Tufton tells manufacturers use low interest rates opportunity to retool

Minister of Industry, Investment and Commerce, Dr Christopher Tufton, has urged manufacturers to use the opportunity provided by the existing low interest rates to retool their operations as part of the strategy towards building a more efficient and competitive industry.

"This is the best time, in at least 30 years, for manufacturers to pursue a retooling programme that will take them into a modern industry and achieve critical efficiencies that will allow them to be competitive," he said.

Tufton noted that over the past 25 or more years, Jamaica's macro-economic climate has been erratic and quite hostile to the manufacturing sector. "The cost of money - interest rate that is - inflation rate, erratic exchange rates have wreaked havoc on the manufacturing sector," said the minister, following a tour of the Wray and Nephew manufacturing plant at Spanish Town in St Andrew last week.

The harsh economic climate that existed has created for manufacturers a major disadvantage where they were unable to access money because of the high interest rates and, where they decided to take the risk, more often than not they did not have the capacity to invest in the latest technology, he said.

"In other words, very often, manufacturers retooled in the past by purchasing used equipment and, in some instances, equipment that would have been discarded or would have been rendered outdated ... in other jurisdictions," Tufton explained.

Furthermore, he said those manufacturers ended up competing with Jamaica, which effectively entrenched the uncompetitive nature and the low productivity seen in the local industry over many years.

"Very few, over the last couple of decades, have been able to break out of that cycle and where they have been able to, they have had to use very creative ways to do it, particularly as it relates to accessing the funds to do it," the minister added.

"Today that scenario has changed, and, as a consequence, we are seeing interest rates below 10 per cent, and it is for me to be used as a signal and an opportunity to engage the process and to retool," he said.

Having observed Wray and Nephew's rum bulk-handling and ageing facility, as well as its blending, bottling and warehousing operations, the minister observed that the company has demonstrated that it has been retooling.

The tour was organised for the minister and his team to observe Wray and Nephew's operation, the progress the company has made, to share some of the challenges it faced, and to determine how the government, through policy or otherwise, could support the sustainability and further development of the company.

Tufton said that having gone through and discussed and looked at the activities in the company, and also having the background knowledge of the farming side of the spirit manufacturer in his former role as minister of agriculture, "I must conclude that I'm quite encouraged with what is happening, and believe from the example that I've seen here that manufacturing in Jamaica certainly has a future and should be encouraged and promoted."

mcpherse.thompson@gleanerjm.com