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Styrofoam businesses in the dark

…fear job losses
Sunday, August 12, 2018

Local manufacturers/suppliers of styrofoam (Expanded Polystyrene or EPS) products are questioning their fate after Government announced an immediate ban on the importation of all products into T&T last month and a plan to phase out the manufacturing of the product locally by next year.

Making the announcement in July, Planning Minister Camille Robinson-Regis assured business owners they would be given time to make their products environmentally friendly. Although they have until the last quarter of 2019 to get things in order, businessmen are calling for clarity from the Government on the way forward.

Business operators said they have been left in the dark while a committee was set up consisting of importers of alternative packaging while no local manufacturers were ever consulted or asked to join that committee even after making several attempts to contact the ministry.

Styrofoam, which is non-biodegradable and has been cited as a danger to marine and wildlife, is said to be one of the top contributors to flooding as it is disposed of improperly.

Chief Executive Officer of R&C Enterprises Limited Niall Legerton and general manager Kevin Mohamed last week appealed for guidance as they remained unclear about several issues.

They expressed concern that this move could negatively impact the 250 staff members and also set them back financially as millions of dollars have already been invested into the 20-year-old business.

R&C Enterprises Limited is one of four local manufacturers involved in the importation, manufacture, and supply of plastic, paper, and styrofoam products.

The operators said while styrofoam was not biodegradable, it was recyclable and it was a process already underway at their firm.

A report obtained by the Sunday Guardian estimated that the local styrofoam industry employed just over 400 people and that firms in the industry had invested upwards of $65 million during the period 2011 to 2016. With a total asset base of close to $30 million, the industry had generated approximately $5.6 million (TT) in revenue in 2016.

The report which outlined the socio-economic impacts the ban on styrofoam would have on the food and beverage industry stated that “Banning styrofoam packaging for food and beverage containers outright would mean that local manufacturers of these products would have to switch their production methods and source new inputs to produce more environmentally friendly packaging which could impact their earnings, employment levels, and added costs of developing new products and production methods.

“This adjustment will take some time and will affect the pricing of such products which are retailed and used as food containers in the food service industry. Indirectly, a ban on styrofoam containers will also affect those in the distribution sector which transports and distributes these products to the end users and retailers.

“The effect will not only be felt by distributors that import these products to sell locally but also to the end users in the restaurant/food service industry’s cost and pricing structure as they would now switch new environmentally friendly containers.”

A document published by the Organisation of American States on sustainable alternative packaging to replace EPS foam containers in T&T, showed that 57.79 per cent of styrofoam containers sold were produced in T&T, with the remainder being imported from the Dominican Republic, Jamaica, and the US.

Businessman Barry Fakoory, a plastics manufacturer for the packaging industry (who does not sell styrofoam) said asking manufacturers to convert their facilities was not cheap and could cost upwards of $50 million.

When New York banned styrofoam there was an exemption clause for smaller businesses with annual revenues of less than US$500,000 or $3.5 million (TT) if they can prove they would be unduly harmed financially.

Fakoory asked whether the Ministry of Planning was proposing to remove duties on alternative packaging products and what impact it would have on the country’s already depleted foreign exchange.



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