annual report 2012 - Jamaica Manufacturers` Association Limited

ANNUAL REPORT
2012
2
PRESIDENT’S REPORT
TABLE OF CONTENTS:
President’s Report
Economic Review
2
3
I. Manufacturing Sector
II. International
Environment
III. Internal Environment
IX. Balance of Payment
and External Trade
X. Selected Indicators
Operations
6
I. Board of Directors and
Standing Committees
II. Finance and
Administration
Representation and
Advocacy
9
Membership
Recruitment and
Development
11
I. Membership
Recruitment
II. Training and
Capacity Building
III. New Products
Launched
IX. Government
Administered
Incentives
X. Projects
XI. Trade Facilitation and
Product Promotion
Marketing and
Public Relations
I. Buy Jamaican
Campaign
II. Manufacturers’ Month
The Jamaica Manufacturers’ Association (JMA)
continued to be an unwavering voice for the
over 300 manufacturers
and 75,000 men and
women, working tirelessly
to produce innovative,
quality products for the
local and international
market. Despite the hurdles, manufacturers
grasped opportunities modernizing, retooling,
expanding, and listing on
the Junior Stock Exchange to increase their
competitive edge.
metal theft registered
their concern regarding
the reopening of the
trade. The JMA’s position
remained that the ban
should only be lifted if a
system is put in place to
properly manage the
trade, minimize loss and
The year began with a
ensure that the benefits to
change in government as the country far outweigh
the People’s National
the cost.
Party assumed leadership. However, the JMA Tax reform remained a
persisted in its fight for a priority. The JMA therefacilitative business clifore continued to make a
mate.
contribution to the Private
Sector Working Group
Costs related to energy, (PSWG) on Tax Reform,
security, financing and
which presented 145 probureaucratic red tape
posals to raise approxiremained impediments to mately $7.4 billion in
the sector. The JMA was revenue for the Governtherefore encouraged by ment.
the Government’s announcement of financing In terms of membership
to the MSME sector,
development, the JMA
through the Development launched its Micro and
Bank of Jamaica (DBJ) to Small Enterprise Memberthe tune of $1.5 billion. ship Facility, in February,
However, the JMA
to provide representation
expressed concern with for manufacturing entities
the process of accessing employing 5 persons or
loan facilities through
less; assisting in capacity
Approved Financial Insti- building, accessing aftutions (AFIs). In addition, fordable financing and
the JMA remained per- finding suitable factory
sistent in its call for enspace. The Association
ergy diversification in a also hosted a Manufacbid to lower electricity
turers’ Interactive Forum
and fuel costs.
in Montego Bay.
17
The scrap metal trade
was also on the lobby
agenda, as manufacturers vulnerable to scrap
“Glorious Past...Promising
Future,” which coincided
with Jamaica’s observance
of 50 years of independence and the 40th year of
partnership with the Jamaica Exporters’ Association in staging Expo Jamaica. Jamaican products
were also showcased at
the Trinidad Investment
Convention (TIC).
The activities under the
third phase of the Buy Jamaican Campaign with the
National Commercial Bank
continued with hosting of a
Membership Mingle, the
distribution of 17,000 exercise books in primary
schools, and the mounting
of billboards.
The JMA also secured
funding from Caribbean
Export to implement the
“Improving Packaging for
Export Competitiveness”
project. Activities under the
project include product
packaging assessments for
SMEs and training for
graphic artists in packaging and labeling design.
The Association partnered
with the Ministry of Tourism
and Entertainment as well
as the Jamaica Hotel and
Tourist Association (JHTA)
to enhance sectoral linkages and contribute to a
reduction in the demand
for foreign exchange. The
JMA also collaborated
with The Gleaner Company to publish positive
stories in manufacturing.
The JMA continued to promote a level playing field
The year was one of mile- for manufacturers. In light
stones, as the Association of this, the establishment of
celebrated its 65th Anni- the Jamaica/Trinidad &
versary under the theme Tobago Trade Facilitation
3
PRESIDENT’S REPORT Cont’d
Desk to assist Jamaican exporters in penetrating the
T&T market was a welcomed move.
to Jamaica’s socio-economic
development in 2012 relative to the previous year,
earning US$938.9 million in
exports, contributing 8.6%
At the end of the year, the to GDP and increasing emIMF Agreement remained
ployment levels by 258
pending. However, the sec- persons. We look forward
tor increased its contribution to your continued support as
“For 2012, total
25% over 2011,
from US$746.1
million in 2011
to US$938.9
million.”
“Both Traditional
and Nontraditional
exports
experienced
increased
earnings, valued
at US$154.9
million or 35.6%
and US$784.0
million or 24.1%
respectively.”
Brian Pengelley
PRESIDENT
Assistance Provided
Meetings Attended
PR & Marketing
Activities
Research Requests
Satisfied
270
73
140
38
manufacturing
exports increased
we propel the message that
a stronger manufacturing
sector translates into a
stronger economy, for prosperity on both fronts.
ECONOMIC REVIEW
MANUFACTURING SECTOR
The manufacturing sector contribution to GDP stood at 8.6 percent in 2012, similar to
2011. However, total value added recorded for the sector contracted by 0.7 percent in
2012, compared to an expansion of 1.8 per cent in 2011.
The decline in manufacturing output for 2012 was mainly due to a 1.6 percent decline
of real value in Other Manufacturing sub-sector influenced by reductions in Chemical
products (-199.6%) due to closure of some plants, Petroleum products (-18.9%) resulted
from temporary closure of a refinery plant, Non-Metallic Mineral Products (-0.8%) impacted by reduced demand for cement associated with the downturn in economic activities. The impact of the declines within this sub-sector was marginally countered by increased output of plastic products (6.6%) influenced by increase in the beverage sector
demanding bottles.
The Food, Beverages and Tobacco sub-category grew 0.1 percent in 2012. This growth
was primarily influenced by higher output in carbonated beverages (3.2%) and rum and
alcoholic beverages (17.5%), the highest level of production since 2006. However, the
sub-category was impacted by lower food processing outputs such as sugar, molasses
and dairy products. However, there was expansion in animal feeds and edible oils production.
For 2012, total manufacturing exports increased by 25 percent over 2011, from
US$746.1 million in 2011 to US$938.9 million. Both Traditional and Non-traditional
exports experienced increased earnings, valued at US$154.9 million or 35.6 percent
and US$784.0 million or 24.1 percent, respectively. Export earnings for sugar grew by
51.4 percent, valued at US$94.1 million, while rum grew by 14.3 percent, valued at
US$55.6 million. Exports in Processed Food, Mineral Fuel and Machinery experienced
growth. Most notable, there was significant growth in export of Chemicals of
$US$164.0 million as ethanol exports expanded. However, exports of sub-categories
Beverages and Tobacco and Crude Materials experienced significant declines of 25.1
percent and 41.0 percent, respectively.
INTERNATIONAL ENVIRONMENT
The rate of economic growth in the global economy contracted to 3.2 percent in 2012,
following an expansion of 3.9 percent recorded in 2011. This reflected slower growth
rates in both advanced and developing economies. In particular, advanced economies
recorded growth of 1.3 percent in 2012, relative to an expansion of 1.6 percent in
2011, while growth for the developing countries slowed to 5.1 percent from 6.3 per
cent in 2011. Among the larger developing economies, China recorded the fastest output growth in 2012, albeit at a slower rate of 7.8 per cent when compared to 2011
when output grew by 9.3 percent.
4
ECONOMIC REVIEW Cont’d
INTERNAL ENVIRONMENT
Contrary to the 1.3 percent growth experienced in 2011, the Jamaican economy experienced a 0.3 percent contraction in 2012. Real GDP was $729.7 billion at the end
of 2012, compared to $732.4 billion recorded in 2011. This reduction in economic
activity was influenced by weak external and internal demand, economic uncertainty
as well as unsuitable weather condition for production. Particularly, economic uncertainty was also influenced by the pending International Monetary Fund agreement
which had an adverse effect on investors.
The contraction for 2012 was visibly reflected in the Goods Producing Industries of
1.5 percent with declines in sectors such as Mining and Quarrying (-9%), Construction
(-3.7%), Manufacturing (-0.7%) and Transport, Storage and Communication (-1.5%).
There was growth however in Agriculture, Forestry & Fishing (2.6%), Hotel and Restaurants (1.7%) and Finance & Insurance Services (0.7%).
New Product: Appleton Estate
50 Year Old Jamaica Rum
INDICATORS
Real economic growth
Inflation rate
Fiscal deficit to Nominal GDP
Primary surplus to GDP
Debt stock to GDP
TARGETS
1.00%
12.60%
-3.80%
6.00%
130.50%
ACTUAL PERFORMANCE
-0.30%
8.00%
-8.50%
3.90%
140.00%
Table showing quantitative targets and actual performances for 2012.
BALANCE OF PAYMENT AND EXTERNAL TRADE
New Product: Copperwood Pork
line in the tray pack
Jamaica’s Current Account Deficit decreased to US$1,905.2 million in 2012 from
US$2,116.5 million in 2011. The trade deficit at the end of 2012 was US$4,885.1
million, which represented an increase of US$68.1 million, in comparison to the revised deficit of US$4,817 in 2011.
In 2012, the total value of imports was US$6,594.9 million as expenditure increased
for Mineral Fuels (US$79.4), Chemicals (US$50.6) and Food (US$20.6). Overall, import expenditure increased 2.4 per cent, which largely reflected weak global and
domestic demands when compared to 2011 increase of 24.2 per cent.
New Product: Honey Bun Goldie
Export earnings increased by US$87.4 valuing US$1,709.8 million in 2012 over
2011 figures. This growth was mainly impacted by increase in manufacturing exports
such as Chemicals, Ethanol, Mineral Fuels and Food.
In 2012, Jamaica imported US$858.6 million worth of products from CARICOM,
which represented 13.0 percent of the import bill. These were encouraging signs as
the trade deficit moved from US$916 million in 2011 to US$775 million, a 15.4 per
cent fall. Less Fuel and Minerals was bought from the region, US$143.5 million down
to US$727.4 million in 2012, which accounted for much of this reduction. However,
Food imports grew by 2.6 percent up from US$149.2 million to US$152.9 million.
New Product: Berger Rust Pro
Jamaica’s exports to the region increased by US$15.3 million to US$83.2 million in
2012. During this period, Barbados became the leading buyer of Jamaican products.
Goods exported to Trinidad and Tobago were valued at US$14.1 million, Guyana (US$8.3 million), St. Lucia (US$5.4 million), Antigua and Barbuda
(US$5.2 million) and Suriname (US$5.1 million).
5
ECONOMIC REVIEW Cont’d
SELECTED INDICATORS 2011-2012
New Product: Cetamol
Multi-Symptom Nighttime Caplets
New Product: Pure Ketchup
New Product:
Springvale Salad Dressings
Lemon Grass June Plum, Mango
Ginger and Guava Rosemary
New Product:
Springvale Vinaigrettes
Guava, June Plum, Sorrel
INDICATORS
2011
2012
Exchange Rate
J$86.60:US$1
J$92.98:US$1
Annual Average Inflation Rate
6%
8%
Unemployment Rate
12.60%
13.70%
Rate of Growth in Domestic Economy
1.50%
-0.30%
Population
2,709,300
2,711,476
GDP Per Capita (current price) $'000
J$467.5
J$487.0
Real GDP
J$737 817M
J$729 874.5M
Total Debt
J$ 1 630 414.9M
J$1 762 800M
Total Direct External Debt
J$ 747 026.3M
J$767 600M
Total Internal Debt
J$ 883 388.6M
J$995 200M
Total Exports
US$1 662.5M
US$1 746.7M
Total Imports
US$5 923.5M
US$5 904.7M
Interest Rate (30-days deposits BOJ)
6.25%
6.25%
Average Lending Rates
15.88%
18.34%
Employment in Manufacturing Sector
74,800
75,025
Percentage Contribution to GDP
(Manufacturing)
8.60%
8.60%
Rate of Growth in Manufacturing
Sector
1.40%
-0.70%
Commercial Bank Loans to
Manufacturing Sector
J$7 771.3M
$12 063.1M
Net International Reserves (NIR)
US$1966.1M
US$1125.58M
Net Remittances
US$1 763.2M
US$2 037.0M
New Product: Spur Tree Memories of Reggae Country
Curry Seasoning, Jerk Sauce, Crushed Red Pepper Sauce, Spicy Dipping Sauce,
Scotch Bonnet Pepper Sauce, Oxtail Seasoning
6
OPERATIONS
BOARD OF DIRECTORS’ AND STANDING COMMITTEES
Board of Directors’ Report
During the year, nine (9) regular monthly meetings of the Board and five (5) meetings
of the Executive Committee were held.
New Product: Boss Furniture
Midnight Bedhead
New Product: Boss Furniture
Senegal Bedhead and bed bench
with storage
New Product: Boss Furniture
Sunshine Bedhead
New Product:
NPK+ME(DDP)+ N P Max
BOARD MEMBER
POSITION
BOARD MEETINGS
ATTENDED
Brian Pengelley
President
6
Metry Seaga
Deputy President
7
Jodie Gregg
Treasurer
6
Raymond Miles
Vice President
4
Steven Sykes
Vice President
6
Simon Roberts
Vice President
9
Vaughn Morris
Vice President
8
Christopher Powell
Vice President
7
Ian Forbes
Vice President
6
Milverton Smith
Director
2
Paulette Rhoden, OD
Director
5
Byron Thompson
Director
3
Simon DuQuesnay
Director
6
Vermont Murray
Director
8
Errol Lewin
Director
4
Greta Bogues
Director
6
Norman Horne
Director
6
Michelle Smith
Director
8
Steven Whittingham
Director
5
Radcliffe Murray
Director
4
David Martin
Anand James
Director
Committee Chair – Food
Group
0
2
Omar Azan
Immediate Past President
8
Doreen Frankson, CD
Past President
3
Clarence Clarke, CD
Past President
4
Sameer Younis, CD, JP
Past President
0
Anthony Hyde
Past President
4
Anthony Barnes
Past President
0
Anthony Robinson
Past President
1
C. Henderson-Davis, CD
Past President
0
Douglas Vaz, CD
J. Paul Thomas, CD
Past President
Past President
3
1
7
OPERATIONS Cont’d
Standing Committees
COMMITTEE
Manufacturing Success Stories:
CHAIRPERSON
Government and Policy
Brian Pengelley
Tax Policy Reform
Omar Azan
Membership Development
Doreen Frankson, CD
Trade and Export Development
Christopher Powell
Finance and Administration
Jodie Gregg
FINANCE AND ADMININISTRATION
Financials
The Association recorded an increase in income of $3.6 million to $30.5 million for the year ending December 31, 2012 up from $26.9 million in 2011.
This increase was due mainly to income earned from Expo Jamaica 2012 of
$4.6 million. Subscription Fees represented 46% of total income. New Membership Fees totaled $751,470, an increase of $380,863.32 or 103% over
2011 from forty (40) companies and existing Ordinary and Associate Membership Fees totaled $13,898,145, an increase of $938,208 or 7% over
2011.
Total Administrative Expenses increased by $1.6 million to $26.9 million from
$25.3 million in 2011. This increase was due mainly to increase in staff cost.
The Association made a surplus of $3.6 million compared to a surplus of $1.5
million for 2011.
Administration
The Secretariat made one staff adjustment in 2012 with the voluntary separation of Miss Daliesia Graham, Part-Time Administrative Clerk. The 2012
staff complement consisted of:
NAME
Imega Breese McNab
POSITION
Executive Director
Training:
Ministry of Industry, Investment and Commerce
(MIIC) Training for Directors, Counsellors of
Small Business Development Centre
Andrea Leslie
Membership Services Coordinator
Kamesha Turner
Research and Project Officer
Training:
I. CEDA GIZ ProNET Training of the Trainer, a
consultancy programme to improve
productivity and competitiveness of SMEs
II. MIIC Training for Directors, Counsellors of
Small Business Development Centre
8
OPERATIONS Cont’d
Administration Cont’d
NAME
Rochelle Roye DeWalker
Manufacturing Success Stories:
POSITION
Communications and Marketing Officer
Training:
CPTC Voice/Speech Course and Digital
Photography Workshop
Rheina-Lee Chambers
Receptionist
Rohan Christie
Accounting Clerk
Blondel Facey Chambers
Executive Assistant
Ellen Coghile
House Keeper
Ricardo Frater
Administrative Assistant
Milton Henry
Security Personnel
Leeroy Powell
Driver/Bearer
Jheanelle Johnson
Intern
Monique Lewis
Intern
Front row (L-R): Rohan Christie, Rochelle Roye DeWalker, Imega Breese McNab,
Ricardo Frater, Jheanelle Johnson, Blondel Facey Chambers, Monique Lewis and
Milton Henry. Back row (L-R): Leeroy Powell, Ellen Coghile, Kamesha Turner,
Jordane Richardson, Andrea Leslie and Rheina-Lee Chambers.
9
REPRESENTATION AND ADVOCACY
Issues
Actions/Outcome
Tax Reform
The Private Sector Working Group on Tax Reform
completed its Proposal which was unveiled to the
public at a press conference and presented to the
Taxation Committee of Parliament on February 15
and 28.
JMA in the news:
A Public Relations and Marketing Campaign was
also executed to solicit buy in from the public.
The 2012/2013 revenue measures presented in
May did not include a wholesale announcement of
measures that were proposed by the PSWG.
Measures extracted were a revision of GCT and
Corporate taxes downwards to 16.5% and 25%
respectively, as well as reduction of the GCT exempt list.
In November, the Government presented the White
Paper on Tax Reform, which the private sector believed was not specific and time bound.
Energy
The Association continued to advocate for lower
electricity rates and diversification of fuel sources.
In February, the JMA was named as a stakeholder
of the Jamaica Energy Council (JEC) and attended
meetings to ensure that the Association was abreast
of all the issues as well as contributing to the discourse to achieve the objectives of the National
Energy Policy.
General Consumption
Tax Audits for Producers of GCT Exempt Items
After ten (10) letters, twenty (20) emails and over
ten (10) meetings with the Ministry of Finance
(MOF) [March 8, May 4, June 26 and July 25],
Ministry of Industry, Investment and Commerce
(MIIC) [March 26 and April 24], as well as the
Prime Minister [July 19], the Association in September, finally received a commitment from the Government that the period subject to the audit would
be limited to one (1) year and the interest and penalties would be waived.
Treatment of GCT for
Producers of GCT
Exempt Items
As it relates to how the GCT would be treated for
future imports given that manufacturers of GCT
exempt items could no longer qualify for GCT deferment, the Association was unable to secure a
long-term solution. The Ministry of Finance (MOF) in
September indicated that a Cabinet submission
would be made to classify the raw material input
as zero rated, this commitment was not undertaken. In the interim, however, companies could
apply to the Minister of Finance for a waiver of the
GCT.
10
REPRESENTATION AND ADVOCACY Cont’d
Issues
Modernization of
Industry (MOI)
Programme
Actions/Outcome
As members continued to face delays in the process of being granted an approval for the waiver
of GCT on capital equipment, up to as much as six
(6) months turnaround from the MOF, the JMA after continuous dialogue with Tax Administration
Jamaica (TAJ) and Revenue Protection Department
(RPD) was able to have one of the steps in the
process removed and a commitment of a turnaround time to thirty (30) working days. Additionally, the backlog of the outstanding twenty-three
(23) applications were cleared.
Jamaica/Trinidad
Trade Relations
Trade relations with Trinidad remained on the
lobby agenda of the Association as it related to
the discriminatory pricing of electricity and the
impact on the pricing of Trinidadian goods in the
Jamaican market as well as Trinidad being a
source of LNG supply for Jamaica. The JMA
worked in collaboration with the Ministers of Industry, Energy and Foreign Affairs for the government
to examine forms of redress or actions that can be
taken locally and regionally.
MSME Procurement
Policy
The Association continued to have dialogue with
MOF and MIIC on the continuous delay in having
the amendments to the Policy brought to Cabinet
as well as the need for the review of criteria for
Government contracts. The amended Policy would
set aside 20% of government procurement for
local MSMEs at a 15% price differential. However, both these actions were not completed in
2012.
Government
Procurement of
Primary School Text
Book by Local Printers
The interest of the printers to be able to secure
government contracts for the printing of primary
school text books continued to be represented by
the Association. A meeting was held with the Minister of Education on March 19 in this regard to implement initiatives for percentage amounts of the
contract to be issued to the sector by 2013.
Manufacturing/
Tourism Linkage
The JMA in partnership with the Ministry of Tourism
and Entertainment (MOE) and the Jamaica Hotel
and Tourism Association (JHTA) formed an initial
working group to enhance the linkages between
the tourism and manufacturing sector. The first
meeting was held on October 9, 2012 after which
the JMA developed a project proposal of initiatives to improve linkages which was submitted to
the Ministry on November 7.
JMA in the news:
Manufacturers lay the
foundation for recovery
On December 11, a Linkages meeting was held
with companies from the manufacturing and hotel
sector and five (5) areas for the basis of activities
going forward were agreed.
11
REPRESENTATION AND ADVOCACY Cont’d
44th JMA Awards Banquet Winners
Issues
Actions/Outcome
Other
The issue of competitively priced factory spaces,
collateral requirements to access loans for MSMEs
were documented, submitted and discussed with
the Ministry of Industry and respective Agencies to
address the matter.
Additionally, the JMA advocated for the mandatory registration of manufacturers with the Association as well as the establishment of a Manufacturing Advisory Board.
Other areas of advocacy were reopening of the
scrap metal trade and impact on the sector from
burning the Riverton Landfill.
Manufacturer of the Year
Wisynco Group
MEMBERSHIP RECRUITMENT AND DEVELOPMENT
MEMBERSHIP RECRUITMENT
MSE Facility and Members
JMA Micro and Small Enterprise (MSE) Membership Facility:
Membership recruitment continues to be one of the main focus of the Association. Hence, the Association revised the criteria for membership to include
Micro and Small Enterprises (MSEs).
Ray Hadeed Award for Best SME
PA Benjamin Manufacturing
The MSE Membership Facility was launched on February 23, 2012, to provide greater representation and support for start-up manufacturers, through
the creation of a one-stop shop. This initiative was endorsed by the Ministry
of Industry, Investment and Commerce.
The Facility will open up the JMA to manufacturers that employ one (1) to five
5) persons and have been operating under seven years. It is the intention of
the JMA to assist these companies until they are able to graduate to ordinary
membership.
New Manufacturer of the Year
Lifespan Company Limited
C. Henderson-Davis Breakthrough
Product of the Year Award
Edgechem, for Automel Super
12
MEMBERSHIP RECRUITMENT AND DEVELOPMENT Cont’d
MEMBERSHIP RECRUITMENT Cont’d
MSE Facility and Members
44th JMA Awards Banquet Winners
Champion Exporter (Large)
Red Stripe
A total of twenty-two (22) MSEs signed-up with the JMA, nineteen (19)
manufacturers and two (2) service providers over the period February to
December 2012.
COMPANY
SECTOR
Bloxburgh Gourmet Creations
Food & Agro
Canaan Family Entertainment T/A
Ican! Stationary & More Ltd.
Printing,
Paper
Cleopatra’s Collections
Textile & Sewn
Design Elements & More
Textile & Sewn
D’Next Step Sandals & Accessories
Textile & Sewn
Dollars to Dollars Ltd.
Electrical, Electronic
Automotive
Food & Agro
Journey’s End Wines
Champion Exporter (Medium)
Agricultural Chemical Plant
Champion Exporter (Small)
Spur Tree Spices
Company
Packaging
Lemongrass Solutions
Food & Agro
Mobay Chocolate
Food & Agro
Moonraker Sips Ltd.
Minerals & Metal
Muffetta Enterprises Ltd.
Chemicals, Cosmetics &
Pharmaceuticals
Prestigious Bindery and Accessories
Ripple Effect
Printing, Packaging
Paper
Food & Agro
Signature Cake & Dessert Ltd.
Food & Agro
Sue True Caribbean Manufacturers
& Distributors Ltd.
Spray Tech Alternative
Food & Agro
The Jerk Place & Restaurant Ltd.
Food & Agro
Weather Shields Limited
Minerals & Metal
World Water Enterprise Ltd.
Food & Agro
Bizbox 876
Associate
Jamaica Language College
Associate
Chemicals, Cosmetics &
Pharmaceuticals
&
&
&