Sectors Urged to Increase Output and Lower Unit Cost


Instead of looking at global figures and lamenting the country’s ability to compete, each factory, plant, and sector as a whole, must examine its current status and realistically plan ways to increase output and productivity, and to lower unit cost.
This challenge was given by Minister of Finance and Planning, Dr. Omar Davies, when he closed the 2004/05 Budget Debate in the House yesterday(April 28).
“There are too many simply gifted in explaining what is wrong and why we cannot compete. There are too few who simply see greater output as a challenge, have rolled up their sleeves and begin to demonstrate that we can meet the challenge,” he said.
Dr. Davies pointed out that the nature of the Jamaican economy had been radically changed over the last 30 years. Simply put, he said, the service sector now dominated the economy, accounting for over two-thirds of Gross Domestic Product (GDP). “Yet we still persist as if we were back in the days when output was bauxite, alumina, sugar and bananas,” he remarked.
The Minister said that while he was not writing off the traditional sector, there was “a need for us to come into this new Century and realize that while we wish to maintain a multi-sector economy, services will be the main driving force for the future”. He added that while Jamaica had lost competitiveness compared to other producers in traditional areas, such as sugar and bauxite/alumina, the situation was not beyond redemption.
In 1998, he informed, it took an average of 1.7 man hours to produce a tonne of alumina and by 2003 the figure had dropped to 1.28 man hours. This decrease of 24.7 per cent, Dr. Davies said, was as a result of improved productivity. The plant with the highest level of productivity moved from 1.7 man hours per tonne in 1998 to .96 man hour in 2003 and was expected to move to .8 man hour per tonne in 2004, Dr. Davies said.
However, he emphasized that increased productivity did not only come from improved labour productivity, but also from proper utilization of resources. “When our alumina plants were designed, oil was so cheap that it made no economic sense to conserve,” the Minister said, adding that increased oil prices have forced improvements. “In the case of the least energy efficient operation, oil consumption has declined from 3.6 barrels to produce a tonne of alumina to 2.85 barrels,” he noted.
The most energy efficient operatiors had reduced their consumption from 2.10 barrels to 1.74 barrels to produce a tonne of alumina, he said.
Turning to sugar, Dr. Davies said data from the Sugar Company of Jamaica (SCJ), which had just surpassed its production level of 2003, indicated that in terms of tonnes of sugar produced per factory employee, at Bernard Lodge the figure had moved from 72.9 tonnes in 2002 to 80 tonnes in 2004. Meanwhile, at Monymusk it has moved from 71.8 tonnes for 2002 to 113 tonnes in 2004.
In terms of tonnes of sugar produced per hectare, at Frome the figure has moved from 5.92 tonnes in 2002 to 6.48 tonnes for 2004; Bernard Lodge, from 4.67 tonnes in 2002 to 5.47 tonnes in 2004; and Monymusk, from 4.17 tonnes in 2002 to 6.27 tonnes in 2004.

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