Jamaican Manufacturers Need to Modernize And Retool

Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, says Jamaican manufacturers need to focus on modernising and retooling their plants if they are to be competitive.

The Minister was addressing participants at a Medium Term Socio-Economic Policy Framework (MTF) Sector Planning Workshop, on July 6, 2012 at the Planning Institute of Jamaica (PIOJ), in Kingston.

Mr.  Hylton noted that as global investment in new technologies grows, unless manufacturers are able to invest more in capital or technology, their long-term competitiveness will be significantly compromised.

“The high cost of energy is not our only obstacle. At the end of the day, unless we modernise our operations, even if there is a significant reduction in the cost of energy, some of us will still find it difficult to compete with our trading partners,” he said.

The Minister, who was speaking to several manufacturers and policy makers, acknowledged that the sector faces many challenges, including “the high cost of energy, bureaucracy and regulation, financing, corruption, taxation… limited economies of scale, resulting from relatively small plants geared for the domestic market; and relatively low levels of investment in modern technology and business practices.”

He emphasised that underlying all of these challenges is the issue of productivity, pointing out that the country’s weak economic growth over the past decade has been largely attributable to low productivity levels in the economy.

“Our labour productivity, which measure output per worker, lags behind that of our major trading partners. Total factor productivity – the overall efficiency of production – has declined at an average rate of 2.1 per cent every year during the period 1990 to 2010,”  he noted.

He argued that  the country desperately needs growth. “We need jobs. We need to significantly improve our productivity,” he said.

The Minister emphasised that the new policy framework must focus on “creating more opportunities for Jamaican manufacturers to grow and become more productive and competitive in the global marketplace.”

This may include measures to encourage the introduction of better production processes; developing new, more innovative products and improving existing ones; accessing new markets; adopting new business models, and reducing energy use, he said.

The Minister told participants that he will not participate in the further de-industrialisation of the manufacturing sector. “We have to do what is necessary to rebuild the sector,” he said, stressing that the rebuilding must be done in a different, more sustainable way.

He acknowledged that there is a lot to be done and that is what the Medium-Term Socio-Economic Policy Framework for the manufacturing sector was all about. “Our role is to set new directions in order to foster the growth of more productive and competitive manufacturing entities across Jamaica,” he said.

The manufacturing sector planning workshop had as its objectives:  to identify and agree on the priority issues affecting the industry; and to identify the priority actions to be taken to address these issues over the next three years.

By Andrea Braham, JIS Reporter