The chron­ic short­age of for­eign ex­change dom­i­nat­ed dis­cus­sions on day two of the Trade and In­vest­ment Con­ven­tion (TIC), as lo­cal man­u­fac­tur­ers high­light­ed to the Sun­day Busi­ness Guardian the ex­treme bank­ing hur­dles and par­al­lel mar­ket re­liance cur­rent­ly keep­ing their busi­ness­es alive.

While the con­ven­tion, host­ed by the T&T Man­u­fac­tur­ers’ As­so­ci­a­tion (TTMA), is de­signed to show­case trade op­por­tu­ni­ties, the re­al­i­ty on the ground for mid-sized and small­er do­mes­tic pro­duc­ers is a gru­elling dai­ly bat­tle to source hard cur­ren­cy.

Sameer Ali, a man­ag­er at Sesame Foods—a lo­cal man­u­fac­tur­ing com­pa­ny op­er­at­ing for 40 years, which has 80 con­trac­tu­al work­ers—re­vealed that se­cur­ing forex through for­mal fi­nan­cial in­sti­tu­tions has be­come prac­ti­cal­ly im­pos­si­ble.

Ali said man­u­fac­tur­ers re­ly heav­i­ly on im­port­ed raw ma­te­ri­als and there­fore re­quire a steady sup­ply of for­eign ex­change to main­tain op­er­a­tions.

He ar­gued that small­er man­u­fac­tur­ers are strug­gling to ob­tain US dol­lars through the bank­ing sys­tem, mak­ing it dif­fi­cult to pay over­seas sup­pli­ers and se­cure es­sen­tial in­puts.

“The banks ba­si­cal­ly have no mon­ey,” he said, adding that busi­ness­es are of­ten re­quired to pro­vide ex­ten­sive doc­u­men­ta­tion and col­lat­er­al when seek­ing ac­cess to for­eign ex­change.

Ac­cord­ing to Ali, many com­pa­nies have been forced to seek al­ter­na­tive ways of ob­tain­ing US cur­ren­cy be­cause of the short­age.

“The black mar­ket is the way to get forex right now. I think every sin­gle man­u­fac­tur­er, com­pa­ny, every­body does that right now,” he added.

He ex­pressed more con­cern that small­er man­u­fac­tur­ers are at a dis­ad­van­tage com­pared with larg­er im­porters and busi­ness­es in­volved in trad­ing fin­ished prod­ucts.

“It (forex) is too con­trolled in terms of who gets it and who doesn’t get it. Peo­ple know ex­act­ly who gets it. Man­u­fac­tur­ers don’t get any. Man­u­fac­tur­ers like my­self, we don’t get any. We man­u­fac­ture, we cre­ate jobs, we do every­thing for this econ­o­my, and there’s noth­ing be­ing done to rec­i­p­ro­cate the help,” he said.

Ali said main­tain­ing em­ploy­ment has be­come in­creas­ing­ly chal­leng­ing as for­eign ex­change con­straints af­fect the com­pa­ny’s abil­i­ty to im­port raw ma­te­ri­als and meet pro­duc­tion de­mands.

He de­scribed the cur­rent sit­u­a­tion as wors­en­ing, say­ing ac­cess to for­eign ex­change has be­come “al­most non-ex­is­tent.”

Look­ing ahead, Ali ex­pressed lit­tle con­fi­dence the is­sue would be re­solved in the near fu­ture and warned that pro­longed short­ages could have se­ri­ous con­se­quences for the busi­ness com­mu­ni­ty.

“I think if the forex sit­u­a­tion does not im­prove with­in the next cou­ple of years, a lot of busi­ness­es in Trinidad and To­ba­go will close down,” he said.

He said small­er busi­ness­es are like­ly to bear the brunt of the cri­sis, ar­gu­ing that lo­cal man­u­fac­tur­ers are be­ing side­lined de­spite their role in cre­at­ing jobs and sup­port­ing eco­nom­ic ac­tiv­i­ty.

The con­cerns were echoed by Ab­dul Khan, ex­port man­ag­er at RHS mar­ket­ing, known for its Karibbean Flavours brand, who said man­u­fac­tur­ers reg­u­lar­ly face chal­lenges when sourc­ing for­eign ex­change for ma­chin­ery pur­chas­es and sup­pli­er pay­ments. Khan, how­ev­er, said in­sti­tu­tions such as the Ex­im­Bank and com­mer­cial banks have as­sist­ed busi­ness­es where pos­si­ble, but man­u­fac­tur­ers are of­ten re­quired to wait for ac­cess to for­eign cur­ren­cy.

“If it is that we need to pay for cer­tain ma­chiner­ies or dif­fer­ent types of sup­pli­ers, some­times we don’t al­ways have it, so we’ll have to wait. We’ll have to join the queue...We are net forex own­ers on our own, but we don’t gen­er­ate it as fast as we would like to earn forex,” he ex­plained, not­ing that the com­pa­ny com­mis­sioned a new plant a cou­ple of months ago for condi­ments.

While ex­press­ing hope con­di­tions would im­prove, Khan de­clined to com­ment on the po­lit­i­cal as­pects of the is­sue.

“The Gov­ern­ment has been promis­ing it will get bet­ter for the busi­ness com­mu­ni­ty, and I would def­i­nite­ly like it to be bet­ter,” he said.

For some firms, ex­ports have be­come a crit­i­cal buffer against the short­age.

Kha­dine Ho­sein-Deane, fi­nance and ad­min­is­tra­tion di­rec­tor of Fresh Start Ltd, said the com­pa­ny has in­creas­ing­ly fo­cused on gen­er­at­ing its own for­eign ex­change to sup­port op­er­a­tions and re­duce re­liance on the lo­cal mar­ket.

“The need to gen­er­ate our own for­eign ex­change to con­tin­ue to get sup­plies from the re­gion is one of the rea­sons why we cre­at­ed Bard­dies (bar-qual­i­ty cock­tail mix­ers),” she said.

Ho­sein-Deane said the com­pa­ny sees ex­ports as a key av­enue for earn­ing for­eign cur­ren­cy need­ed to pur­chase raw ma­te­ri­als and sus­tain pro­duc­tion.

The forex short­age has al­so forced the com­pa­ny to be­come more strate­gic in man­ag­ing its fi­nances.

“When we do get the for­eign ex­change, you have to buy a lot at one time and some­times we may not have the cash flow avail­able to do that, but it’s some­thing that we have to man­age through,” she said.

Ac­cord­ing to Ho­sein-Deane, the short­age has had a di­rect im­pact on cash flow and in­ven­to­ry man­age­ment de­ci­sions.

One of the biggest chal­lenges in­volves im­port­ing raw ma­te­ri­als. She ex­plained where the com­pa­ny may pre­vi­ous­ly have im­port­ed a 40-foot con­tain­er of sup­plies, fi­nan­cial con­straints and lim­it­ed for­eign ex­change of­ten re­quire small­er pur­chas­es.

“Typ­i­cal­ly, we would be able to bring in a 40-foot con­tain­er and now we can on­ly af­ford to bring in a 20-foot con­tain­er,” she said.

While small­er ship­ments re­duce im­me­di­ate fi­nan­cial pres­sure, they al­so in­crease trans­porta­tion and lo­gis­tics costs.

“It means we have to bring in a 20-foot con­tain­er more of­ten and some­times, lo­gis­ti­cal­ly, it’s go­ing to dri­ve the cost of pro­duc­tion and the cost of raw ma­te­ri­als up,” she said adding, “It’s re­al­ly eat­ing away at our prof­its right now.”

De­spite the chal­lenges, Ho­sein-Deane said the com­pa­ny con­tin­ues to adapt while wait­ing to see whether broad­er so­lu­tions emerge.

“The most we can do is wait and see. In the mean­time, we con­tin­ue to try to see how best we can nav­i­gate through those wa­ters.”

Hol­i­day Snacks is an­oth­er ex­porter that ben­e­fits from earn­ing for­eign ex­change through sales abroad. How­ev­er, ex­port man­ag­er at Hol­i­day Snacks, Wayne Ram­s­ingh, said the com­pa­ny still faces dif­fi­cul­ties be­cause many of its pro­duc­tion in­puts must be sourced over­seas.

“It has been af­fect­ing us. Avail­abil­i­ty is re­al­ly some­thing that our busi­ness de­pends on,” Ram­s­ingh said, adding, “The good thing about us is that we do have a lot of ex­port mar­kets that kind of help us out be­cause we get our pay­ments in the US dol­lars.”

Even so, he not­ed that for­eign cur­ren­cy re­mains es­sen­tial for day-to-day op­er­a­tions.

“All of our raw ma­te­ri­als we have to pay for in the US, so it’s still a strug­gle.”

Ram­s­ingh de­scribed as hope­ful that the sit­u­a­tion would im­prove, but stopped short of ex­press­ing con­fi­dence that a res­o­lu­tion is im­mi­nent.

“I am very hope­ful. I can’t say I’m very con­fi­dent,” he said.

Mi­cro-en­tre­pre­neur Rochelle Belle­mare own­er of Kor ice cream bars, said the short­age is di­rect­ly af­fect­ing her abil­i­ty to op­er­ate her busi­ness and meet fi­nan­cial oblig­a­tions.

“My pack­ag­ing is sourced from Cana­da, so I have to pay in for­eign ex­change,” Belle­mare ex­plained, adding that her busi­ness, which has been op­er­at­ing since Ju­ly last year, re­lies on im­port­ed pack­ag­ing ma­te­ri­als, mak­ing ac­cess to for­eign cur­ren­cy crit­i­cal to main­tain­ing op­er­a­tions.

Belle­mare said the sit­u­a­tion has be­come even more chal­leng­ing be­cause she al­so has a busi­ness loan from an Amer­i­can bank which does not ac­cept pay­ment in TT cur­ren­cy leav­ing her with no choice but to re­ly on as­sis­tance from rel­a­tives abroad to help make pay­ments.

Look­ing ahead, she ex­pressed con­cern about ob­tain­ing for­eign ex­change to pur­chase her next ship­ment of pack­ag­ing ma­te­ri­als.

“Right now, I don’t know how I’m go­ing to get the for­eign ex­change to pur­chase my next or­der of pack­ag­ing.”

Asked whether she be­lieved the sit­u­a­tion had de­te­ri­o­rat­ed since start­ing her busi­ness, Belle­mare said the short­age had be­come sig­nif­i­cant­ly worse over the past year.

She al­so ex­pressed lit­tle con­fi­dence that re­lief is im­mi­nent.

“No, they haven’t been ad­dress­ing any­thing they promised,” Belle­mare said, when asked whether she be­lieved the Gov­ern­ment would re­solve the is­sue.

For re­tail­ers re­ly­ing heav­i­ly on im­port­ed goods, nav­i­gat­ing the for­eign ex­change short­age has be­come a bal­anc­ing act.

Dar­ri­an Ga­jad­har, a vi­sion screen­er at Op­tometrists To­day, ex­plained the scarci­ty of for­eign cur­ren­cy di­rect­ly re­stricts what com­pa­nies can af­ford to bring in­to the coun­try.

He not­ed the op­ti­cal sec­tor faces dis­tinct hur­dles, as the lim­it­ed forex al­lo­ca­tion dic­tates both the vol­ume and va­ri­ety of stock.

“For frames, yes. A lit­tle bit less now due to that crunch from the bud­get with the forex. We would not be able to bring in as fre­quent­ly or as quick as pre­vi­ous­ly,” he ex­plained, adding that or­ders for frames are now de­layed by a few months.

For new­er busi­ness­es, the pic­ture is some­what dif­fer­ent.

Car­los Lee, founder of Trop­i­cal De­hy­drates, said ac­cess to per­son­al US dol­lar re­sources has helped shield his com­pa­ny from the worst ef­fects of the short­age so far.

Lee, whose com­pa­ny pro­duces de­hy­drat­ed fruits and veg­eta­bles, di­vides his time be­tween T&T and the Unit­ed States af­ter spend­ing decades liv­ing and work­ing abroad.

“The forex is not af­fect­ing me as yet per se as ob­vi­ous­ly I have ac­cess to US dol­lars,” he said, not­ing that be­cause of that ac­cess, he has been able to pur­chase equip­ment and im­port items need­ed by his busi­ness us­ing per­son­al re­sources.

How­ev­er, he ac­knowl­edged the sit­u­a­tion could be­come more chal­leng­ing as the busi­ness grows.

“As my busi­ness con­tin­ues to grow, then yes, if they still have the same chal­lenges that we have now in ac­cess­ing it as a small busi­ness, then yes, it could be a chal­lenge that I have.”

Trop­i­cal De­hy­drates has been op­er­at­ing for about two-and-a-half years and has seen steady growth since its launch.

Lee said the first year fo­cused heav­i­ly on ed­u­cat­ing con­sumers about lo­cal­ly pro­duced de­hy­drat­ed fruits and veg­eta­bles.

“We spent a lot of time giv­ing away free sam­ples and so­cial­is­ing the prod­uct.”

By the sec­ond year, con­sumer aware­ness had in­creased, lead­ing to stronger de­mand and place­ment in gro­cery stores.

Now in its third year, the com­pa­ny is see­ing even greater mar­ket pen­e­tra­tion.