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2016, July 6 - JMA Warns of Impending Fallout from Brexit

Extracted from the Business Observer – July 6, 2016

The Jamaica Manufacturers’ Association (JMA) must pay close attention to the significant implications of Great Britain’s departure from the European Union on Jamaica and the Caribbean, according to Metry Seaga, JMA president.

“The United Kingdom is Jamaica’s sixth-largest export market with an export value of US$80.9 million. Once Britain leaves the EU, in effect Jamaica and our Caricom (Caribbean Community) counterparts will have no structural relationship with that country. I strongly urge the Government of Jamaica to not only monitor the developments, but make haste in creating a strategy to counter the impending fallout,” the JMA president insisted.

He was speaking at last Wednesday’s JMA annual general meeting at the organisation’s Duke St office in downtown Kingston where he was returned as president.
In his acceptance speech for the presidency Seaga noted: “Coming on the heels of the JMA’s 70th anniversary, we must continue to aggressively pursue opportunities to create employment and wealth for all Jamaicans. The manufacturing sector remains one of... the most viable areas for such pursuits.”

The president also celebrated the gains made by the manufacturing sector in 2015, including the fact that the sector expanded by 3.1 per cent, contributed 8.6 per cent to gross domestic product, employed approximately 73,000 individuals, and had exports valued at US$483 million.

He reasoned that the sector was able to achieve these gains by taking advantage of “favourable economic trends that are expected to remain consistent”: low inflation rates, decreasing lending rates, low oil prices, and an increase in demand due to the adjusted tax threshold which becomes effective this month.

On the other hand, Seaga lamented the devaluation of the Jamaican dollar and called on Government to create “an environment of certainty” and to “ensure stability”.

Seaga sought to address concerns raised by a member of the JMA regarding factory space and the quandary involving the Factories Corporation of Jamaica (FCJ) and the Auditor General’s Department (AGD). The Jamaica Observer had on June 15 stated that the AGD recently reported in Parliament – based on a regulatory audit of the FCJ – that there were “several alarming breaches of government guidelines… including spending on multimillion-dollar projects which have been delayed or were not completed”.

“We have to initially negotiate and negotiate because they (FCJ) want US dollar rent [for factory space]. When you have to work so hard to pay US dollar rent and see your money as a customer going down the drain, it hurts, it really hurts,” the JMA member said, while appealing to his president to ensure that the matter does not become another “nine-day wonder”.
The JMA member also proposed that factory space should be leased with the option of purchasing after three years.

In response Seaga conceded that the “FCJ has not served our purposes well”. He continued: “Manufacturers, we hear your call for factory space, retail opportunities and fair trade.” He added that the JMA was working with the Government and FCJ on an industrial factory space development programme.

On the matter of financing, raised by the same member regarding securing credit facility from the National Export Import (EXIM) Bank, the JMA president said the association will be unveiling two financing facilities.

“Sometime in early July, we will be signing an agreement with the EXIM Bank at a press briefing, where there will be approximately $1.5 million available to each member who qualifies for ‘uncollateralised’ loans,” Seaga stated.

“We do have a facility with NCB (National Commercial Bank) which gives up to $1 billion, and the interest rate for that is nine per cent …” he added, pointing out that the loan facility has a mixture of secured and unsecured components.

Seaga, who will serve a two-year term, will be joined by newly elected Deputy President Richard Pandohie, also CEO of the Seprod Goup, who replaced executive chairman of Corrpak Jamaica Limited, Howard Mitchell. Jason Dear of No Brand Chemicals was re-elected as treasurer of the JMA.

The newly elected executive was congratulated by Jamaica Exporters’ Association President Michelle Chong, executive director of the Bureau of Standards of Jamaica Yvonne Hall, and a representative of Jamaica Promotions Corporation.

The executive will be assisted by a board of directors which includes: Simon Roberts, Ian Forbes, Steven Sykes, Catherine Goodhall, David Martin, Paulette Rhoden, Christopher Powell, and Howard Mitchell.

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