CONTACT Magazine (Vol.19 No.4 — December 2019) by MEP Caribbean Publishers

Vol.19 No.4 â&#x20AC;&#x201C; December 2019

THE NEXT DECADE

The Voice of Business in Trinidad & ToBago

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Vol.19 No.4 – December 2019

Contents Business profile: Jacqueline Francois extends her father’s legacy 27 Jade Cumberbatch talks to Jacqueline Francois about her career, her volunteer work and pharmaceutical giant Oscar Francois’ 60-year milestone

The Chamber’s growth and learning corner 31 Three business leaders tell CONTACT what they have been reading as they seek to continually expand their horizons

The value of corporate governance  Volunteers and staff of the Ministry of Planning and Development clean up Chacachacare Island during the 2016 International Coastal Clean-up campaign (Courtesy the Ministry of Planning and Development)

Editor’s note

Natalie Dookie introduces this issue of CONTACT

Special Section 2030: the next decade

Shelly Ann Mohammed, Head, ACCA Caribbean, analyses the local corporate governance environment, and shares ACCA’s latest research on the subject

Innovation in business: meet the food innovators 37 Jeanette Awai takes us through the journey from idea to concept of local food manufacturers Slimdown 360 and Del Mano Food

Top 5 facts about shipping in Trinidad and Tobago 40

Vision 2030: preparing for the five-year milestone 8 Kay Baldeosingh-Arjune interviews the Minister of Planning and Development, Camille Robinson-Regis, to assess Trinidad and Tobago’s performance in the short-term

Lessons from Vision 2020 14 We look back at Vision 2020 with Kevin Baldeosingh, who undertakes a personal assessment of what worked, what did not, and why

Preparing for the world of 2030

Global mega-trends will dictate energy use, demographics, technology and the environment. Natalie Dookie considers the impact on Trinidad and Tobago

The voice of business: investing in Trinidad & Tobago 22

Logistics and transportation experts Ramps Logistics test our knowledge about Trinidad and Tobago’s shipping industry

Economic outlook 43 The Chamber’s analyst examines the global, regional and domestic economic landscape, and forecasts end of year performance

Energy update 46 How is Trinidad and Tobago’s oil and gas sector performing? The Chamber reviews recent data

Welcome to new members 48 The Chamber extends a warm greeting to members who recently joined

On the cover:

Vol.19 No.4 – December 2019

2030: the next decade.

CONTACT talks to the Chamber’s president and other business leaders about the local investment climate

The rising cost of crime 24 Security & risk consultant Pauline Hamilton maps how the increasing cost of crime is impacting the private sector across the Caribbean and in Trinidad and Tobago

DECEMBER 2019

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THE NEXT DECADE

The Voice of Business in Trinidad & ToBago

imacoconut/shutterstock.com

Business profile

The voice of business in Trinidad & Tobago

Published by

The Trinidad and Tobago Chamber of Industry and Commerce

Columbus Circle, Westmoorings, Port of Spain, Trinidad and Tobago PO Box 499, Port of Spain • Tel: (868) 637-6966 • Fax: (868) 622-4475 Email: chamber@chamber.org.tt • Website: www.chamber.org.tt

Tobago Division: ANSA McAL Building, Milford Road, Scarborough, Tobago Tel: (868) 639-2669 • Fax: (868) 639-2669 Email: tobagochamber@chamber.org.tt Produced for the Chamber by MEP Publishers (Media & Editorial Projects Ltd)

6 Prospect Avenue, Maraval, Port of Spain, Trinidad and Tobago Tel: (868) 622-3821 • Fax: (868) 628-0639 Email: info@meppublishers.com • Website: www.meppublishers.com

Editor Natalie Dookie Online editor Caroline Taylor General manager Halcyon Salazar Page layout & design Tricia Dukhie Advertising Evelyn Chung, Tracy Farrag, Joanne Pennie, Indra Ramcharan Production Jacqueline Smith Editorial assistants Shelly-Ann Inniss, Kristine De Abreu

DISCLAIMER Opinions expressed in CONTACT are those of the authors, and not necessarily of the Trinidad and Tobago Chamber of Industry and Commerce or its partners or associates. CONTACT is published quarterly by the Trinidad and Tobago Chamber of Industry and Commerce (TTCIC). It is available online at www.chamber.org.tt/media/the-contact-business-magazine ©2019 TTCIC. All rights reserved. No part of this magazine may be reproduced in any form without the written permission of the publisher.

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Discover the power of ethics Ethics is having a more powerful impact on business and society than ever before. And consumer and government focus on ethics and sustainability is sharper than ever before. ACCA members are trusted because their ethical training is unsurpassed. That makes them essential to business success, today and tomorrow.

Find resources on the power of ethics at accaglobal.com/ethics 6

DECEMBER 2019

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Editor’s note

Editor’s note In this issue of CONTACT, we explore these issues and more in 2030: the next decade. Firstly, we examine Trinidad and Tobago’s Vision 2030 plan as we prepare for the first five-year milestone. We look back at lessons learnt from the 2020 plan, and anticipate the mega-trends of tomorrow and how these will impact Trinidad and Tobago

From problem to plan – that’s the theme of South Africa’s 2030 national development plan (NDP). It quite simply captures the basis of most NDPs, which identify national challenges and propose corresponding solutions, thereby transforming economies. An August 2019 study on NDPs, authored by Admos O. Chimhowua, David Hulmeb and Lauchlan T. Munroc, states that over 130 countries have produced national development plans to show their priorities for achieving the UN’s 17 sustainable development goals. That’s more than double the number of global plans in existence a decade ago. Many plans are a product of national consensus processes, although some are produced mainly by technocratic elites. The fiveyear (medium term) plan is the most popular, although some countries have longer term vision documents. The majority of national plans lack financing strategies, a factor that can affect implementation and achievement. There are a number of reasons why development plans fail: lack of political will and buy-in, inadequate data and planning capacity, and constrained resources, mainly financial. However, despite these challenges, the study states that we are in a new era of national development planning, “in which plan documents are no longer an end in themselves but are seen as part of a process of communicating and negotiating national ideals with internal and external audiences.” Today’s plans are also more closely linked to global ideals, increasing their chance of success. In this issue of CONTACT, we explore these issues and more in “2030: The Next Decade". Firstly, we examine Trinidad and Tobago’s Vision 2030 plan as we review the first five years. We look back at lessons learnt from the 2020 plan, and anticipate the mega-trends of tomorrow and how these will impact Trinidad and Tobago. In “The Voice of Business” you will hear from the Chamber’s president and other business leaders on investing in Trinidad and Tobago. We consider how the rising cost of crime is impacting the business community; and Jacqueline Francois tells the compelling story of the rise of Oscar Francois Limited in this issue’s business profile. “The Chamber’s Learning and Growth Corner” speaks to three business leaders about what they are reading. ACCA analyses the corporate governance environment in Trinidad and Tobago, and we meet two new food innovators – Slimdown 360 and Del Mano Food. Read our “Top 5 Facts” about shipping in Trinidad and Tobago. The Chamber examines the economic outlook for Latin America and the Caribbean, and analyses the local energy sector’s performance. We also welcome the Chamber’s new members. We look forward to your feedback on this issue: let us know your thoughts on Trinidad and Tobago’s national development planning process.

Natalie Dookie, Editor

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DECEMBER 2019

Courtesy the Ministry of Planning and Development

Business profile

DECEMBER 2019

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2030: the next decade

Vision 2030: the first five years “A fundamental aspect of Trinidad and Tobago achieving developed nation status is the need to adopt positive values, attitudes and behaviours which can support and catalyse our development. We must, for example, place greater emphasis on productivity and improving our work ethos, respect for the rule of law and increasing our innovative capacity. The more we adopt these values, the faster we transform society and improve our competitiveness ranking. We have been making noted progress in the areas of increased evidencedbased decision-making through the establishment of a national monitoring and evaluation system, encouraging innovation, promoting citizen participation in tackling development issues affecting them, and advocating environmental care and cultural harmony in diversity.” The Hon. Camille Robinson-Regis Minister of Planning and Development, Trinidad and Tobago

Trinidad and Tobago’s national development strategy, Vision 2030, completes its first five-year segment in 2020. What has been achieved to date? The Minister of Planning and Development, Camille Robinson-Regis, answers CONTACT’s questions by Kay Baldeosingh-Arjune Freelance writer

What are the basic principles of Vision 2030? Vision 2030, our national development strategy, lays the foundation for Trinidad and Tobago to reach developed nation status by the year 2030. It is based on five principles: • Every citizen is valued and has equal opportunity to achieve their fullest potential • All citizens will enjoy a high quality of life, with healthcare available to all • All citizens are assured a sound, relevant education system • The family is the foundation of the society • The diversity and creativity of the people is valued and nurtured. Five development themes are the pillars that support Vision 2030:



The goal of Vision 2030 is to improve the quality of life of the people

Camille Robinson-Regis, Minister of Planning and Development, Trinidad and Tobago

(1) Putting people first: nurturing our greatest assets (2) Delivering good governance and service excellence (3) Improving productivity through quality infrastructure and transport (4) Building globally competitive businesses (5) Placing the environment at the centre of social and economic development. Each thematic area has actionable and achievable goals, such as improved health and poverty eradication; strong and independent democratic institutions; superior infrastructure and transport systems; a globally competitive economy; and a climate-smart environment.

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DECEMBER 2019

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Vision 2030 successes to date The biggest achievements at year-end 2019 in connection with Vision 2030 goals include: 1. Rehabilitation and refurbishment of several existing health and educational facilities across the country.

Courtesy the Ministry of Planning and Development

2030: the next decade

2. Ongoing construction of new homes and apartments, community swimming pools and community centres. 3. Development of a National Children’s Policy. 4. The establishment of two new Children’s Courts (Trinidad and Tobago was the first Caricom country to open such facilities, in 2018). 5. Development of a robust legislative agenda including: • The Administration of Justice (Indictable Proceedings) (Amendment) Bill, 2018 • The Miscellaneous Provisions (Proceeds of Crime, AntiTerrorism and Financial Intelligence Unit of Trinidad and Tobago) Bill, 2018 • The Civil Asset Recovery and Management and Unexplained Wealth Bill, 2019. 6. Completion of the Trade Licence Unit digitisation process which will eliminate the use of paper-based files and shorten waiting times. The provision of e-government services under the Single Electronic Window (SEW), such as company registration, goods declaration and import duty concession, will reduce business transaction time. 7. Trinidad and Tobago is the first Caribbean country, and the second small island developing state, to submit its emissions target. This stipulates a 15% reduction in cumulative CO2 emissions from industry, transportation and power generation by the year 2030. 8. Development of the legal framework for a national monitoring, reporting and verification system for tracking greenhouse gas emissions and mitigation actions. This will be fully implemented following the completion of a pilot testing phase in 2020.

By 2020 we expect to achieve a number of key milestones which will address our main national challenges, including low productivity, weak institutions, crime, traffic congestion, pollution and climate change

 Minister Robinson-Regis (right) helping volunteers to replant mangroves at Brickfield mudflats in central Trinidad

What key milestones does the government expect to achieve in 2020 that will affect the business sector? By 2020 we expect to reach several key milestones which will address our main national challenges, including low productivity, weak institutions, crime, traffic congestion, pollution and climate change. These will positively impact the business sector. They include: • Addressing the skills gaps in the workforce • Reducing the most problematic factors for doing business • Increasing access to timely and accurate data to inform decisionmaking • Improving connectivity and efficiency through improved transportation networks and increased opportunities for new domestic business development • Increasing opportunities for higher value-added goods and services • Greening of manufacturing processes to protect the environment. Some of the actions involved are: • Development of a draft National Manpower Plan to bridge the gaps between the labour market and the education system, and to grow the sectors identified for diversification of the economy

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DECEMBER 2019

2030: the next decade • The National Crime Prevention Programme, which is already operationalised; its impact will be felt in 2020

Building Globally Competitive Businesses THEME IV

LONGTERM GOALS

• Establishment of the National Statistical Institute of Trinidad and Tobago to provide quality data in a timely manner to support evidencebased decision-making

1. A globally competitive economy

1-15 Years; 2016-2030

MEDIUMTERM GOALS

1. A premiere investment location

1-10 Years; 2016-2025

SHORTTERM GOALS

1. Macroeconomic stability will be maintained

1-5 Years; 2016-2020

• Initiatives to enhance road infrastructure, reduce traffic congestion, and support productivity

2. Businesses are producers of a wider range of products and services for the global market

2. A business environment that is conducive to entrepreneurship and innovation

3. A more attractive destination for investment and trade

4. Firms are producers of high valueadded products and services that can compete in export markets

Source: Vision 2030: The National Development Strategy of Trinidad and Tobago 2016-2030, https://www.planning.gov.tt/content/vision-2030

• Construction of the Phoenix Park Industrial Estate in Couva and the Moruga Agro-Processing and Light Industrial Park, which will help to move the economy further up the production value chain while earning foreign exchange • By 2020, government expects polystyrene products, such as styrofoam containers, will be illegal in Trinidad and Tobago. This is in keeping with international best practice and has already been legislated by other countries in the Caribbean.

Trinidad & Tobago has had a chequered past with respect to the implementation of policies, strategies and projects. What would you say to the sceptic who believes that Vision 2030 looks good on paper but will lack concrete, trickle-down effects? The government has undertaken a number of initiatives to ensure that the benefits of the plan do trickle down to citizens and the private sector. The business community has already experienced quite a few benefits related to the ease of doing business, increased facilitation of export competitiveness and productivity, and measures to curb the negative impact of commercial activity on the environment. Other initiatives include:

The private sector must lead the diversification thrust with Government playing a facilitative and supportive role — Vision 2030

DECEMBER 2019

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• Movement away from manual applications for company registration, towards electronic applications. This has reduced the length of time it takes to start a business from ten days to three. • The Construction Permit System, DevelopTT, will automate, modernise, and streamline the construction permit process to reduce the transaction time, the number of processes and the cost of obtaining construction permits. DevelopTT is expected to roll out in the fourth quarter of 2019.

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• A secured Transactions and Collateral Registry System is under development. This will facilitate the use of movable property (intellectual property, agricultural products, accounts receivable, machinery and equipment) as collateral, and will provide small and medium-sized enterprises with improved access to finance. • An Electronic Funds Transfer Framework for government agencies is being developed. It will be able to make and receive electronic payments. Efforts towards building capacity within the Inland Revenue Division to improve taxpayer services are under way. A unified legislative framework that harmonises the Bankruptcy and Insolvency Act with other relevant legislation, including the Companies Act, has also been created.

 Minister Robinson-Regis with delegates from Connect America, Challenge: You Learn and You Endeavour

• The EXIMBANK Forex Facility, in the amount of US$100 million, was launched in May 2018 to help manufacturers purchase the raw materials needed to increase exports and improve forex earning capability. To date, the EXIMBANK has assisted 38 manufacturers. • Several policies were developed to help boost competitiveness, expand market access, increase export capacity and improve the business and trade-enabling environment. • Government proposes to introduce an incremental foreign exchange earnings tax credit for the manufacturing sector. This will particularly affect agriculture and agro-processing, food and beverage, non-energy and non-petrochemical products. Legislation will be introduced in parliament during this fiscal year. • The continued expansion and enhancement of the Single Electronic Window (SEW). • Improvements to port facilities are ongoing with the introduction of more sophisticated container scanning equipment.

The business community has already experienced quite a few benefits related to improving the ease of doing business, increased facilitation of export competitiveness and productivity, and implementation of measures to curb the negative impact of commercial activity on the environment

• Implementation of international agreements under the World Trade Organisation to expedite the movement, release and clearance of goods at the border and improve infrastructural works at the ports of Port of Spain and Scarborough. We are building a new society in which every citizen and business becomes involved in shaping the future of our nation; a place where everyone will have an individual responsibility to keep our streets clean, our communities crimefree, our roadways safe, and our economy stable.

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DECEMBER 2019

2030: the next decade

Lessons from Vision 2020 Trinidad & Tobago: selected developmental indicators 2005 + 2018 As the indicators in the table show, Trinidad and Tobago has made little substantive progress in the 15 years since Vision 2020 was launched. Only one indicator, GDP per capita, shows improvement, with a 23% rise. However, this measure only reflects an increase in energy revenues rather than productivity growth, and therefore is unlikely to be sustainable. More relevant indicators are the spike in murders, the growing perception of corruption, and the decline in democracy. If we were on a developmental path, these trends would be going the other way. Similarly, infant mortality has been shown to correlate with socio-economic development, perhaps because of how a society takes care of its babies often indicates other progressive policies. But the steepest decline is also the most reliable indicator of our inability to achieve Vision 2020: Trinidad and Tobago has far less economic freedom now than it did in 2005.

Table 1: Selected developmental indicators 2005 & 2018 Measure

2005

GDP per capita

US$12,413 US$15,300

Homicide rate

Infant mortality

Corruption

41*

Economic freedom

71.5

57.7*

Democracy

45§

¥ per 100,000 persons * highest score 100

36¥

Ω per 1,000 births § out of 112 countries

Source: various local and international entities

2018

DECEMBER 2019

By 2020, according to the plan, Trinidad and Tobago should have attained developed nation status. We should have invested in sound infrastructure, created an enabling environment for business and innovation, and entrenched effective governance. In this personal assessment, Kevin Baldeosingh considers the success of Vision 2020 by Kevin Baldeosingh Freelance writer

The Draft National Strategic Plan (DNSP) for Vision 2020 was published in 2005, and involved approximately 600 professionals, activists and experts in various fields. The goal of the DNSP was to “build a developed nation together, calling us to action and pointing the way ahead.” Fifteen years later, Vision 2020 has proved to be a near complete failure. The original plan had the following goals: • • • • •

equal opportunities for all citizens quality healthcare for everyone, with peaceful and environmentally healthy communities a modern education system respect for the rule of law, human rights, and democracy diversity and creativity valued and nurtured.

The Vision 2020 dilemma In 2010, government published a progress report on Vision 2020 which claimed “an implementation rate of approximately 70 per cent in four years”. However, the report’s own statistics show that only 18% of objectives were actually achieved, and 30% showed no significant progress. With respect to goals like “effective government”, the achievement rate was a dismal 3%; for competitive business, 17%; and for “developing innovative people”, 4%. By publishing the new plan, Vision 2030, in 2017, the government implied that Vision 2020, not yet completed, was not a success (see Table 1). This new initiative identified negative cultural values as the core basis for the lack of implementation of Vision 2020 and, concomitantly, posited that success would be achieved by promulgating those norms and attitudes which research had shown were necessary for economic and social progress. “A main part of the answer resides in cultural factors or the values, attitudes and behaviours that we, the people of Trinidad and Tobago, either possess or lack,” says the 2030 Draft Plan. “They manifest negatively in our country in many ways such as the persistence of corruption, rent seeking, low productivity and poor work ethos.”

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2030: the next decade

If, therefore, the government were to concentrate on improving Trinidad and Tobago’s economic freedom measures, this would help unleash the potential of the society as a whole

twice the average per capita income in the least free nations. Life expectancy is 79.4 years in the top quartile compared to 65.2 years in the bottom quartile, and political and civil liberties are considerably higher in economically free nations than in unfree nations.”

• • • • •

Fabrik Bilder/shutterstock.com

The Plan lists five key cultural shifts needed to make Trinidad and Tobago a developed nation: More evidence-based decision making Citizens who are more independent and critical thinkers, creative, innovative and entrepreneurial Positive work ethic Adherence to the rule of law and enforcement against corrupt practices Greater environmental care and sensitivity.

Explaining failure The role of culture in socio-economic progress became important by the 1990s when it became clear that three decades of aid from western nations to African and Latin American countries had failed to bring about economic development. Culture became the favoured variable to explain this failure, drawing largely on research done by anthropologists Geert Hofstede (who studied firms in different countries) and Lawrence E. Harrison, who worked for USAID for over 20 years in Latin America and later created the Culture Matters project. But in the early 21st century, an alternative explanation based on economics became prevalent, which held that using the free market rather than government was a more effective way to attain development, since state-directed initiatives provided no incentives for politicians or public servants or even entrepreneurs to make productive decisions. A key figure in this shift was former World Bank economist William Easterly, who wrote several books on aid and development in which he argued that aid and government programmes failed to bring about economic progress because “a society’s economic growth does not always pay off at the individual level for government officials, aid donors, and private businesses and households. Incentives often lead them in other, unproductive ways.” The evidence in favour of this perspective is powerful. State-run corporations tend to be inefficient and wasteful, as we well know here in Trinidad and Tobago, and the apparent exceptions in East Asian nations such as South Korea and China are outliers. More importantly, the correlation between economic freedom indicators and socio-economic development are extremely robust. The Cato Institute, a free market thinktank, notes that “the average income of the poorest 10 percent in the most economically free nations is almost

Culture or economics? So which is the better analytical paradigm for Trinidad and Tobago: culture or economics? Both are applicable, but in different ways. It seems that cultural factors better explain socio-economic success between different cohorts within the society, whereas economic principles account for our overall stasis as a nation. Thus, Trinidad and Tobago ranks poorly on Ease of Doing Business (60 out of a high score of 100 and ranked 105 out of 190 countries) and on economic freedom. And this lack of economic freedom affects the less well-off most harshly. One indicator of this problem is the Industrial Court, which prevents any individual employee from bringing a grievance to it (the Act mandates that only trade unions can bring a case). If, therefore, the government were to concentrate on improving Trinidad and Tobago’s economic freedom measures, this would help unleash the potential of the society as a whole. Other benefits would naturally follow from economic growth based on productivity rather than resource rents. They would include more youth employment (because employers would be less hampered by regulations that exact costs for hiring unskilled workers), less crime (because more youths would be employed in jobs where they could acquire marketable skills rather than in URP and CEPEP programmes), and reduced corruption (because the state would be less involved in commercial activities). Vision 2020 remains a worthwhile goal. But that first attempt showed that the methodology for achieving developed-country status was fundamentally wrongheaded. It is now time to use the market-oriented approach, which is already bearing fruit in most Latin American and several African nations.

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DECEMBER 2019

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Business profile

DECEMBER 2019

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2030: the next decade

Preparing for the world of 2030

2030’s mega-trends Mega-trends are the strategic forces that shape our future. Akin to a slow-moving glacier, they cannot easily be turned around by humans. They are backed up by verifiable data. Here are the likely megatrends of 2030:

In the next decade the world’s population will increase by another billion, temperatures will rise by at least 1.5 degrees, and global energy consumption will increase by 1.7% per year. What does this mean for Trinidad and Tobago? Are we ready for the world of 2030?

1. By 2030, the world will be at least 1.5 degrees warmer than during pre-industrial times. This will lead to the increased occurrence of extreme heat, droughts and wildfires. 2. The world’s population will grow by another billion, taking us to 8.6 billion in 2030. 3. As a whole, the world will be older than today: in 2030, 12% of the world population will be over 65.

by Natalie Dookie Freelance writer

In 2030 the world will be more connected yet more fragmented. There will be shifts in energy use, demographics, politics, technology and the environment. How Trinidad and Tobago fares in the next decade will depend on the decisions taken today. CONTACT considers the impact of these mega-trends on Trinidad and Tobago.

Global mega-trends Analysts state that the world will be more populated and have more elderly people than at any other time in our history. By 2030, China’s economy will be more than 2.5 times that of India and almost as large as those of the United States (US) and the European Union (EU) combined. As the world becomes more populous and interdependent, population pressures and threats will increase and become more complex. Chief amongst these will be mass migration, human and narcotics trafficking, terrorism, global pandemics, cyber-crime, urbanisation, resource scarcities and environmental degradation as a result of climate change. ICT experts advise that technology will be ubiquitous and ingrained in every sphere of human activity. It will also be more disruptive. Globalisation and technological advances will shift the engine of economic growth from the advanced countries to the emerging economies of Asia, and economic activities from the production of goods to the creation of services. Many countries will shift from heavy reliance on fossil fuels to alternative energy sources, thus accelerating the transition to a more secure climate future.

4. By 2030, two-thirds of the world will live in cities. Where urban growth occurs in an uncontrolled fashion, it leads to urban sprawl, low productivity, segregation, congestion and crime. 5. Projections suggest that average global economic growth will be around 3% a year in the coming decade. Most of this growth will happen in developing economies, whose growth will accelerate from today’s 3.1% to 3.6%. 6. Energy consumption will rise globally by 1.7% per year. 7. By 2030, the number of devices connected to the internet will have reached 125 billion, up from 27 billion in 2017. 8. The power of states will be determined by their relational influence. In the future, no single state will be able to tackle major global challenges alone. As a result, a state’s importance will depend on its capacity to influence the policy decisions of others. Source: European Strategy & Policy Analysis System (ESPAS), Global Trends to 2030, Challenges and Choices for Europe, April 2019, https://ec.europa.eu/assets/epsc/pages/espas/ chapter1.html

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2030: the next decade

Globalisation and technological advances will shift the engine of economic growth from the advanced countries to the emerging economies of Asia, and economic activities from the production of goods to the creation of services The Caribbean context In addition to these global trends, the Caribbean must consider current events such as Britain’s exit from the EU, the political-economic crisis in Venezuela, the impact of Chinese investment, and the agenda of the US in terms of immigration, trade, tourism and investment diversion. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC), in its Caribbean Outlook 2018, noted that Caribbean economies have experienced persistent low growth since the global financial crisis of 2008-2009. This is associated with fiscal challenges, especially the region’s debt burden, which remains among the highest in the world relative to the size of its economies. Experts say that regional chronic current account imbalances are the result of underlying problems, including lack of competitiveness and limited diversification of markets and products. The skill level in the workforce is low, and there is a mismatch between the output of the region’s educational system and the requirements of the labour market. Compounding this situation, the Caribbean has one of the world’s highest levels of emigration of tertiary-educated and skilled individuals. Adolescent pregnancies and youth unemployment in the region are among the highest in the world. This, along with growing poverty, income inequality, climate change, rising crime, gender-based violence and non-communicable diseases, must be factored into regional development plans.

Trinidad & Tobago: getting ready

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To cope with these mega-trends, citizens must possess 21st-century expertise and technological know-how, and become multilingual and multi-skilled. Technological advances are expected to lower production costs, and there will be more competition from imports. Local authorities recommend that producers incorporate new advanced technologies in the production of goods and services. Trinidad and Tobago will require a relevant, flexible education system aligned to a world where technology plays a major role. At the same time, as the world shifts to alternative energy and sustainable production, businesses should focus on adding value. Improvements in the criminal and civil justice system will enhance social stability and positively impact economic development. Public sector reform is essential, as well as strengthening the system of national

Experts say that regional chronic current account imbalances are the result of underlying problems, including lack of competitiveness and limited diversification of markets and products

jaroslava V/shutterstock.com

statistics. By 2030, public institutions will need to be more capable, professional and proactive. Investment in infrastructure, with emphasis on transportation and public utilities built to internationally accepted standards, is another important component. Competitive businesses are important to a developed-nation thrust. As we move towards 2030, firms should have advanced strategic and operational systems, access to a capable, knowledge-based workforce, and high quality resources, fuelled by a sophisticated consumer base. As we look ahead, Trinidad and Tobago must become more productive, and more competitive. We must work smarter, be more innovative, and create new high-value products. As such, it is integral that research and development, as well as innovation, be institutionalised at all levels of education.

Many countries will shift from heavy reliance on fossil fuels to alternative energy sources, thus accelerating the transition to a more secure climate future

National challenges National development plans must be set against a backdrop of specific national challenges: 1) The economy is highly dependent on oil and natural gas, with energy exports accounting for 85% of total export earnings, 40% of government revenue and over 35% of GDP. 2) Trinidad and Tobago has an ageing population; the median age is 32.6 years and 13% of the total population is 60 years and over. 3) Urban development is encroaching on agricultural and environmentally zoned regions. 4) There are gender disparities in the education system, with female enrolment and educational attainment exceeding that of males. 5) Trinidad and Tobagoâ&#x20AC;&#x2122;s popularity as a migrant destination is placing greater pressure on law enforcement, legislative and administrative systems.

chamber.org.tt

DECEMBER 2019

2030: the next decade

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6) We are vulnerable in the area of food security â&#x20AC;&#x201C; partly because of predatory pricing and the dumping of harmful or sub-standard products. 7) Productivity is demonstrably low in both the public and private sectors. 8) The output of the education system needs to be aligned to human resource needs and economic drivers. 9) Weaknesses in the public service have negatively impacted immigration, customs, land management, and planning approvals. 10) We have high rates of serious crime, particularly homicides, coupled with inadequate responses by law enforcement, the prison service and the justice system. 11) Climate change is a threat: the degradation of coastal and marine ecosystems, and the negative impact of industrial effluents, have made our ecosystems more vulnerable. 12) ICT adoption rates by government and private sector are low. There is an absence of proper legal and regulatory frameworks for e-goods and services.

Finding solutions A thriving private sector is at the core of every successful economy, especially when firms produce high-value products and services that can compete in export markets. Development specialists advise that Trinidad and Tobago should take steps to improve the competitiveness of the local private sector and build a sustainable stable economy by broadening its enterprise base across a range of sectors at key stages of the value chain, where capabilities match global opportunities. This entails venturing into more knowledge-intensive and complex economic activities with an emphasis on export-oriented sectors where we can build a competitive advantage. To be competitive, our goods and services must conform to international standards. Lower quality imports must be displaced through local production. We must also accelerate transitioning from a fossil fuel-based economy to a low-carbon one. Advancing our development agenda will require the continuous review, modernisation and strengthening of the legislative framework, the court system, law enforcement and municipal policing. Modernising Trinidad and Tobagoâ&#x20AC;&#x2122;s public management systems is another prerequisite for developing a competitive private sector. Government should forge strategic links with trading partners to eliminate barriers that impede the private sector, and support international efforts to tackle environmental challenges. The extent to which Trinidad and Tobago is successful in achieving its Vision 2030 goals will depend on whether it can integrate budgetary and planning systems, identify and formulate appropriate projects and programmes, and execute them efficiently and effectively.

DECEMBER 2019

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The extent to which Trinidad and Tobago is successful in achieving its Vision 2030 goals will depend on its ability to integrate budgetary and planning systems, identify and formulate appropriate projects and programmes, and execute them efficiently and effectively

2030: the next decade

Improving productivity: Generation Flex According to a recent Global Workspace Survey undertaken by the International Workspace Group, two-fifths of working people worldwide see commuting as the worst part of their day (40%), and more than half of the respondents believe it could be obsolete by 2030. Generation Flex is a concept which leaves it up to employees to choose when they work and where. Gone are the days when workers sit behind a desk for 40 hours a week. If employees feel valued and trusted, they are naturally more motivated to put in the appropriate hours to complete their tasks. Working hours of Monday to Friday, 8am to 4 or 5pm, are still very prevalent in Trinidad and Tobago. We may not be quite ready for Generation Flex, but we

should begin preparing for it by allowing employees to shape their typical work day. Employees should be given the freedom to decide what works best for them. Flexitime and the option of working from home have been shown to increase employeesâ&#x20AC;&#x2122; productivity. For example, working 60- to 90-minute periods and taking 15- to 20-minute breaks during the day may improve results. At Regus, we tap into several different platforms and software that allow us to run our centres effectively with a minimal workforce. Our user-friendly systems make employee tasks simpler, while lessening the margin of error. Working from home full-time has its advantages, but it is not the ideal situation for many. After one or two years, people often need more human or business interaction; they find there are too many distractions at home, and may be unable to participate in conference calls due to unprofessional background noise.

Flexible work patterns can be tied into the different workspace solutions offered by Regus. All-inclusive private office space, co-working, virtual offices and lounge memberships promote a modern, more effective way of doing business. Many lounge membership clients are qualified, experienced professionals and entrepreneurs who also have a home office. Having unlimited access to our professional lounges gives them an alternative affordable professional working environment. Itâ&#x20AC;&#x2122;s time for Trinidad and Tobago to rethink its attitude to work, and for employers to embrace Generation Flex. At Regus, we are doing ou part to get the balance right. Stephanie Quesnel General Manager, Trinidad & Tobago, Regus Caribbean

chamber.org.tt

DECEMBER 2019

Voice of business

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Why did your firm recently invest in Trinidad and Tobago? What were the risks and challenges encountered?

The advantages of investing in Trinidad and Tobago are a stable economic and political environment, a well-educated and highly skilled workforce, proximity to the Americas, access to regional and global trade markets, and low energy costs. On the other hand, the main obstacle to local and foreign direct investment is the highly bureaucratic nature of our public sector. In fact, the World Bankâ&#x20AC;&#x2122;s 2019 Ease of Doing Business index ranked Trinidad and Tobago at 105 out of 190 countries. Approval processes are disjointed, scattered across many ministries and state entities, making market entry difficult, especially for newcomers. There is an urgent need to improve the quality and efficiency of government services, making the customer a priority. We also rank low, 79 out of 141, on the Global Competitiveness Index, which investors consider to assess the long-term growth and sustainability of a country. Of additional concern to the business community is the rising cost of crime, the need for improved defences against natural disasters, and the perception of corruption. In the latest Corruption Perception Index, we ranked 78 out of 180, with the report citing issues such as bribery, governmentâ&#x20AC;&#x2122;s inability to treat with corruption and the unwillingness to report on corruption by citizens. The Chamber considers the current economic downturn as cyclical in nature. We expect 2020 to be flat, but by 2021 we anticipate that the impact of government policies will be felt, and we will see a return to growth. This is a good time for businesses to look for new opportunities.

Investing in Trinidad and Tobago

VOICE O F BUS INE SS

Reyaz Ahamad President, Trinidad and Tobago Chamber of Industry and Commerce; Executive Director, Southern Sales and Service Company Limited

Changes to our oil and gas landscape present opportunities for government to diversify the economy. We would also like to see positive movement in the tourism sector, alongside a holistic approach to development in Tobago. We need to find new ways to inject capital

Southern Sales has played a major role in the local automotive business for over 55 years. Currently we are improving our customer experience by investing about TT$50 million in our aftersales department and incentivise the growth of small and medium-sized businesses. Southern Sales has played a major role in the local automotive business for over 55 years. Currently we are improving our customer experience by investing about TT$50 million in our after-sales department. Work on one service centre will be completed in 2019, and the other in 2020. We believe in the future prosperity of Trinidad and Tobago, and will continue to invest in our operations in this market.

Voice of business

Trinidad and Tobago is one of the stronger economies regionally, with a superior per capita income. The highly skilled labour base is a key investment incentive, together with Caricom’s free movement of professional resources. The country has a very open environment for doing business. The presence of a highly skilled labour force, a reliable electricity supply, easy access to essential utilities, telecommunications and a strong legal framework are significant enablers. This is supported by a steady trade route throughout Central, South and North America and the Far East. Our investment in south Trinidad contributed significantly to the growth of our business footprint. In 2018, we established a premier facility for Courts, Courts Optical and the Ashley Furniture HomeStore at South Park – a total investment of over TT$25M, with 31,500 square feet of retail space. During the construction phase employment was generated for

approximately 100 people; sustained employment is currently at 50. Earlier this year we also expanded our technological reach for sales financing through the launch of our digital technology app EMMA, which enables easy access to credit facilities for our customers. The main risk to the business is the impact of crime on our operations. We continue to place a very high value on the safety and security of our people, and we have strengthened our infrastructure accordingly. Additionally, we have embarked on building strategic relationships that support the national process of dialogue to find sustainable solutions to crime. Through this advocacy approach, we have established partnerships with NGOs, private sector entities and the Trinidad and Tobago Police Service to conceptualise progressive options aimed at the reduction and prevention of aspects of crime impacting the nation.

May 2019 marked a year since HADCO Group launched Creamery Novelties Limited, its ice cream manufacturing company. Being 100% locally-owned, the Group decided to examine the feasibility of expanding within the local market. An assessment showed that customers’ changing demands, the economic slow-down and the shortage of foreign exchange

to procure equipment to expand the range of novelties. The company exports to Antigua and Barbuda, Dominica, Guyana and Montserrat, and products will be available in other Caribbean countries before the end of the year. Creamery Novelties is not the first strategic investment made by HADCO Group on the local market. Imanex, the manufacturers of Happy Time ice cream cones; Ecoimpact, which recycles waste vegetable oil for export; and Land Ice and Fish, which exports tuna to the US, are other examples. HADCO Group continues to see opportunities for investment in the local market, especially in the manufacturing sector, and believes that future growth is in the diversification of its products and services.

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John Hadad Co-Chief Executive Officer, HADCO Group

meant that the Group needed to adjust its product offerings to include a local value brand that suited every pocket. Opportunities presented themselves in the ice cream sector. Although there were minor challenges in the initial set-up, with delays in approvals, construction, machinery and equipment, the idea was welcomed and facilitated by state agencies and private entities. These included InvesTT, the Environmental Management Authority, the Town and Country Planning Division, the Customs and Excise Division, and local banks for financing. Over the course of the year, Creamery Novelties thrived, notably contributing to the foreign exchange of the Group. The company employs over 109 persons and offers consumers ice cream and novelties in diverse flavours at an affordable price. Recently, we invested US$1.5 million

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Clive Fletcher Managing Director, Unicomer (Trinidad) Limited

Our investment in south Trinidad contributed significantly to the growth of our business footprint. In 2018, we established a premier facility for Courts, Courts Optical and the Ashley Furniture HomeStore at South Park – a total investment of over TT$25M, with 31,500 square feet of retail space

chamber.org.tt

DECEMBER 2019

Crime & justice

The rising cost of crime Trinidad and Tobago has spent more money on crime than any other country in the Caribbean and Latin America, according to an IDB study. The proportion of firms paying for security ranges from 44% in Saint Lucia to 85% in Trinidad and Tobago. How is the rising cost of crime affecting the private sector? by Pauline Anne Hamilton Security & risk consultant

Mapping the cost of crime

Crime is ubiquitous; it has adverse effects on all spheres of society. Even with constrained economic resources, government must therefore continue to invest heavily in control measures, which are traded off against spending on other critical public services such as healthcare, education, utilities, infrastructure, social services and public sanitation. Criminality distresses citizens as well as the private sector, which reports that there is scarcely any business which has not been impacted by crime. Criminal actions are commonly divided into five main categories: property, inchoate (such as solicitation and conspiracy), statutory, personal, and financial. Every crime produces undesirable consequences for the victim, whether psychological, physical, financial, or a mix of these; and they can be short- or long-term.

Beyond the costs of being victimised, 70% of regional firms reported spending money on security, including equipment, insurance, personnel, and professional security services. On average these expenses accounted for 2.4% of annual sales

DECEMBER 2019

The financial impact of crime is felt strongly by the business community, since it increases the cost of doing business. There are two aspects of the economic impact of crime. At the primary level there are costs expended in the anticipation of crime, especially measures to circumvent it: locks, monitored alarm systems, CCTV surveillance, security officers, etc. There are also costs incurred as a consequence of crime, such as loss of property, medical expenses, and victim support. There is a cost to responding to crime too, involving the police, fire and ambulance services, prosecution, court proceedings, and legal fees. The secondary financial impact of crime takes into acccount the national economy, where it can discourage domestic and foreign direct investment, tourism, and economic growth. It can also reduce the quality of life and property values. The fear of crime often deters businesses from wanting to expand or continuing to operate in certain geographic areas. Even businesses operating in relatively crime-free zones may experience a decline in patronage as citizens are reluctant to venture out, especially after dark. The costs incurred by businesses when they put in place measures to mitigate against crime can send the cost of goods and services to the customer spiralling upwards, resulting in reduced sales. Or, if these costs are borne by the operator, they reduce profitability and can eventually lead to smaller companies going out of business.

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Figure 1:

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229.52

400

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Trends in the Caribbean The 2017 IDB report, The Costs of Crime & Violence, New Evidence and Insights in Latin America and the Caribbean, states that nearly one in four Caribbean businesses (23%) reported losses due to theft, robbery, vandalism or arson. While the percentage of businesses that suffer losses is relatively high in the region, the average amount lost (2.3% of annual sales) is lower than the Latin American and

Trinidad & Tobagoâ&#x20AC;&#x2122;s crime epidemic

Caribbean regional average (3.6%) and the international average (4.8%). Beyond the costs of being victimised, 70% of regional firms reported spending money on security, including equipment, insurance, personnel, and professional security services. This is substantially higher than the world average in the World Bank Enterprise Survey (55.6%). On average these expenses accounted for 2.4% of annual sales. The portion of firms paying for security in the Caribbean ranged from 44% in Saint Lucia to 85% in Trinidad and Tobago, the highest in the region. Most firms reported

costs (US dollars per capita in Latin America and the Caribbean, 2014) Source: The Costs of Crime & Violence, New Evidence and Insights in Latin America and the Caribbean, Inter-American Development Bank, 2017. Most of the data referenced in the study relates to the period 2010 to 2014.

GUATEMALA

PARAGUAY

HONDURAS

ECUADOR

URUGUAY

COSTA RICA

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ARGENTINA

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335.07 PERU

284.86

344.95 MEXICO

302.49

354.09 JAMAICA

420.78 COLOMBIA

379.57

438.18 BARBADOS

460.99

600.74 EL SALVADOR

520.89

613.27 BRAZIL

637.07

688.56

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1200

Business profile Crime-related

spending on alarm systems, security cameras, and gates. At the time of the study the local detection rate was also the lowest in the region, 13%, which was extremely low and declining. Public expenditure on crime per capita was highest in Trinidad and Tobago at US$460.60 per capita per annum, which was more than double the regional average of US$194.50. Trinidad and Tobago also had the highest crime-related costs in the entire Caribbean and Latin American region at US$1,189 per capita per annum, and the third highest as a percentage of GDP at 3.52%.

Table 1: Selected offence indicators which may impact the private sector, 2018-14

Offence

2018 2017 2016 2015 2014 An increase in crime and violence in Trinidad and 2,017 2,176 2,187 2,111 2,592 Tobago, particularly since 2000, has intensified Burglaries & break-ins perceptions of insecurity among citizens and 540 568 1,016 592 223 businesses. Table 1 shows fluctuations among key Fraud offences offences, over a five-year period. General larcency 2,054 2,153 1,952 1,870 2,364 Between 2014 and 2018, robberies in Trinidad and Tobago increased by 21%, and fraud offences Kidnapping for ransom 20 6 3 4 3 by 142%. There was a fall in burglaries and breakins, general larceny and larceny of motor vehicles Larcency of motor vehicles 573 785 647 785 742 (see Figure 2). There are no data available to better Robberies 3,239 2,913 2,595 2,469 2,672 understand the impact on the workforce/businesses of crimes committed against employees. Source: Trinidad & Tobago Police Service, http://ttps.gov.tt/ Crime in Trinidad and Tobago takes a heavy toll on the private sector in terms of costs. Often overlooked is the collateral damage From 2014 to 2018, robberies in Trinidad incurred by the victim, whether individual or business. In the case of a business and Tobago increased by 21%, and fraud offences by 142%. Conversely, there was the internal business loss might be $20,000 from a safe, but the external or a fall in burglaries and break-ins, general true loss would include the cost of repairing or replacing the safe, replacing the larceny and larceny of motor vehicles broken door or window through which entry was gained, replacing any destroyed

chamber.org.tt

DECEMBER 2019

Crime & justice

Private sector initiatives Apart from the effects of crime on the private sector, what causes crime? And what can be done to deter potential criminals? The most readily accepted theories cite parental neglect, alcohol and drug abuse, lack of education, poverty, the influence of gangs, unemployment, and a dwindling middle class. All these factors are clearly evident in our society and are likely to be contributing factors to crime. But what should be done about them, and by whom? Is the

DECEMBER 2019

3,500 3,000 2,500 2,000 1,500 1,000 500 0

Burglaries & break-ins

Fraud offences

2018

2017

General larceny 2016

Kidnapping for ransom 2015

Larceny of motor vehicles

Robberies

2014

Figure 2: Growth in selected offence indicators which may impact the private sector, 2018-14 Source: Trinidad & Tobago Police Service, http://ttps.gov.tt/

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government doing enough to curb crime? The local justice system is plagued by processing delays, long backlogs, and low conviction rates. Just as we harden targets to protect them and deter criminals, why are we not making crime itself more unattractive to criminals by improving their chances of arrest and conviction and increasing the impact of penalties? ss re Community outreach d E xp is one way of working with atrisk youths. The Trinidad and Tobago Police Service, in collaboration with corporate leaders, has established about 113 youth clubs across the country. These provide training, education and recreation for young people, many of whom are offered part-time employment during school vacations by businesses. A number of them have even gone on to become permanent employees. Effective rehabilitation can change the mind-set of prison inmates by improving self-esteem and the ability to fit into society after serving their sentences. Without the skills and knowledge to lead productive lives, they often leave these institutions Cou

electronic surveillance systems, and the cost of further hardening the target. On top of all that comes the likelihood of an increase in insurance premiums. In Trinidad and Tobago, the local corporate community invests heavily to protect businesses, especially during the hours of darkness: is it possible that this could motivate criminals to become more brazen and operate by day, as the effort to reach the target is too great at night? This seems to be the trend, more and more businessrelated crimes are taking place in daylight during business hours, such as the attempted robbery at Trincity Mall which took place at 1pm on a busy Saturday in October this year. The fear created by daylight crime can result in more consumers shopping on international websites, thereby decreasing the market share of local businesses. Other trends in Trinidad and Tobago are carjacking and credit and debit card skimming: both have been around for a while but appear to be on the rise, and are also contributing factors to growth in online shopping which can be done relatively safely at home. Last yearâ&#x20AC;&#x2122;s report from the Office of the Financial Ombudsman showed an increase in account and transaction complaints from the banking public, referring mainly to unauthorised transactions such as card-skimming.

While 85% of Trinidad and Tobago businesses spent money on security, the highest in the region, at the time of the study the local detection rate was the lowest in the region even more committed to a life of crime. Over the years, the Trinidad and Tobago Chamber of Industry and Commerce, with the aid of the private sector, has established over 500 neighbourhood crime watch groups across the country; this project is still ongoing. Conspicuous signs are erected in the community, with residents monitoring the neighbourhood and reporting back any suspicious activity. The general consensus of the business community and the broader populace is that there needs to be a more concerted effort by government to address crime which, if allowed to continue unchecked, will damage Trinidad and Tobagoâ&#x20AC;&#x2122;s long-term economic sustainability, FDI levels and access to a skilled workforce.

Business profile

Courtesy Oscar Francois Ltd.

Jacqueline Francois extends her fatherâ&#x20AC;&#x2122;s legacy Last year Oscar Francois celebrated 60 years in business. As executive chairman, Jacqueline Francois is paving the way for the next generation. While balancing business, family and volunteer commitments has been challenging, she has successfully left her mark on all these areas by Jade Cumberbatch Freelance writer

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SEPT 2019

Business profile

Jacqueline Francois does not dwell on challenges. She sees what has to be done and does it. As a woman in business, Jacqueline says she always overcompensates by being extra prepared for everything. She gets her hands dirty and leads by example so no one can question her knowledge, skill or authority.

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Jacqueline Francois receiving a long service award from Oscar Francois Ltd

Oscar Francois: a pioneer

Jacqueline is now the executive chairman of Oscar Francois and managing director of the manufacturing company Intersol Limited, which her father co-founded

About Oscar Francois Ltd • Founded in 1958 by Oscar H. Francois • Started as a prescription medication distribution company supplying doctors, hospitals, and pharmacies • The veterinary division for animal pharmaceuticals was formalised in 1965 • In 1967, Oscar Francois co-founded the manufacturing and export company Intersol Ltd. • Also in 1967, the company expanded into distribution of personal care products, with manufacturing and distribution of the Fabergé line of fragrances • Today, Intersol manufactures a range of cosmetics and personal care products, including the Diquez and Day ‘n Nite brand. It exports to several countries including Barbados, Belize, Bermuda, Dominica, Guyana, Jamaica, St Lucia, St Kitts & Nevis, St Vincent & the Grenadines, and Suriname • Oscar Francois has locations in Port of Spain, Arima, Chaguanas, and La Romain • It added surgical instruments, professional haircare products, fertilisers, insecticides, and veterinary medicine and health drugs to its product line • Oscar Francois employs 180 persons, while Intersol employs 25

DECEMBER 2019

“Overcompensating was my dad’s advice. He felt that the best preparation he could do with his four daughters was to give us a tertiary education outside of Trinidad and Tobago. He wanted us to not just have a sound education but exposure to other cultures.” Jacqueline’s father, Oscar H. Francois, first started off by helping to establish a pharmaceutical distribution department within a major company, working there for 17 years before moving on to start up his own business. She recounts how, when he met her mother, he wanted to get married. He also wanted financial stability, so he took what he knew best and started Oscar Francois Limited out of a personal desire for independence and independent decision-making. Jacqueline Francois is now the executive chairman of Oscar Francois and managing director of the manufacturing company Intersol Limited, which her father co-founded. She started working part-time with both companies at the age of 17, and was employed at Oscar Francois after graduating from the University of Western Ontario with a degree in computer science. “After graduating I joined the family business so I could learn it from scratch, because my father had a heart attack in my first year of university. He recovered well, but it brought some reality that I’m the eldest and I more than likely had to help my mum. “There was no point in time that I did not want to be part of the business. Making them proud and making my contribution to the family was definitely central to my motivation. Having said that, my sister Jasmine and I have always said we have been so fortunate that we love what we do.”

Building a business In 1958 Oscar Francois started with the distribution of prescription drugs. Over the years, the business expanded to include over-the-counter drugs and veterinary drugs. Eventually it expanded further into distribution of personal care products with the manufacture of the Fabergé line of fragrances at Intersol. In the mid-90s, Jacqueline was personally responsible for the introduction and growth of the agricultural side of the business, providing fertilisers and seeds as well as organic solutions to farmers. She also launched a motor vehicle security division in 1990, which was sold earlier this year. Oscar Francois continued to expand the personal care line, moving beyond shampoos, conditioners and styling products to introduce products and training for professional hairdressers. The medical department also introduced surgical instruments for public and private operating theatres. In addition, in 1998, when Unilever purchased the Fabergé line, Intersol began manufacturing Alberto VO5, TCB, and Motions hair products. As she moved through the various departments of both companies, Jacqueline had to learn fast, make quick decisions and adjust to new circumstances. She learned about markets, export sales, technical information about vehicle security and other subjects on-the-go through workshops, personal reading, private tutors,

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Business profile and even returning to school to earn an MBA in Business at the UWI-Arthur Lok Jack Global School of Business (UWI-ALJGSB). “This degree exposed me to human resource management and organisational design and development, in which I developed a keen interest. I immediately saw the benefits of adopting some of these practices.” As a result, upon assuming the role of CEO in 2000, Jacqueline made the development of her team a primary focus as she grew and re-shaped the business. “We invested heavily in managerial and staff development by training our leadership in change management techniques, and sponsoring cross-functional teams who planned and executed process improvement projects. We have been very pleased with the results. “I have grown as a businessperson, learning from numerous mentors over the span of my career. Therefore I also love to share my knowledge and experience, and have gained a great deal of joy in leading the charge of investing in the development of our team. I have received immense satisfaction from seeing the growth of each team member.”

Achieving balance Jacqueline’s fast-paced life of business and learning has led to a lot of personal sacrifice, not just for the good of the family’s businesses, but also to give back to the country. She volunteered to represent the Trinidad and Tobago Chamber of Industry and Commerce on several Cabinet-appointed committees, including the HIV/AIDS Coordinating Committee and the Drug Advisory Committee. Jacqueline was also a mentor with the UWI-ALJGSB BizBooster Incubator programme where she coached female micro entrepreneurs. She also headed the Membership Committee of the Powerful Ladies of Trinidad and Tobago (PLOTT) for five years. She continues to actively contribute to the Holy Name Past Pupils Association through various committees, and recently helped organise a career day for Form Four students. For the past six years, she has been a volunteer catechist at St Finbar’s Roman Catholic Church where she teaches confirmation. And for the past year she has been the coordinator of several programmes at the church – baptism, first communion, confirmation, and the Rite of Christian Initiation of Adults. “God is at the centre of my life. God has graced me with an extremely caring mother who has very high standards, not just for me but for each of her children, grandchildren and the people she comes into contact with. And a father who was very open with his tutelage, particularly his experiences.” Jacqueline is very close to her siblings, thankful for her wonderful brothers-in-law, and thoroughly enjoys her three nieces and four nephews, who she admits that she spoils. Her love of family also means that, while she may get

Who is Jacqueline Francois? She is executive chairman of Oscar Francois Ltd and managing director of Intersol Ltd. At the age of 17 she started working part-time with both companies while still attending school. In 1981 she graduated from the University of Western Ontario with a degree in computer science and was permanently employed at Oscar Francois. From then to 1983 she worked in the accounts, customs, and information technology departments of both companies. In 1983 she became the export sales representative for Intersol. In 1985 she took on the role of sales and marketing manager for the personal sales division at Oscar Francois. That year she also joined the Trinidad and Tobago Chamber of Industry and Commerce’s (TTCIC) pharmaceutical committee. She became vice-chairman of the committee in 2009 and eventually became chairman before the committee was disbanded. In 1990 she became the pharmaceutical director at Oscar Francois. She then completed her Executive MBA at the UWIALJGSB, and became the deputy managing director at Intersol in 1994. In 2000 she became CEO of Oscar Francois, and held the position for 17 years. That year she also became and remains managing director of Intersol. In 2013 she was elected a director of the TTCIC. Since 2017 she has been the executive chairman of Oscar Francois.

tired and stressed at times, she has never regretted working in the family business or wanted to go elsewhere.

The future On the business side, things have been challenging as a result of the local economic climate. Jacqueline says demand is down in some areas, though growing in others. There has been some growth in the export market however, as Intersol recently launched Diquez Baby Lotion, which has been well accepted locally and internationally. In the area of chronic disease medicines, Jacqueline says, business is becoming more costly because of delays created by inefficiencies in the system, waiting for approvals, and other time-related factors. “Every transaction costs more money. Because of that, we are constantly looking at becoming more and more efficient so we could keep costs down and pass savings on to the consumer.” Despite these challenges, Jacqueline is looking forward to the future. Oscar Francois already manages sales and marketing efforts for a few international companies, and she would like to see the business move beyond manufacturing and distribution into added services. “My role as executive chairman for the last two years has really been about building that foundation for growth while the rest of the executive team takes care of the day-to-day operations. I am certainly looking forward to seeing the fruits of my labour.”

chamber.org.tt

DECEMBER 2019

chamber.org.tt

Growth and learning corner

The Chamber's growth and learnING corner

What have you read, watched or listened to lately that has contributed to your growth and development as a businessperson? Lara Quentrall-Thomas Chairman, Regency Recruitment and Resources Limited

Brené Brown, researcher and author, focuses on shame, empathy and vulnerability and the effect they have on the way we build relationships. I particularly identified with her presentation at 99U, an education platform, on “Why your critics aren’t the ones who count”. She discusses the idea that taking risks and moving forward as a professional requires courage, and that courage has consequences. If you are brave enough to put yourself in the arena and take risks, you may encounter failure or criticism. Sometimes the harshest critic is yourself. You have to learn not to compare yourself to others and to value the work that you do. The video is also about which critics you listen to, and how to weed out those who

may not have your best interest at heart. She says if someone is sitting on the sidelines and has not done the work, put in the effort or taken the risk, if they are not in the arena or have not walked that journey, then I should not be interested in their feedback. When you put yourself out there you are vulnerable, and with vulnerability comes fear, anxiety, and also a pathway to creativity, love and joy. It takes courage to show up, to be seen, to be heard. Courage has consequences both good and bad, all of which are learning experiences you grow from. View the video here: https://www.youtube.com/watch?v=8-JXOnFOXQk

Jillian Martin Chief Executive Officer, Davyn Limited

Recently, I came across an article by Amy Morin, a psychotherapist, on developing mental strength: “Mentally strong people: the 13 things they avoid”. This list of things which strong individuals should not do really spoke to me as an entrepreneur: 1. 2. 3. 4. 5. 6. 7.

Waste time feeling sorry for themselves Give away their power Shy away from change Waste energy on things they can’t control Worry about pleasing others Fear taking calculated risks Dwell on the past

8. Make the same mistakes over and over 9. Resent other people’s success 10. Give up after failure 11. Fear alone time 12. Feel the world owes them anything 13. Expect immediate results.

The point which particularly resonated with me was “not to give away my power”. This is critical because, as business leaders, how we respond to situations in the workplace impacts everyone around us. We have to be able to manage our actions and emotions in order to effect the right outcomes. Rather than shy away from challenging workplace interactions, we should stay mentally strong, step forward, and avoid giving others the power to make us feel inferior or bad. You can change the dynamic of any situation by controlling your behaviour: your strength is your ability to manage the way you respond. Read the article here: https://www.forbes.com/sites/cherylsnappconner/2013/11/18/mentally-strong-peoplethe-13-things-they-avoid/#6337b52a6d75

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DECEMBER 2019

Growth and learning corner

The Chamber's growth and learning corner

What have you read, watched or listened to lately that has contributed to your growth and development as a businessperson? Roanna Maraj Managing Director, ShupHub.com

Dame Anna Wintour is a British-American journalist and editor who has been editor-inchief of Vogue since 1988 and artistic director for Condé Nast, Vogue's publisher, since 2013. She is one of my mentors – a businesswoman who has dominated the industry she works in. In a podcast leading her first Master Class for leadership and creativity, she said: “You are driven by your heart, by your talent, and you are driven by your instinct … and if you start to look at what people are doing to the left of you or to the right of you, you are going to lose that clarity of thought! Own your decisions, and own who you are, but without apology ...” This quote resonates with me as I am learning that I need to work “twice as hard” as a female entrepreneur, and to be focused, determined, creative in my thinking. There are lots of people out there who will say “no”; I have to figure out how to get around that, believe in my gut feeling/instincts, and not be afraid to firmly demand what I want – and make it happen! Listen to the podcast here: https://www.masterclass.com/classes/anna-wintour-teaches-creativity-and-leadership

DECEMBER 2019

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DECEMBER 2019

How businesses operate

The value of corporate governance Corporate governance is improving globally, but not by enough. Investors, shareholders and citizens are demanding greater accountability and transparency. Spurred by legislative and financial obligations, this should produce positive changes in the next decade

by Shelly Ann Mohammed Head, ACCA Caribbean

Corporate governance continues to advance in global importance and relevance. As the former Group Chief Legal Officer of CL Financial, working with the government on the restructuring of the company, I saw firsthand how the collapse affected the Caribbean. The importance of good corporate governance was never more apparent. In response to a number of high-profile corporate failures in the United States, rules affecting corporate governance were overhauled. The introduction of the Sarbanes-Oxley Act in 2002 established sweeping auditing and financial regulations for public companies. Aspects of this overhaul have found their way into the legislation of many other jurisdictions.

Erosion of trust Debates on corporate governance remain heavily focused on public companies and regulated organisations, which represent a small fraction of economic activity in most countries. This is particularly true in Trinidad and Tobago, where private and family-owned businesses dominate. Corporate governance is the framework of rules and practices that direct how businesses operate, and ensure there is the highest possible accountability, transparency, integrity and sustainable success. ACCA (the Association of Chartered Certified Accountants) has been conducting research on corporate governance since 2012, under a global initiative called â&#x20AC;&#x153;Culture and channelling corporate behaviourâ&#x20AC;?. In the 2008 global financial crash, many companies who were compliant with rules and regulations were still caught in the crisis. This demonstrated very clearly that regulation and corporate governance mechanisms failed to prevent dysfunctional

DECEMBER 2019

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behaviour from spreading and seemingly thriving businesses from collapsing. Business scandals, public inquiries and corporate wrongdoing continue to make headlines in Trinidad and Tobago, and underscore the need to strengthen the interface between corporate governance and ethics. Trust has been eroded across a range of sectors, from politics to the media to business, and society now demands more accountability.

Impact of organisational culture ACCAâ&#x20AC;&#x2122;s research shows that culture is often driven from the top: our political as well as corporate leaders have responsibility for ensuring that values are lived and breathed throughout society and in every organisation. A number of institutions such as the Organisation for Economic Co-operation and Development (OECD), and locally the Corporate Governance Institute, are promoting greater transparency, enhanced board effectiveness, greater protection of shareholder rights and improved stakeholder accountability. It is imperative that state-owned agencies, private family-operated businesses and publicly traded companies understand that corporate governance has positive effects on trust, confidence, credibility and reputation, which can lead to long-term value creation and investor confidence. External corporate governance consists of mandatory and voluntary codes, reports and frameworks such as company law, stock market listing rules and accounting and auditing standards. According to the World Economic Forum, Trinidad and Tobago still has a lot of work to do in this area (see Table 1). Internal corporate governance is about how such external governance is complied with and embedded within the culture

How businesses operate

and values of the organisation, and how sound governance is implemented and works in practice. The corporate governance framework can play its part in providing a structure for governing the behaviour of companies and their officers. However, external rules, regulations, and codes of practice are not effective unless a climate of compliance is established within organisations. Embedded within companies, there also needs to be a culture recognising the responsibilities and duties of management with regard to the legitimate rights of their stakeholders and shareholders. Effective corporate governance is about promoting a climate of transparency, scepticism and objectivity, by creating systems, procedures, and internal structures. The aim is compliance with external requirements, but also preempting and dissuading anti-stakeholder behaviour from deep within the organisation.

Table 1: Trinidad and Tobago’s 2019 Economic Profile – selected corporate governance indicators

Index component

Rank/141

Strength of auditing and accounting standards

Conflict of interest regulation

Shareholder governance

Source: Global Competitiveness Report 2019, Klaus Schwab, World Economic Forum, http:// www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf

Effective corporate governance is about promoting a climate of transparency, scepticism and objectivity, by creating systems, procedures, and internal structures

Rebuilding trust Trust matters, and in Trinidad and Tobago it is at an alltime low. The Centre for Public Impact (CPI), a foundation of the Boston Consulting Group, works to rethink how governments around the world can increase the impact of their corporate governance policies and programmes. In CPI’s view, legitimacy is a central pillar in achieving policy outcomes and producing impact.

Figure 1: Number of governance factors (26 in total) disclosed in public companies’ 2017 annual reports

Compliance To International Quality Factors, Associated With Effective Governance 25 23 22 21

21 20

18 16

15 13 12 11 10

10 9

5 4

3 2

UNILEVER

READYMIX

PLIPDECO

GUARDIAN MEDIA

SCORE OUT OF

NEL

ANSA MERCHANT BANK

NGL

L.J. WILLIAMS

BERGER

ANSA MCAL

TCL

WITCO

OCM

RBL

ANGOSTURA

NFM

AGOSTINI

PRESTIGE HOLDINGS

GUARDIAN HOLDINGS

SCOTIABANK

CIBC

MASSY

JMMB

FCB

GRACE KENNEDY

NCB

SAGICOR

COMPANY Source: https://newsday.co.tt/2018/12/13/tt-companies-get-failing-grade-on-corporate-governance-standards/

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DECEMBER 2019

2030: Corporate governance

Recommendations for stateowned businesses

Recommendations for familyoperated businesses

State boards should be held responsible and accountable for ensuring the highest standards of corporate governance, and should be expected to serve the interests of their stakeholders, including the government as a shareholder, and the taxpayer. The corporate governance of state-owned enterprises (SOEs) should be a key priority for Trinidad and Tobago. It can result in significant economic gains and increase competitiveness.

Family-owned businesses underpin Trinidad and Tobago’s economy, and face unique performance and governance challenges as they grow from generation to generation. A McKinsey study showed that around the world only 30% of family businesses survive into the third generation of ownership. Among the factors that ensure success is strong governance of the company. It is important to have a board with independent external directors and a separation between ownership and management. This helps to complement the family’s knowledge with fresh strategic perspectives from qualified outsiders. If these challenges are managed, family-owned and -operated businesses can endure and prosper for generations.

When SOEs underperform, there is a high economic, financial and opportunity cost for the wider economy. It diverts scarce public sector resources and taxpayers’ money away from much needed social sectors which can directly benefit the poor. In Trinidad and Tobago, governance challenges include highly politicised state boards, and lack of autonomy by management in dayto-day operational decision-making. A lack of corporate governance in state-owned entities can be a source of corruption. Government should develop a structured transparent process for board nominations, to ensure that directors are appointed who have the required experience and range of competencies to perform corporate governance roles, to guide strategy and oversee management.

More than ever, therefore it is the responsibility of professionals such as lawyers, corporate secretaries and accountants to call out unethical behaviour

DECEMBER 2019

CPI’s research shows that governments struggle to achieve desired outcomes when the public does not trust state institutions. Publicly traded companies and conglomerates have traditionally performed better at corporate governance. For example, in 2019 Ethical Boardroom, a global governance magazine and website, recognised the Massy Group from Trinidad and Tobago as having the “best corporate governance” amongst Caribbean companies in the conglomerate category. In December 2018 the UWI-Arthur Lok Jack Global School of Business (UWIALJGSB), in collaboration with the Clarkson Centre for Business Ethics and Board Effectiveness at the Rotman School of Management, University of Toronto (CCBE), released the results of a study on the status of corporate disclosure practices among publicly listed companies on the Trinidad and Tobago Stock Exchange (TTSE). Figure 1 shows that companies scoring well were predominantly financial institutions, insurance companies and conglomerates. Conversely, two groups which make up a significant portion of business in Trinidad and Tobago but often lack good corporate governance are state-owned agencies and family-owned businesses. More than ever, therefore it is the responsibility of professionals such as lawyers, corporate secretaries and accountants to call out unethical behaviour. The fight against corruption must start at the top with a clear commitment from our leaders. The principles of corporate governance and ethics need to be embedded in our daily lives, as any perceived lack of trust negatively impacts business performance and lowers investor confidence.

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Courtesy Slimdown 360

 Jody White, founder of Slimdown 360, participated in 2018’s Pitch@Palace, a UK entrepreneurship programme

Following similar US-based models, Slimdown 360 delivers portioncontrolled, nutrition coachrecommended breakfast, lunch and dinner (over 100 items) as well as fitness coaching, lectures, and access to an online community that encourages members on their path to a healthy lifestyle

Meet the food innovators This time the spotlight falls on food manufacturers Slimdown 360 and Del Mano Food. Both embrace local ingredients, creating sustainability in their supply chains. Here their founders reflect on how they changed careers and found their passion in the world of agro-processing by Jeanette G. Awai Freelance writer



A range of healthy, meal delivery options by Slimdown 360

Slimdown 360 Nine years ago, Jody White’s job as a pharmaceutical manager was being made redundant. “I had two options: look for a job or open a business.” Thus the concept of his company Slimdown 360 emerged. “I couldn’t find a job, so I started Slimdown 360 as a low-calorie meal delivery weight loss service.” At the time, the dominant meal delivery service (MDS) was, and still is, fast food, which has been linked to an increase in non-communicable diseases (NCDs). According to the Ministry of Health’s National Strategic Plan for the Prevention and Control of NCDs: Trinidad and Tobago: 20172021, Trinidad and Tobago has one of the highest rates globally for NCDs. Heart disease accounts for 25% of deaths annually, followed by diabetes (14%), cancer (13%), and cerebrovascular disease (10%). Slimdown 360’s meal delivery service helps provide a convenient healthy alternative for customers. Following similar US-based models, Slimdown 360

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DECEMBER 2019

Innovation in business delivers portion-controlled, nutrition coach-recommended breakfast, lunch and dinner (over 100 items) as well as fitness coaching, lectures, and access to an online community that encourages members on their path to a healthy lifestyle.

About Slimdown 360 •• Started in 2010 as a low-calorie meal delivery service

Sustainable agro-processing

•• Headquarters are located in Balmain, Couva

As founder and managing director of Slimdown 360, White’s desire to change the food industry didn’t stop there. “My goal was to enter retail manufacturing, but I didn’t know what type of products I wanted to create. •• Slimdown 360 manufactures sweet potato and cassava pastas, fries and instant mashed However, I wanted to keep it sustainable.” powders; gluten-free flours in cassava, sweet The answer to White’s search was grounded in indigenous potato, breadfruit, rice; as well as dried fruit root crop staples, literally. “The concept of sweet potato •• In 2018, Slimdown 360 won the inaugural pasta was first tested for a number of years. Then in 2017 it Duke of York’s Pitch@Palace People’s Choice was finally launched along with cassava pasta and instant award out of 42 participants mashed provisions.” •• Its products can be found on local grocery Slimdown 360’s innovative product line has since shelves, and worldwide including mainland expanded to include fries, gluten-free flours and dried fruit, USA plus Hawaii and Puerto Rico, all made with local produce. According to White, “Our sweet France, Germany, Italy and the UK; also on potato fries are of a better quality and 30% cheaper than Amazon.com imported ones. Our pastas are a leading gluten-free option •• You can sign up to get a free fitness on Amazon, and we supply roughly 95% of sweet potato assessment, and purchase Slimdown’s tailored and cassava flour in Trinidad and Tobago.” MDS packages individually or as part of a corporate programme, at www.slimdown360. A strong presence in mass media and social media, along com. You can also purchase Slimdown 360 with government incentives, have contributed to Slimdown products at https://shopslimdown360.com/ 360’s growth. White’s desire to create healthy Caribbean •• Slimdown 360 posts recipes, weight loss food options and revolutionise the local agricultural success stories and more on their Facebook industry remains unchanged. and Instagram pages and their YouTube “We exported Trinidad and Tobago’s first ever channel, @slimdown360 container load of sweet potato and cassava •• You can also start your fitness journey fries, having processed around 20,000 by joining the “Trinbago Goes on a Diet” pounds in eight days. I can source raw drive, funded by Slimdown 360, at www. trinbagogoesonadiet.com. Here they tally the materials from abroad, but it’s nice to weight loss of all participants to provide an know that if I buy from ten farmers official Trinidad and Tobago tally. locally, that’s ten families impacted. There are a lot of challenges in the Del Mano Food is agro-processing sector that I know my products can help solve.” •• Today, it has 10 permanent employees and additional contract workers as needed

nearing the end of an expansion project aimed at increasing production capacity and availability across the country

“Our sweet potato fries are of a better quality and 30% cheaper than imported ones. Our pastas are a leading glutenfree option on Amazon, and we supply roughly 95% of sweet potato and cassava flour in Trinidad and Tobago”

courte

sy D

Del Mano Food Do you know what goes into your sausage? If you’re eating a Del Mano artisanal sausage, you can rest assured that it’s made from high-quality ingredients and 100% passion. Founder Stefan Grosberg doesn’t hide what’s in his handmade local sausages or what it took to create them. Prior to establishing Del Mano Food, Grosberg always had an interest in the sector, but wasn’t able to pursue it right away, choosing instead to follow his family’s business – engineering. “I studied chemical engineering at the University of Bath and worked at Chevron Texaco as part of a course, but I knew I wanted more. I wanted a ‘green’ job where I would help to build a better society. I started Del Mano because I recognised the value of high-quality, real food. It was founded entirely on passion.” Through travel, Grosberg was exposed to artisanal markets, and so he embraced the idea of starting small, using local ingredients to create superior products. From its humble beginnings in 2013, Del Mano Food was not afraid to carve its own niche.

DECEMBER 2019

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 Del Mano Food’s chorizo sausages, made with herbs and paprika

Courtesy Del Mano



Innovation in business

Stefan Grosberg, owner of Del Mano Food, displays his handcrafted artisan sausages

Through travel, Grosberg was exposed to artisanal markets, and so he embraced the idea of starting small, using local ingredients to create superior products

About Del Mano Food ••

••

Grosberg says: “When we first started making pesto, the local market was used to ‘green seasoning’, but we wanted to experiment with different herbs and pressed on. Similarly, we introduced premium, fresh sausages to the market which differed greatly from what was readily available such as hot dogs.” Del Mano was also the first to introduce local gourmet sausages such as Spicy Chorizo and Geera Pork.

••

Positioned for growth As a manufacturer, Grosberg sources local inputs where available. Ideally, he would like to produce products made entirely of local ingredients grown to high standards and levels of wholesomeness. Going artisanal can come at a high cost. “The paprika we make costs 2.5 times more to make than to import from Spain. That shows how far as a country we still have to go in the agricultural sector. We are strong believers in integrating a local supply chain and achieving food security, but there are enormous challenges in working with Trinidad and Tobago’s food supply structure.” Still, Grosberg remains hopeful, thanks to the company’s loyal customers, many of whom have supported the brand since it was launched at UpMarket, a food and craft market. “Customers appreciate our high quality, and have ultimately become our brand promoters, sharing it with family and friends.” Del Mano Food is nearing the end of an expansion project aimed at increasing production capacity and availability across the country. Look out for the redesigned Del Mano brand and packaging, the opening of a factory, and continued growth in retail spaces across Trinidad and Tobago.

••

Del Mano Food was started in 2013 and is owned and operated by Stefan Grosberg. It is headquartered in Port of Spain It sells 15 types of sausages made from a variety of meats, including pork, beef and lamb, as well as limited specialty and custom flavours. It also sells fresh pesto which uses local ingredients The sausages are all-natural; they contain no additives, preservatives or fillers You can find Del Mano artisanal sausages in the freezers of Adam’s Bagels, Bloom’s Imports, Bodega – Sips, Snax & Stuff, Fresh, Massy Stores, Malabar Farms, RT Morshead, Simple Choice Mart, SuperPharm, Starlite Pharmacy, The Happy Gourmet, and through their website www.delmanofood. com Del Mano supplies many restaurants and cafés: V & J Brauhaus, Chaud Café & Wine Bar, Cazabon Wine and Cocktail Bar, Buzo Osteria Italiana, Pêche Pâtisserie, Rizzoni’s Ristorante Italiano, Dianne’s Tea Shop, Five The Eatery, Drink Lounge & Bistro, Taste, Amore Mio, Upicktt, Woodford Café, Whipped, and Island Beer Chill & Grill

You can also find them on Facebook and Instagram pages: @DelManoFood.

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DECEMBER 2019

Top 5 facts

top 5 facts

Courtesy Ramps Logistics

Shipping in Trinidad and Tobago by Ramps Logistics Ltd.

1. Which sector accounts for the greatest tonnage to and from Trinidad and Tobago? According to the Ministry of Trade and Industry’s brochure on the maritime sector, the energy sector accounts for the greatest tonnage to and from this country. The maritime sector is a major contributor to the economy of Trinidad and Tobago and plays a key role in supporting both the energy and non-energy sectors. Trinidad and Tobago’s connectivity to regional and global markets, its healthy export base, vibrant energy sector, and low fuel rates are some of the factors that make this country an attractive maritime location. Trinidad and Tobago has two major cargo ports: the port of Port of Spain and the port of Point Lisas. They are among the most highly developed in the Caribbean. The country also has liquid, dry bulk and liquefied natural gas (LNG) handling facilities.

2. How much did TEU cargo grow in 2018 at the key commercial ports in Trinidad and Tobago?

3. How does Trinidad and Tobago score on the World Bank Liner Shipping Connectivity Index (LSCI)? The liner connectivity of ports has a large impact on the costs of container transport in the Caribbean. The World Bank maintains an index called the Liner Shipping Connectivity Index (LSCI) which tracks the level of connectivity to global shipping networks. With an LSCI score of 12.36 in 2018, Trinidad and Tobago is only outranked by The Bahamas and Jamaica among Englishspeaking Caribbean markets.

DECEMBER 2019

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

Table1: Container cargo movements in Trinidad, In 2018 the port of Port of Spain 2017-18 recorded an increase of 6% in the throughput of containerised cargo. Port 2017 2018 TEUs (Twenty-Foot Equivalent Units) increased from 252,159 Port of Spain 252,159 267,752 i n 2 01 7 t o 2 6 7 , 7 5 2 i n 2 01 8 . Figure 1 shows that at the port of Point Lisas there was an increase of Point Lisas 162,498 170,951 5% in containerised cargo throughput for 2018 when compared with 2017. In 2017, 162,498 TEUs were handled, compared with 170,951 in 2018. This not only indicates growing volumes of exports and imports but, more importantly, greater capacity and processing capability at local port facilities. The collective processing of an extra 20,000+ TEUs in a year is commendable.

Ramps Logistics shipment in progress

Figure 1: Growth in TEUs at key commercial ports in Trinidad & Tobago 300,000

250,000

200,000

150,000

1 00,000

50,000

Port of Spain 2017

Point Lisas 2018

Top 5 facts

top 5 facts

According to a 2016 Caribbean Development Bank report, Trinidad is one of the best connected countries in the region with 24 services.

4. What effect do delays have on shipping costs and charges? Demurrage is a fee assessed on cargo that exceeds its allotted â&#x20AC;&#x153;freeâ&#x20AC;? time at the terminal. The standard free time is 4-5 days. Once that expires, a daily storage fee (demurrage) is charged until the cargo is removed from the terminal. Daily demurrage charges in Trinidad and Tobago range from US$75 to US$150 per container per day for the first five days or so. Charges generally increase the longer the cargo stays at the terminal. Delays in obtaining external agency releases can result in a backlog of imported containers, causing higher demurrage charges which lead to increased costs for importers of goods.

5. What is the proportion of domestic to transhipment business in Trinidad and Tobago?

The energy sector accounts for the greatest tonnage to and from this country

With an LSCI score of 12.36 in 2018, Trinidad and Tobago is only outranked by The Bahamas and Jamaica among English-speaking Caribbean markets

According to a 2016 Caribbean Development Bank report, Trinidad is one of the best connected countries in the region with 24 services

Some of the largest transhipment ports in the world are located in the Caribbean basin, and transhipment is an important aspect of the container transport industry in the region. Shipping lines use the hub-and-spoke system to optimise supply chain cost and network coverage. Trinidad and Tobago, strategically located away from the hurricane belt and between key trade routes connecting North and South America, is an ideal transhipment point. It is also located 2,200 kilometres away from the Panama Canal. The average proportion of domestic to transhipment business in Trinidad is 60% and 40% respectively. With the resurgence of oil in the Caribbean, drill ships are constantly being moved through regional waters. Additionally, companies producing commodities across South America experience great difficulty in getting products out of Guyana and Venezuela, mainly due to old port infrastructure and inadequate river draughts. In fact, most exports from Guyana are currently transhipped through Trinidad. Trinidad and Tobagoâ&#x20AC;&#x2122;s naturally sheltered harbour in the Gulf of Paria, and its advanced maritime capabilities and industry support, provide a good foundation for the expansion of this sector.

chamber.org.tt

SEPT 2019

Advertorial

EXPORT DEVELOPMENT AGENCIES There are several institutions (state enterprises/agencies) in Trinidad and Tobago that can assist exporters in their endeavours. However, many businesses may not be aware of these export development agencies and their roles and functions. Here’s a summary of three major institutions in Trinidad and Tobago that provide trade support services: 1. Ministry of Trade and Industry (MTI) This entity is responsible for growing trade, business and investment. Here are some of the services they provide: • Business Development Directorate Responsible for: a. Building and maintaining strategic alliances with traderelated industries b. Reviewing and monitoring systems for the integration of business c. Identifying areas for improvement with stakeholders. • Policy and Strategic Directorate Responsible for: a. Collecting, analysing and disseminating data and information regarding trade, business and investments b. Giving advice on new and existing policies and trade agreements. • Trade Directorate Responsible for: a. Negotiating trade agreements b. Implementing trade agreements c. Developing National Export Strategy and policies.

UNITS Trade Implementation Unit: implements national obligations for all trade agreements and the National Aid for Trade Strategy. They also serve as a national contact for regional cooperation. Fair Trading Unit: provides protection to industries from incidents of unfair trade practices which may range from under-pricing of goods to a sudden increase in the volume of goods exported. Trade Licensing Unit: responsible for administering the import and export of goods; their objectives are to facilitate investment and promote trade through government policies. The import/export section conducts investigations, submits reports and issues licences with respect to goods subject to import/export control. When exporting goods on the export negative list an export licence must be obtained prior to shipment of the item from Trinidad and Tobago.

2. The National Export Facilitation Organization of Trinidad and Tobago (EXPORTT) EXPORTT is tasked with catering to the needs of exporters and generating export growth and diversification in the non-energy goods and services sectors. They provide a comprehensive range of services to exporters to increase the number of exporters and deliver value for money. The various services available are: a. Training Unit: this unit offers exporter training which involves planning and coordinating the execution of training programmes which build the capacity of exporters to increase export competitiveness, develop new exporters and increase access to new markets. It focuses on building the capacity of the country’s exporters to master the essentials of an export strategy. Whether it be new or existing exporters, all initiatives are designed to equip exporters with skills to win new business and/or generate export leads. b. Capacity Building and Programme Financing: this unit focuses on ensuring that companies have export-ready products and services to enter international markets and production processes which support export growth. The capacity building activities include a range of exporter training programmes, international standards certification programmes and co-financing of export related costs. c. Monitoring and Research: provides market intelligence on virtually any market in the world. d. Enabling Environment Certificate of Origin: this is where you can obtain documents declaring that goods being exported are of a certain origin and qualify for preferential treatment or duty-free access in accordance with the relevant Rules of Origin. 3. Ministry of Finance (MOF) Here you can obtain information on how to export from and import goods into Trinidad and Tobago. Examples of information readily available are: documents required to export locally manufactured products, how to export, and licensable exports.

Export-Import Bank of Trinidad and Tobago Limited (Eximbank) Exim House #30 Queen’s Park West Port of Spain (868) 628-2762/1382 eximbank@eximbanktt.com www.eximbanktt.com

State of the nation

Economic outlook Globally, the impact of Brexit remains uncertain in the UK, and closer to home, Latin America continues to experience slow growth. The Chamber also considers the impact of Hurricane Dorian on the Caribbean, and forecasts Trinidad and Tobago’s performance in the fourth quarter by Kimberly Browne Project Assistant, Trade and Business Development Unit, Trinidad and Tobago Chamber of Industry and Commerce

Latin America

by category 5 Hurricane Dorian. 4According to Bloomberg, According to the World Economic Forum, despite analysts expect Dorian to have a substantial impact on the Latin America’s attempt at poverty reduction and the insurance industry. Data from the 5Insurance Information implementation of political reform initiatives, economies Institute shows that the industry lost US$25 billion, which within the region continue to experience slow growth. would make Dorian the most expensive natural disaster Between 2000 and 2016, GDP has averaged 2.8% per year, since 2017’s Hurricane Maria. well below the average of 4.8% in 56 other emerging The government of The Bahamas has received the first economies of the world (excluding China). tranche of a cash payout of nearly US$11 million from 2 the Caribbean Catastrophe Risk Insurance Facility (CCRIF). In August 2019, the International Monetary Fund (IMF) The Bahamas has three tropical cyclone policies with revised its 2019 economic growth forecast to 0.6% from CCRIF, each covering part of the 700-island archipelago the 1.4% which was forecast in April 2019. As this growth (northwest, southeast and central). continues to be unevenly distributed within the region, analysts suggest According to the World Economic Additionally, The Bahamas has already provided assurances that its foreign that, for growth to become stabilised Forum, despite Latin America’s currency reserves are not under threat and dynamic, inclusive economies attempt at poverty reduction and despite the negative impact of Hurricane should incorporate and support the implementation of political Dorian. medium-sized firms in order to foster According to the governor of the competition and harness the spending reform initiatives, economies within the region continue to experience Central Bank of The Bahamas, John of middle-class consumers, which slow growth Rolle, reserves may be impacted next could create much-needed demand. year, but will not be completely depleted This can be achieved by harnessing as the rebuilding on Grand Bahama and in the Abacos the power of new digital technologies such as FinTech. begins. This is likely to be mitigated somewhat by the Easing of economic development will erode Latin reinsurance flows that will benefit The Bahamas in the wake America’s rate premium over United States policy rates, which is a key driver of foreign capital inflows into local of the disaster, and by loan funds borrowed by the state. stocks and bonds. For example, Brazil is experiencing its In Guyana 6ExxonMobil made a recent oil discovery in the Stabroek Block offshore, at the Tripletail-1 well in the lowest rate on record; at the same time, Chile and Colombia Turbot area. This discovery adds to previous estimates of show the narrowest rate in over ten years. more than 6 billion oil-equivalent barrels in the Stabroek The Caribbean Block. 3 7 In the Caribbean, economic prospects are generally 2019 oil finds are expected to have a major impact on improving, but with substantial variation across countries. the country’s socioeconomic development amidst ongoing Growth is expected to strengthen to around 2% in political uncertainty. To mitigate the chances of suffering 2019-2020, influenced by reconstruction from the 2017 under the resource curse that has affected other oil-rich hurricanes, and supported in tourism-dependent economies countries, Owen Verwey, CEO of the Guyana Office for by still strong growth in the US, the main market for tourism Investment, notes that the country’s energy officials are in the region. meeting regularly with officials from Scotland and the In September 2019, parts of The Bahamas – especially Canadian province of Newfoundland and Labrador, to the Abaco Islands and Grand Bahama – were devastated discuss policy, regulation, enforcement and development. 1

chamber.org.tt

DECEMBER 2019

State of the nation

Growth in the Caribbean is expected to strengthen to around 2% in 2019-2020, influenced by reconstruction from the 2017 hurricanes, and supported in tourism-dependent economies by still strong US growth, which is the main market for tourism in the region

The IMF’s revised GDP growth forecast for Latin America and the Caribbean remains sluggish (see Table 1). The figures reflect elevated domestic policy uncertainty in some large economies, heightened US-China trade tensions, and the region’s effect on lower global growth.

The domestic landscape: Trinidad and Tobago Prior to the national budget reading on 7th October 2019, the business community expressed concern regarding TT$6 billion owed in VAT refunds, the forex shortage, and the need to improve the ease of doing business. 10 Trinidad and Tobago’s economic activity in 2019 was slow-moving in the second quarter, following what analysts expected to be a healthy turnover from Q1. In Q2, there was a decline in LNG and natural gas production as well as overall cement sales. In Q3, annual LNG output rebounded, while private spending increased with a rise in local vehicle sales. Moreover, Carifesta, a 10-day arts festival held in August 2019, should have provided a one-time boost to tourism. Trinidad and Tobago should expect slower growth in Q4 due to lower crude output and weaker global growth. 9

Table 1: Latin America and the Caribbean — real GDP growth at market prices (%)

Projected

Latin America & the Caribbean

Revised

2019

2020

2019

2020

0.8%

0.6%

2.3%

Source: International Monetary Fund (IMF)

DECEMBER 2019

chamber.org.tt

State of the nation

Trinidad and Tobago should expect slower growth in Q4 due to lower crude output and weaker global growth. However, the Angelin project (offshore gas production sanctioned by bpTT) and government spending should help support the economy However, the Angelin project (offshore gas production sanctioned by bpTT) and government spending should help support the economy. Strained commodity prices along with the crisis in Venezuela continue to pose risks to Trinidad and Tobago’s economic development. Focus Economics panellists predicted growth of 1.4% in Q4 2019, unchanged from the August 2019 forecast, and 1.6% in 2020 (see Table 2). 11

Table 3: United Kingdom: real GDP growth at market prices (%)

Projected

United Kingdom

Revised

2019

2020

2021

2019

2020

2021

1.3%

1.0%

1.2%

0.8%

1.2%

Source: British Chambers of Commerce

GDP growth forecast for 2019 and 2020 reflect a weaker outlook for investment, trade and productivity. This is also affected by the lack of clarity over the outcome of Brexit and deteriorating global economic conditions.

Table 2: Trinidad and Tobago: GDP Growth at market prices (%)

References 2019

2020

1.4%

1.6%

Source: Focus Economics

Global outlook In September 2019, oil prices surged by nearly 20% after two drone attacks on Saudi Arabian facilities shut out more than 5% of the world’s supply. About 50% of Saudi Arabia’s oil output was affected, or 5% of daily global oil production. It could take weeks before the facilities are fully back on line. Future impacts are still to be ascertained as the energy minister, Prince Abdulaziz bin Salman, stated that some of the fall in production would be made up by reserves. Brent crude, the international benchmark used by oil traders, increased to US$71.95 a barrel at one point. US oil prices also spiked, but both trimmed gains as US president Donald Trump authorised the release of US reserves. 13 In other trends, data from Germany and China showed that the current trade wars seem to be problematic for financial markets as manufacturing-dependent economies face the challenges of future development, while the bond market fears the possibility of an American recession. Stocks and commodities tumbled in Europe and the US as risk-averse investors raced to the safety of government bonds, pushing bond prices sharply higher and yields to low levels not seen in years. The British Chambers of Commerce latest economic forecast downgraded growth expectations for the United Kingdom in 2019 to 1.2% (from 1.3%) and to 0.8% (from 1.0%) for 2020. Its GDP growth forecast of 1.2% remains unchanged for 2021 (see Table 3). While the leading business group expects that the UK economy will avoid a technical recession and return to modest growth in the third quarter, downgrades to its 12

Remes, Jaana, et al. “What Happened to Latin America's 'Missing Middle'.” World Economic Forum, 23 Aug. 2019, www.weforum.org/agenda/2019/08/latin-americafill-missing-middle-economy-digital-tech/ 2 McGeever, Jamie. “Latin America Lacks Ammunition to Fight Global Economic Slowdown.” Reuters, Thomson Reuters, 20 Aug. 2019, www.reuters.com/article/U.S.-latameconomics-recession-analysis/latin-america-lacks-ammunition-to-fight-global-economic-slowdown-idU.S.KCN1VA1YH 3 Werner, Alejandro. “Outlook for Latin America and the Caribbean: A Stalling Recovery.” IMF Blog, 29 July 2019, blogs.imf.org/2019/07/29/outlook-for-latin-america-andthe-caribbean-a-stalling-recovery/ 4 Hadfield, Will. “Hurricane Dorian Likely to Cause $25 Billion of Losses, UBS Says.” Bloomberg.com, Bloomberg, 2 Sept. 2019, 6:05 am, www.bloomberg.com/news/articles/2019-09-02/hurricane-dorian-likely-to-cause-25-billion-of-losses-ubs-says 5 “Facts + Statistics: Hurricanes.” Insurance Information Institute, Sept. 2019, www.iii. org/fact-statistic/facts-statistics-hurricanes 6 “ExxonMobil Announces Oil Discovery Offshore Guyana at Tripletail.” Manchester Times, 16 Sept. 2019, www.manchestertimes.com/news/bU.S.iness/exxonmobil-announces-oil-discovery-offshore-guyana-at-tripletail/article_ef8d0f04-61a3-510bb946-06efe3a25326.html 7 Guthrie, Craig. “Guyana Tipped for Another Find.” Petroleum Economist, 6 Sept. 2019, www.petroleum-economist.com/articles/upstream/exploration-production/2019/ guyana-tipped-for-another-find 8 Alejandro. “Outlook for Latin America and the Caribbean: A Stalling Recovery.” IMF Blog, 29 July 2019, blogs.imf.org/2019/07/29/outlook-for-latin-america-and-thecaribbean-a-stalling-recovery/ 9 Kowlessar-Alonzo, Geisha. “New Measures Needed for Sustainable Economic Growth – Trinidad Guardian.” Digital Publishing Software, Guardian Media, 10 Sept. 2019, edition.pagesuite.com/popovers/dynamic_article_popover.aspx?artguid=f8dbadf4d97a-4c04-9a18-d4de524f11fc&appid=3352&fbclid=IwAR1mG1Pd52Kg9e3J0D8X WNaWxpAC3qhIZzCDc5Zhqtx3pkxLvAKIuT-euF8 10 FocusEconomics. “Trinidad & Tobago Economy – GDP, Inflation, CPI and Interest Rate.” FocusEconomics | Economic Forecasts from the World's Leading Economists, 10 Sept. 2019, www.focU.S.-economics.com/countries/trinidad-tobago 11 “BCC Forecast: Business Investment and Productivity Sinking amid Brexit Stalemate and Global Slowdown.” British Chambers of Commerce, 16 Sept. 2019, www.britishchambers.org.uk/news/2019/09/bcc-forecast-bU.S.iness-investment-and-productivity-sinking-amid-brexit-stalemate-and-global-slowdown 12 “Oil Prices Soar after Attacks on Saudi Facilities.” BBC News, BBC, 16 Sept. 2019, www.bbc.com/news/business-49710820 13 Phillips, Matt. “Stock Markets, Jolted by Economic Worry, Suffer 2nd Worst Drop of 2019.” The New York Times, The New York Times, 14 Aug. 2019, www.nytimes. com/2019/08/14/bU.S.iness/stock-market-today-bond-market.html 14 “BCC Forecast: Business Investment and Productivity Sinking amid Brexit Stalemate and Global Slowdown.” British Chambers of Commerce, 16 Sept. 2019, www.britishchambers.org.uk/news/2019/09/bcc-forecast-business-investment-and-productivitysinking-amid-brexit-stalemate-and-global-slowdown 1

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DECEMBER 2019

Energy update

Energy update by Reagan Stroude Research Officer, Trade and Business Development Unit, Trinidad and Tobago Chamber of Industry and Commerce

Local crude oil and natural gas production and usage ➤ As can be seen in Figure 1, when comparing Q2 data from 2018 and 2019, between the top three producers there was an average decline in oil production of approximately 17%. Over the same period there was a modest decrease in natural gas output of approximately -7.4% (Figure 4). Figure 3 also shows that the LNG sector continues to be the major user of natural gas locally, utilising an average 56% of total production

Fig. 1: Top oil producers (avg. bopd) 18,773

15,713 12,553

11,524

10,071

9,605

2019

2018

HPCL (offshore) HPCL (land)

Perenco

HPCL (offshore) HPCL (land)

Perenco

Fig. 2: Imports vs exports of crude oil (barrels) N/A

7,992,239

5,584,365

2,242,026 Q2

2018

2019 Imports

➤ Comparing Q2 data of 2018 and 2019, it can be seen in Figure 1 that HPCL (offshore) has remained the top oil producer for this period, despite a significant decrease in output compared to 2018 figures. It is important to note that during Q4 of 2018, the domestic oil reﬁnery was closed, leading to oil imports being halted for that period; this is shown in Figure 2.

Imports

Exports

Fig. 3: Natural gas utilisation by sector Q2 2019 (avg. mmscf/d)

Fig. 4: Top local natural gas producers Q2 2018 vs Q2 2019 (avg. mmscf/d)

LNG 1855 Ammonia 564

3,324

2,103

BPTT

Power 262

1,743

Other 67

538

507

Shell

EOG

2018

Methanol 532

Iron & Steel 44

Exports

684

489

2019 BPTT

Shell

EOG

Source: MEEI Consolidated Reports 2018 & 2019

DECEMBER 2019

chamber.org.tt

Energy update

Comparing Q2 data of 2018 and 2019’s production and export levels for energy and downstream products Natural gas production (mmscf/d)

➤ A comparison between 2018 and 2019 shows that overall natural gas production levels declined significantly in the months of April and June of 2019, when compared against 2018 date for the same time period.

Crude oil condensate production (bopd)

3.7

3.6

3.5

3.4 3.3 3.2 3.1

58 56

April ➤ With the exception of urea, downstream products generally showed slight improvements over their 2018 values for the periods shown.

2019

3.9 3.8 Thousands

➤ Crude oil condensate production over Q2 of 2019 remained deflated when compared with 2018 figures.

4.0

2018

May

June

Ammonia production (mega tonnes)

April

May

June

Ammonia exports (mega tonnes)

Thousands

. 500 450 400 350 300 250

500 450 400 350 300

200 150 100 50 0

April

May

June

250 200 150 100 50 0

April

May

June

Methanol exports (mega tonnes)

Methanol production (mega tonnes) 600

Thousands

520

500

400

480 460

300

440

200

420

100

400 380

April

May

June

Thousands

May

June

Urea exports (mega tonnes)

Urea production (mega tonnes) 70

64 63 62 61 60 59 58 57

60 50 40 30 20

55 54

April

May

June

April

May

June

Source: MEEI Consolidated Reports 2018 & 2019

chamber.org.tt

DECEMBER 2019

The Chamber and its members

Welcome, new members! The Chamber extends a warm welcome to companies and individuals who have become members in recent months

Services Ltd. Real estate services & vacation rentals 234-2785 efil.edsrealestate@outlook.com

companies, manpower supply and associated services, procurement and real estate 627-5664 dale.lutchman@rampslogistics. com

Ecotox Environmental Services Ltd. Environment and occupational testing services 672-6620 md@ecotoxes.com

The Customer Experience Co. Ltd. Design, develop and deliver customer service strategies 290-2000 chelsea@excott.com

El Dorado Offshore Trinidad Ltd. Customs brokerage, operational ground support for international

ASSOCIATE MEMBERS Lyndi Jordan aurorabitayson@gmail.com

Constellation Development

DECEMBER 2019

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Your choice in ICT solutions and services across the Caribbean, Central & South America.

Group PBS Unit 23, Fernandes Industrial Centre, Eastern Main Road, Laventille Trinidad & Tobago Tel: +1 (868) 624-4776 / 299-0070 Ext. 288 Cel: +1 (868) 763-5560 www.grouppbs.com ww Facebook: Group PBS