An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

With Guyana ex­pect­ing to be­gin pro­duc­ing elec­tric­i­ty from nat­ur­al gas as soon as next year, the coun­try’s man­u­fac­tur­ing sec­tor is po­si­tion­ing it­self to be­come the Caribbean’s next ma­jor man­u­fac­tur­ing hub.

Guyana plans to de­vel­op a nat­ur­al gas-based pow­er sys­tem that could cut elec­tric­i­ty costs by more than half from US$0.31 per kilo­watt-hour to rough­ly US$0.12, said pres­i­dent of the Guyana Man­u­fac­tur­ing and Ser­vices As­so­ci­a­tion (GM­SA) Rafeek Khan, in an ex­clu­sive in­ter­view with the Busi­ness Guardian on Mon­day evening.

He said Guyana’s push to low­er its en­er­gy costs will be a game chang­er for re­gion­al in­dus­try.

“It’s a no-brain­er,” Khan as­sert­ed. “Once we achieve that lev­el of en­er­gy cost re­duc­tion, com­pa­nies will be po­si­tion­ing them­selves in Guyana.”
He not­ed that while Trinida­di­an man­u­fac­tur­ers may not re­lo­cate en­tire­ly, many are al­ready eye­ing ex­pan­sion through satel­lite op­er­a­tions and joint ven­tures as Guyana’s in­fra­struc­ture and lo­gis­tics im­prove.

“Gov­ern­ment in­vest­ment in lo­gis­tics, road and riv­er net­works is low­er­ing costs. That’s a big draw,” he said.

Khan added that the shift to­ward cheap­er en­er­gy will be com­ple­ment­ed by new in­dus­tri­al op­por­tu­ni­ties, par­tic­u­lar­ly in fer­tilis­er pro­duc­tion. With Guyana’s hy­dro­car­bon sec­tor pro­vid­ing feed­stock, the coun­try could soon be­come a re­gion­al sup­pli­er rather than an im­porter.

“With the right part­ner­ships, Guyana could soon meet not just its do­mes­tic fer­tilis­er de­mand but al­so sup­ply the re­gion,” he ex­plained. “We im­port so much fer­tilis­er re­gion­al­ly; there’s no rea­son we can’t be self-suf­fi­cient.”
Speak­ing to the Busi­ness Guardian in Ju­ly, Guyana’s Pres­i­dent Dr Ir­faan Ali said the coun­try is de­lib­er­ate­ly po­si­tion­ing it­self to evolve in­to a ma­jor man­u­fac­tur­ing and in­dus­tri­al hub, ca­pa­ble of sup­ply­ing both lo­cal and ex­port mar­kets.
He ex­plained that the surge in con­struc­tion ac­tiv­i­ty and the ris­ing de­mand for ma­te­ri­als and goods are part of a broad­er strat­e­gy to trans­form Guyana’s econ­o­my. “We are build­ing the foun­da­tion for large-scale man­u­fac­tur­ing and in­dus­tri­al­i­sa­tion to meet grow­ing do­mes­tic needs and tap in­to re­gion­al and glob­al de­mand,” Dr Ali said.

Port de­lays

Al­ready, the coun­try’s man­u­fac­tur­ing sec­tor is ex­pand­ing faster than its in­fra­struc­ture can keep up, a re­al­i­ty that has cre­at­ed both chal­lenges and op­por­tu­ni­ties for re­gion­al trade.

One of the chal­lenges is that port de­lays in Trinidad are hav­ing a rip­ple ef­fect across Guyana’s en­tire econ­o­my, Khan said.

While he ac­knowl­edges that some in­ef­fi­cien­cies ex­ist with­in Trinidad’s port sys­tem, Khan in­sists that the is­sue is much broad­er, a re­gion­al and glob­al sup­ply chain squeeze col­lid­ing with Guyana’s rapid eco­nom­ic ex­pan­sion.

“Every sec­tor has dou­bled in size,” he ex­plained. “With that comes more con­sump­tion, more de­mand and a heav­ier re­liance on im­port­ed in­puts to man­u­fac­tur­ing.”

Man­u­fac­tur­ers in Guyana, Khan out­lined, re­ly heav­i­ly on im­port­ed raw ma­te­ri­als, in­clud­ing re­fined sug­ar and mo­lasses, as well as pack­ag­ing, chem­i­cals, and ma­chin­ery. These com­po­nents form the back­bone of lo­cal pro­duc­tion across in­dus­tries, from food and bev­er­age to phar­ma­ceu­ti­cals and forestry. But when ship­ments are de­layed, com­pa­nies are forced to ad­just.
“What you’re find­ing,” Khan not­ed, “is that firms that once car­ried three months’ in­ven­to­ry now have to dou­ble that, an­tic­i­pat­ing four- to five-week back­logs be­fore goods even reach George­town.”

These de­lays are com­pound­ed by in­creased con­sump­tion across the Caribbean, high­er trans­ship­ment de­mand through Trinidad and lin­ger­ing glob­al lo­gis­tics slow­downs. The re­sult is a more ex­pen­sive and un­cer­tain busi­ness en­vi­ron­ment, es­pe­cial­ly for small­er man­u­fac­tur­ers that can’t eas­i­ly ab­sorb ad­di­tion­al costs or main­tain large stock­piles.
Khan sees the con­ges­tion not just as a lo­gis­ti­cal is­sue, but as a sig­nal for deep­er re­gion­al re­form.

“We must be­gin plan­ning for a deep­wa­ter port in Guyana,” he says. “It’s not about re­plac­ing Trinidad but re­liev­ing pres­sure on the en­tire re­gion­al sys­tem.”

Forex is­sues

An­oth­er pres­sure point has been the re­gion­al short­age of for­eign ex­change, par­tic­u­lar­ly in Trinidad and To­ba­go. While Guyana’s econ­o­my is flush with oil rev­enue, the pri­vate sec­tor, which dri­ves man­u­fac­tur­ing and ser­vices, still needs ac­cess to US dol­lars for im­ports, equip­ment and ex­pan­sion projects.

“There’s a ma­jor de­mand in the mar­ket for for­eign cur­ren­cy now more than ever,” Khan ex­plains. “Every com­pa­ny that is ex­pand­ing needs it not just for in­puts, but for cap­i­tal­i­sa­tion.”

He warned that with­out suf­fi­cient in­flows of for­eign ex­change, busi­ness­es can be forced to de­lay growth or re­duce im­ports, ul­ti­mate­ly slow­ing down in­dus­tri­al ex­pan­sion. “Guyana should learn from Trinidad’s ex­pe­ri­ence,” he said. “When you don’t ex­port, you get in­to these chal­lenges. Every man­u­fac­tur­er needs to think about ex­ports.”

Build­ing joint ven­tures

De­spite the con­straints, Khan be­lieves that the re­gion is on the cusp of a man­u­fac­tur­ing re­nais­sance if it em­braces col­lab­o­ra­tion over com­pe­ti­tion. Guyana’s gov­ern­ment has made no se­cret of its in­ten­tion to at­tract in­vest­ment part­ner­ships, and the GM­SA has been ac­tive­ly pro­mot­ing op­por­tu­ni­ties for Trinida­di­an firms to col­lab­o­rate on projects in hous­ing, agri­cul­ture, agro-pro­cess­ing and re­new­able en­er­gy.

“Guyana plans to build 40,000 homes in the next five years,” Khan high­light­ed. “That’s 8,000 homes a year, and each one rep­re­sents a sup­ply chain op­por­tu­ni­ty.”

Through trade mis­sions and di­rect out­reach, the GM­SA has shared de­tailed lists of op­por­tu­ni­ties across mul­ti­ple sec­tors, urg­ing lo­cal firms to form con­sor­tiums with re­gion­al part­ners. The idea, Khan ex­plained, is for Trinida­di­an man­u­fac­tur­ers and ser­vice providers to team up with Guyanese com­pa­nies that have on-the-ground knowl­edge and ac­cess.
“Don’t go alone,” he cau­tions. “You’ll achieve greater re­sults by part­ner­ing with lo­cal busi­ness­es that bring the right skills to the ta­ble. But make sure it’s a com­mit­ted part­ner­ship not just one foot in, one foot out.”

Trade mis­sions have proven to be one of the most ef­fec­tive tools for con­nect­ing busi­ness­es across bor­ders.

Ac­cord­ing to Khan, who was the fea­ture speak­er for T&T Man­u­fac­tur­ers’ As­so­ci­a­tion’s Pres­i­dent Din­ner on Tues­day night at the Hy­att Ho­tel, Guyana now re­ceives a steady stream of del­e­ga­tions from across the Caribbean and be­yond, in­clud­ing Eu­rope, Asia, and Latin Amer­i­ca.

“In the last five years, we’ve seen per­haps 30 com­pa­nies form mean­ing­ful part­ner­ships,” he notes. “These are not just own­er­ship deals some are dis­tri­b­u­tion agree­ments, joint pro­duc­tion, or tech­nol­o­gy ex­changes.”

Guyana’s man­u­fac­tur­ing foot­print con­tin­ues to widen, with mem­bers of the GM­SA ac­count­ing for up to 90 per­cent of the coun­try’s man­u­fac­tur­ing GDP.

Large-scale pro­duc­ers such as Banks, Ster­ling Prod­ucts, and De­mer­ara Dis­tillers Ltd (DDL) re­main core mem­bers, but small­er en­ter­pris­es are al­so emerg­ing in the agro-pro­cess­ing and forestry sec­tors, help­ing to di­ver­si­fy Guyana’s non-oil econ­o­my.
“It’s a no-brain­er,” said Khan. “Once we achieve that lev­el of en­er­gy cost re­duc­tion, com­pa­nies will be po­si­tion­ing them­selves in Guyana.”

He be­lieves Trinida­di­an man­u­fac­tur­ers won’t nec­es­sar­i­ly re­lo­cate, but many will ex­pand their foot­print through satel­lite op­er­a­tions or joint ven­tures, es­pe­cial­ly as Guyana’s in­fra­struc­ture im­proves. “Gov­ern­ment in­vest­ment in lo­gis­tics, road and riv­er net­works is low­er­ing costs. That’s a big draw.”

The low en­er­gy cost will be paired with the de­vel­op­ment of com­ple­men­tary in­dus­tries such as fer­tilis­er pro­duc­tion. Guyana’s hy­dro­car­bon sec­tor is al­ready pro­vid­ing feed­stock for fer­tilis­er man­u­fac­tur­ing, an area Khan sees as ripe for col­lab­o­ra­tion.
“With the right part­ner­ships, Guyana could soon meet not just its do­mes­tic fer­til­iz­er de­mand but al­so sup­ply the re­gion,” he ex­plains. “We im­port so much fer­tilis­er re­gion­al­ly; there’s no rea­son we can’t be self-suf­fi­cient.”
Guyana’s Min­is­ter of Fi­nance Dr. Ash­ni Singh, speak­ing dur­ing Mon­day’s sit­ting of the Na­tion­al As­sem­bly, re­port­ed that the sec­tor grew by an es­ti­mat­ed 26.8 per cent in the first half of the year, fu­eled by strong per­for­mances across all sub­cat­e­gories, oth­er man­u­fac­tur­ing, rice and sug­ar. He not­ed that “oth­er man­u­fac­tur­ing” rose 30.8 per cent, re­flect­ing in­creased out­put of non-metal­lic prod­ucts, plas­tics, and phar­ma­ceu­ti­cals. Mean­while, rice man­u­fac­tur­ing ex­pand­ed by 12.4 per cent, and sug­ar man­u­fac­tur­ing surged by 136.7 per cent over the same pe­ri­od.

For the full year, Singh said the man­u­fac­tur­ing sec­tor is pro­ject­ed to grow by 14.9 per cent, un­der­scor­ing its role as one of the key non-oil dri­vers of Guyana’s rapid­ly di­ver­si­fy­ing econ­o­my.

At the same time, Guyana’s ex­porters are deal­ing with new tar­iff pres­sures from the Unit­ed States. Some GM­SA mem­bers have faced ad­di­tion­al du­ties that threat­en to erode com­pet­i­tive­ness in for­eign mar­kets.

Khan cred­its the Guyanese gov­ern­ment for step­ping in to ne­go­ti­ate re­lief mea­sures and help­ing com­pa­nies nav­i­gate com­plex tar­iff codes.

“Some busi­ness­es were pay­ing more than nec­es­sary be­cause of clas­si­fi­ca­tion er­rors,” he notes. “Un­der­stand­ing your har­monised codes can save mil­lions.”

The rise of US tar­iffs, com­bined with a trade im­bal­ance dri­ven by oil ex­ports, has al­so high­light­ed a need to sup­port non-oil sec­tors. “When your oil trade is fac­tored in­to the to­tal num­bers, it can dis­tort how the U.S. views your trade bal­ance,” Khan ex­plains. “That’s why we’re push­ing to sep­a­rate oil from tra­di­tion­al sec­tors when re­port­ing trade da­ta.”

Fix­ing re­gion­al busi­ness cli­mate

Even as Guyana races ahead with in­dus­tri­al growth, Khan is of the view that the en­tire Caribbean must con­front long-stand­ing ob­sta­cles to do­ing busi­ness, par­tic­u­lar­ly in­con­sis­tent reg­u­la­tions and phy­tosan­i­tary stan­dards.
“Gov­ern­ments across Cari­com have the po­lit­i­cal will,” he out­lined. “But when the de­ci­sions come down to tech­ni­cal of­fi­cers, the im­ple­men­ta­tion slows.”
He points to dif­fer­ing phy­tosan­i­tary rules and the stan­dards gov­ern­ing the treat­ment and ex­port of agri­cul­tur­al prod­ucts as one of the most frus­trat­ing bar­ri­ers to trade. “Why should one coun­try re­quire pineap­ples to be washed, and an­oth­er not?” He asks. “We’re CARI­COM part­ners. Let’s agree on one stan­dard.”
Khan calls for har­mon­i­sa­tion of trade pro­ce­dures, sin­gle-win­dow sys­tems for busi­ness reg­is­tra­tion, and true free move­ment of goods to mir­ror the free move­ment of peo­ple al­ready es­tab­lished un­der the CSME.
“Trade in the Caribbean should be seam­less,” he in­sists. “We need to stop see­ing each oth­er as com­peti­tors and start see­ing our­selves as one mar­ket.”

Cau­tious op­ti­mism amid re­gion­al ten­sions

De­spite re­gion­al geopo­lit­i­cal un­cer­tain­ties, in­clud­ing sim­mer­ing bor­der ten­sions be­tween Guyana and Venezuela, Khan re­mains con­fi­dent that sta­bil­i­ty will pre­vail. “It’s al­ways been a con­cern, but Guyana stands on the right side of in­ter­na­tion­al law,” he says. “Our fo­cus re­mains on build­ing in­dus­tries that cre­ate jobs and strength­en re­silience.”
As the GM­SA leads that charge, Khan’s mes­sage to both lo­cal and re­gion­al part­ners is clear: col­lab­o­ra­tion, not iso­la­tion, will de­fine the next phase of Caribbean in­dus­tri­al growth.
“Guyana’s growth sto­ry isn’t just Guyana’s sto­ry,” he con­cludes. “It’s a Caribbean sto­ry. And if we get it right with shared in­fra­struc­ture, joint ven­tures, and har­mo­nized trade sys­tems, we can build a man­u­fac­tur­ing fu­ture that ben­e­fits the en­tire re­gion.”