region. An article written by the Export Goods Unit at exporTT Limited. For further clarifications, please feel free to contact Mr. Nigel Lutchman- Export Officer at: (868) 623-5507 Ext. 235. Email: nlutchman@exportt.co.tt
Export Development Forum 2013… From October 29th-30th, 2013, exporTT held the 1st edition of the Export Development Forum (EDF), an interactive platform which was designed to encourage discussions focused on the sharing of best practices and focusing on the growth and development of the services export sector. During two days, international and local experts, trade institutions, regulatory agencies, exporters, business supports organizations were brought together, to share deep insights on practical and working strategies in order to encourage successful export development. The short presentations and the panel discussions on issues such as maximizing existing trade agreements, global value chains and overcoming non-tariff barriers, while discussing opportunities to increase and diversify exports into traditional and non-traditional markets gave the forum a unique structure, in which participants gained timely information and useful resources. The Jamaica-T&T Trade Facilitation Desk/TTMA is taking this opportunity to congratulate once again exporTT for putting together a useful event where everyone could learn from others expertise and experience, and network. For more information log go on to: www.edftt.com or contact exporTT at (868) 623 5507/ Email: edf@exportt.co.tt
PAGE
6
Save the date for the 1st Investor’s Conference! “Martinique: a market to explore...”
If you require information on the 1st Investors’ Conference, kindly contact the Regional Council of Martinique at: martiniqueinvest@gmail.com or check the website.
PAGE
7
Snapshots... TTMA successful President’s Dinner! Photo 1: Nicholas Lok Jack, TTMA President took the opportunity to connect with members of the business community to discuss potential business opportunities that exist between T&T and Canada . Photo 2: Minister Vasant Bharath, Ministry of Trade, Industry and Investment advises the manufacturing sector on the CaricomCanada trade agreement and present negotiations. Photo 3: (from left to right) Mr. Suresh Sookoo, CEO– RBC Caribbean Banking, Mr. Nicholas Lok Jack TTMA President, Dr. Jayson Mayers, CEO & President of the Canadian Manufacturers & Exporters, Minister the Honourable Vasant Bharath, Minsiter of Trade, Industry & Investment, Mr. Gerard Latulippe Canadian High Commissioner, Mr. Charles Percy, Managing Director and CEO of Methanex Trinidad Ltd. Photo 4: Nearly 400 guests attended the President’s Dinner. Photo 5: The hard-working staff of the TTMA posing for a group photo. “Heartfelt thanks on behalf of the President, the Board of Directors and the TTMA Management and staff for your attendance to our Dinner. Your presence enriched that special evening!
If you are interested in doing business with the twin-islands... The Jamaica– T&T Trade Facilitation Desk is willing to assist you:
Informing Jamaican businesses (among others) about import regulations & entry requirements into Trinidad and Tobago, as well as representing their interests; Encouraging networking and facilitating business match-making with T&T companies to boost investment and trade; Addressing main areas of concern and key issues to the relevant trade institutions & regulatory agencies in T&T and Jamaica (intermediating with such arms as customs, the standards authorities, and helping with negotiating the bureaucracy) and offering support solutions; Assisting in the coordination of visits and trade missions to T&T (planning, ground support and follow up); Undertaking consultations with prospective exporters, business support associations and representatives of the public sector institutions that play key roles in the export process in both countries. If you need any additional information, you can contact Mrs. Naika Pichi-Ayers, JamaicaT&T Trade Desk Officer and Editor of the Newsletter at: (868) 675-8862 Ext. 239 Email: tradeassist@ttma.com Webpage: http://www.ttma.com/jamaicatt_trade_desk