T&T Free Zone Company Ltd (TTFZ) expecting to rake in as much as US$250million in new foreign direct investment (FDI) before the end of the year. So far the company has managed to draw international investments amounting to US$110 million. The first investment of US$65 million was signed off in April, under the former Trade Minster Stephen Cadiz with Bredero Shaw Middle East Ltd (BBSMEL)- a Canadian pipe coating company. The US$65 million pipeline coating project was the first of several large projects the ministry and TTFZ have lined up for 2012, Cadiz had stated. The second FDI signing took place last Friday under Trade Minister Vasant Bharath at the Ministry of Trade, Port-of- Spain, with Oldendorff Carriers T&T Ltd investing US$45 million. In a an interview on Tuesday, CEO of TTFZ Keith Chin said T&T is becoming more attractive to international companies due to its strategic location.
Chin said Olendorff, a German company with 90 years of shipping experience, signed a ten-year license agreement with TTFZ. TTFZ's focus is to attract FDI via the non-energy sector and the transshipment business is one of the lucrative markets targetted to draw in those investments, Chin explained. In light of Olendorff's global reach, Chin said the company is poised to bring in a great deal of revenue. He said the international shipper, which has regional branches, transports materials like iron ore out of South America countries like Brazil and, because of T&T's geographic location and proximity to other potential markets, it can be used as a transshipment point to ship smaller loads. "There are a lot of markets in the North that are focusing on the southern markets and vice versa, so T&T can be used as a springboard to facilitate that interest." For example, he said, it is easier for Nestle, which is a free zone enterprise, to bring in large international shipments and then transport to the smaller markets in the region utilising the free zone initiatives. Chin said Bredero Shaw has began its operation and is providing its pipeline coating services to energy and offshore companies. Bredero Shaw's main raw material is cement, which is supplied by Trinidad Cement Ltd.
More FDI to come
Besides these two FDI agreements, Chin said TTFZ is in discussions with both local and multi-international companies that are looking to invest millions of dollars in T&T. "We are probably looking at a US$250 million in investment, if everything goes as planned." Being very cautious with the information, as he did not want to preempt any arrangements, Chin said TTFZ is hoping to secure a service contract within the financial sector with a banking institution. The other one is an existing contract with Medullan Trinidad Ltd, which is looking to expand its software offerings and the other potential investments that came out of the India trip, where a few companies are interested in the ICT sector. In January, Prime Minister Kamla Persad-Bissessar together with several ministers and members of the business community went on a two- week visit to India. Chin said TTFZ, which has been in existence for about 20 years covers mainly the manufacturing sector, internal trade and services sector.
At present, he said, there are 19 enterprises registered to operate in the free zone, including Barana Seafood Processors Ltd-subsidiary of the National Fisheries, Bois Fleur Ltd- a textile company, Crown Lithography Trinidad Ltd based in Laventille, Ethylchem Ltd- an ethanol dehydration facility and Nestle T&T Ltd. He noted that TTFZ acts as a facilitator and offers fiscal incentives. However, he said one of the main criteria is that the company has to be export oriented. He said under the manufacturing sector, 75 per cent of the company's products and services must be for exports. For the services sector, it must be 50 per cent. Another key factor is that the company must employ and utilise local skills. Asked why he believes the TTFZ has been so low-keyed, he said, due to the dominant energy sector by which most of the FDI is generated, there has been little focus on the non-enegry sector. But now with the current administration paying more attention to the diversification of the economy, the TTFZ now has the opportunity to play a bigger role in the attracting investments. He admitted that for some time to come energy would still play a major role. He said TTFZ has already begun partnering with sister agencies like Export and Import Bank of T&T and Invest TT to bring in different investments and investors to see if they can fit in to the free zone.
What lies ahead ?
Chin, who has been at the helm of TTFZ for one year, said he believes that TTFZ is not where it should be and has room to grow. "The profile of TTFZ needs to be lifted and it requires us to be more proactive," adding that the free zone company would be seeking to specialise in certain areas of services, manufacturing and trade sectors. "We would be taking a closer look at the resources and focusing on our strengths." Similarly at the signing with Olendorff Carriers last Friday, the current Minister of Trade Bharath said that it was time for T&T to focus on its strengths to maximise its investments. He said for too long, T&T has been trying to be too many things to too many people. Chin noted that besides T&T being strategically located, the country has an educated workforce- internationally and locally trained and a stable environment. Chin said TTFZ does not depend on the Treasury and it is self-sufficient, whereby a small percentage is charged on each company's growth.