Executive Director`s Report - Jamaica Manufacturers` Association

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Executive Director’s Report
MANUFACTURERS’ MONTH
Inside this issue:
EXECUTIVE DIRECTOR’S REPORT
1
WORK OF THE SECRETARIAT
3
NEW MEMBERS
3
UPCOMING EVENTS
4
ECONOMIC REVIEW:
A BUDGETARY INSIGHT
5
CARIBBEAN ASSURANCE BROKERS 8
HEALTH INSURANCE PROGRAMME
JMA MEDIA WALL
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POWER 106 FM host Althea McKenzie (right) talks manufacturing with JMA
President, Brian Pengelley (centre) and Immediate Past President, Omar Azan.
T
he Jamaica Manufacturers’ Association sincerely thanks all members that supported this year’s Manufacturers’
Month held under the theme “Believe in the Power of Manufacturing”. Manufacturers’ Month activities, encompassed: four
(4) newspaper supplements; an outside broadcast on POWER 106 FM; factory tours; and a Breakfast Forum which featured guest speaker Gary “Butch” Hendrickson, Chairman and CEO of Continental Baking Company.
Highlights from the Breakfast Forum:
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Executive Director’s Report Cont’d
MANUFACTURERS’ MONTH CONT’D
Highlights from Factory Tours:
Jamaica Bags
Mackchem Limited
Rainforest Seafoods
GCT EXEMPT ITEMS
On April 30, the JMA met with members that are producers of GCT exempt items to provide a status on the advocacy
efforts of the JMA in making representation to the Government to implement a tax structure that will allow for manufacturers of GCT exempt item(s) to recover the GCT paid on input.
Subsequently, the JMA sent out a survey to determine a rate of taxation for the current listing of locally manufactured
exempt goods (chicken, flour, exercise books, bread, bulla and crackers, rice, salt, brown sugar and milk) which will allow
manufacturers to recover some of the GCT expense and would be favourably considered by the government.
If you are a producer of a GCT exempt item and have not yet responded to this request we ask that you provide the
percentage (%) GCT expense (amount which is irrecoverable at the end of the year) to your business by utilizing the below formula from extracted figures within your Profit and Loss Account:
GCT Expense____________
Revenue/Sales from GCT exempt products
SCT ON DENATURED ETHANOL
In June 2012, the Ministry of Finance and Planning imposed Special Consumption Tax (SCT) rates on denatured ethanol
imported by manufacturers for use in the blending of petroleum products, through Ministry Paper 32.
The Ministry of Finance and Planning has advised, in a letter dated April 23, 2013, that Section 42 of the GCT Act allows
manufacturers to defer the payment of SCT on denatured ethanol as it is an input in the manufacturing of a new product.
Therefore, the payment of the SCT on imported denatured ethanol may be deferred, when imported by a manufacturer,
using free code 990.00 for SCTA (08) and SCTS (18), provided a deferral certificate has been granted.
JFP DONATES RECEPTION DESK TO THE JMA
Local furniture manufacturer, Jamaica Fibreglass Products, modernized JMA’s reception area with its donation of a
reception desk. Thank you JFP!
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The Work of the Secretariat - April 2013
PUBLIC RELATIONS AND
MARKETING ACTIVITIES
Speaking engagements:
JMA Breakfast Forum
Forum on the Impact of the Dollar
Devaluation on the manufacturing sector
Nineteen (19) interviews were conducted on:
Manufacturers’ Month
Budget Debates
The Economic Climate
Articles:
Who's Who in Jamaica-the JMA
“Hope for the Manufacturing Industry” in
the April 2013 issue of YourMoneyEzine
ASSISTANCE PROVIDED
Fifty-six (56) requests for assistance were
addressed regarding:
GCT waiver on equipment, packaging and raw
materials
Claiming back GCT for imported equipment
Financing
Customs Administration Fees
Identifying suppliers
Duty Free Access/Trade Agreements
Starting a manufacturing business
Export
JAPEX
MEETINGS ATTENDED
Ten (10) meetings were attended, including the
Canada/CARICOM Trade and Development
Agreement meeting held on April 4, 2013.
Interested in promoting your business in the JMA’s newsletter?
Please contact Rochelle Roye-DeWalker at
rochelle.jma@cwjamaica or call 922-8880-3. The cost to
advertise is only $3000 + GCT.
JMA WELCOMES NEW MEMBERS!
NATURE FIELD CO. LTD. (ORDINARY)
CEO: Mr. Patrick Powell
Products: Coconut Water, Natural Juices and Purified Water
Address: 46 Hagley Park Road
Tel: 994-0258/849-9106
HONEYKIST APIARIES LTD. (MSE)
General Manager: Ms. Michele Johnson
Products: Flavoured Honey
Address: 6 Caribbean Close, Kingston 10
Tel: 999-1004/382-8299
Simply...Honey by Honeykist Apiaries Ltd.
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Upcoming Event: JMA Football Tournament
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Upcoming Event: Annual General Meeting
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Members of The Jamaica Manufacturers’ Association
Limited, will be held at the Registered Office of the Association, 85a Duke Street, Kingston, on Wednesday, June 26,
2013, commencing at 10:00a.m., to transact the following business:
1. Receive the Presidential Report, Board of Directors’ Report for the year ended December 31, 2012, Auditor’s Report, Financial Statements and Balance Sheets as at December 31, 2012.
2. Elect a President for one (1) term.
3. Elect a Deputy President for one (1) term.
4. Elect a Treasurer for one (1) term.
5. Elect seven (7) Directors in place of those retiring or by rotation.
6. Consider and, if thought fit, pass the following Resolution:
RESOLVED that the Board of Directors be authorized to fix the Auditor’s Fees.
7. Appoint Auditor’s for the ensuing year.
8. Transact any other business that might properly be transacted at an Annual General Meeting.
Economic Review: A Budgetary Insight
Over the years, national budget presentations have been fundamentally repetitive. They often lack substance, clear
directions and are filled with unrealistic targets that have no clear strategies for attainment. There has not been a budget
presented by any Minister of Finance in recent years that has not relied on loans, as every year the government experiences major revenue short falls from projected revenue collections. In 2011, total expenditure amounted to $412.5 billion
exclusive of amortization cost, the total expected revenue amounted to $350.8 billion (over 80 per cent of this was due
to tax revenue). This indicates that there are no government establishments that actually earn substantially enough to contribute to national revenue and also highlight the inefficiency of many government businesses and again points to the
need to divest loss making government entities and tackle inefficiencies. It must also be noted that the manufacturing sector contributes on average $30 billion yearly.
In 2009, the fiscal deficit target was 5.5 per cent of GDP. However, in the following year instead of achieving past targets or decreasing it, the fiscal deficit increased to 8.7 per cent of GDP. The government promised in 2009 to reduce
Jamaica’s debt to GDP ratio; instead it climbed from 123.9 per cent to 129.3 per cent. The national debt has now
reached 140 per cent of GDP. Yet again, in the 2013/14 budget presentation, this administration has promised to reduce this figure to 100 per cent by 2015/16. This budget presented has many targets set but creates more questions
than answers, given the economic realities of the country.
In recent years there has been a lot of financing from multilateral support, mainly the Inter-American Development Bank,
the Caribbean Development Bank, European Union, and EX-IM Bank of China. These funds are often combined with local
support such as Development Bank of Jamaica. These loans and grants are often given for infrastructural development,
MSME development, energy projects, agricultural projects and to finance government expenditure, however the use of
these funds are often not seen and the impact not felt. Where are the infrastructural developments and why are there still
cries for loans and financing from MSMEs?
Looking as far back as 2009, there has been calls for a comprehensive tax reform. To date, there is still a call and a
promise for a comprehensive tax reform. Why hasn’t there been a comprehensive tax reform that broadens the tax base
rather than the continuous targeting of specific sectors? Pension reform is an area that has always been tabled in the
budget to take place, which is still outstanding.
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Economic Review: A Budgetary Insight Cont’d
Central Treasury Management System was identified as necessary to correct accounting dysfunctionalities in 2009. In
2010, it was said to be established to improve cash management. It was tabled to be implemented in the 2011 budget
and tabled again this year!
Energy has been a sore spot for virtually every business owner; in 2011 the Minister acknowledged this issue and decided to embrace an Electricity Cost Programme. The Inter-American Development Bank gave the government a grant of
US$350,000 to identify and address energy efficiency. In 2012 announcements were made by the Minister that investments were in lined to reduce electricity cost by 30 per cent. To date there is still an energy crisis in Jamaica as manufactures and business men often find electricity covering over 40 per cent of overall expense.
Since 2010 there has been a unanimous cry from both sides of parliament to divest loss making government entities. To
date there has been no fewer than ten government entities that have been called to be privatized, so far only four has
been completely privatized, and the rest are still in the process, Clarendon Alumina Partners being the most popular of
them.
Budgets 2010 to 2013
Allocation
Education
National
Security
Health
Other
Amortization
Interest
Total
Budget
Expense
20102011
73.2
Allocation
Budget
Expense
20112012
73.2
32.4
147.8
Education
National
Security
Health
Other
132.9
Amortization
132.3
98.3
497.6
Interest
131.1
544.8
13
12.8
32.4
163
'Billion Dollars
Budget
Expense
20122013
90.66
Allocation
Programmes
Wages &
Salaries
Interest
Capital Exp
Debt
Amortization
147.8
136.53
39
198.17
612.16
Allocation
Programmes
Wages &
Salaries
Interest
Capital Exp
Debt
Amortization
Budget
Expense
20132014
93.8
157.2
119.5
44.7
105.7
520.9
Budgets since 2010 have typically ranged between $500 billion and $600 billion. Much of which has had to be financed
by loans and grants as revenue measures often fall short of expenditures.
Revenue Measures 2009-13 'Billion Dollars
Allocations
2009
2010
2011
2012
2013
Tax Revenue
274.9
287.2
308.5
313.8
360.6
15.5
20.1
18.1
17.1
36.1
0.1
0.7
1.7
1.7
Capital Revenue
20.3
2.7
9.2
10.6
1.1
Grants
10.2
15.6
13.2
4.2
9.4
Total
321
326.3
350.7
347.4
407.2
Non-tax Revenue
Bauxite Levy
Over the years, the budgets have been primarily financed by tax revenue with other taxes making up less than 50 per
cent. Increased tax revenue is usually financed through increased taxes rather than a broadened tax base.
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Economic Review: A Budgetary Insight Cont’d
Loans and Grants acquired for Investment
Financial
Year
Loan Institution
World Bank
2010 to
2011
2011 to
2012
2012 to
2013
2013 to
2014
Inter-American Development
Bank
European Union
Inter-American Development
Bank
EX-IM Bank China
Purpose
Total
Facilitate Government
Expenditure
Facilitate Government
Expenditure
Budget Support
Facilitate Government
Expenditure
Facilitate Government
Expenditure
US$200 million
US$215 million
€81.07 million
US$50 million
US$50 million
Inter-American Development
Bank
Energy Efficiency
US$350,000
Development Bank of Jamaica
MSME Sector
JM$1.5billion
Petro-Caribe Fund
JEEP
JM$1billion
Development Bank of Jamaica
MSME Sector
Infra-structural
Development
JM$2billion
EX-IM Bank China
JM$2.5billion
Financing of the budget short fall has often come by way of multi-lateral institutions through grants and loans.
Government Divestment or Privatization Programmes 2010 to 2013
Financial Year
Name of Company
2010 to 2011
Air Jamaica
No
Sugar Company of Jamaica
No
Clarendon Alumina Partners (CAP)
No
Clarendon Alumina Partners (CAP)
No
2011 to 2012
2012 to 2013
Air Jamaica
Yes Completed 2011/12
GOJ 7% interest in Windalco
Yes Completed 2012/13
Clarendon Alumina Partners (CAP)
2013 to 2014
Completed
No
Wallenford Coffee Company Limited
Yes Completed 2012/13
GOJ 50% shareholding in Blood Bay Hotel
Development Ltd
Yes Completed 2012/13
Jamaica Railway Corporation
No
Caymanas Track Limited
No
Kingston Container Terminal
No
Norman Manley Airport
No
Jamaica Railway Corporation
Caymanas Track Limited
No
No
Government has set out to divest all entities that has been repeatedly reported a loss. The table above shows the progress update on all these entities.
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SECURING YOUR WEALTH BY INSURING YOUR HEALTH
INTERNATIONAL COMPREHENSIVE HEALTH INSURANCE PROGRAMME (ICHIP)
Insurance is an important protection, as most persons are not financially prepared for the costs that occur when something goes
wrong. Health Insurance provides you with an affordable way to get medical care when you need it.
Caribbean Assurance Brokers Ltd. takes pleasure in offering you a quality health plan that will provide peace of mind for you
and your family. Through our strategic partnership with the Jamaica Co-operative Credit Union League (JCCUL) and Aetna, we
have been able to offer you an affordable International Comprehensive Health Insurance Programme (ICHIP). ICHIP consists of
three different plans and is uniquely designed to meet the needs of various individuals. Below is a brief outline of how each plan is
structured:
AREA OF COVERAGE
WORLDWIDE
WORLDWIDE
WORLDWIDE
PLAN OPTIONS (ICHIP)
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TYPE OF PLAN COVERAGE
GLOBAL 1
GLOBAL 2
GLOBAL SHARE
COMPREHENSIVE
HOSPITAL ONLY
LIMITED
Maximum Benefit Annually
US $2,000,000
US $1,000,000
US $1,000,000
Annual Deductible (US$)
$2,000 & $5,000
$2,000 &$5,000
$1,000 & $2,500
US$2,000 Option - Deductible in Jamaica
US$2,000 Option -Deductible Overseas
US$0
US$0
US$2,000
US$2,000
US$2,500 Option -Deductible in Jamaica
US$1,000
US$2,500 Option - Deductible Overseas
US$2,500
US$5,000 Option -Deductible in Jamaica
US $500
US$500
US$5,000 Option -Deductible Overseas
US $5,000
US $5,000
Some of these benefits include:
IN-PATIENT BENEFITS
Private or Semi Private Room Per Day
Prescription Drugs in Hospital
Medical treatment, laboratory tests, X-Ray
Chemotherapy and Radiation for Cancer Treatment
Dialysis for treatment of Kidney Failure
OTHER BENEFITS
Emergency Road Ambulance
Evacuation Coverage (Air Ambulance)
Outpatient Dental and Optical per policy year
Maternity Coverage (after 10 months membership)
Emergency Road Ambulance
GLOBAL 1
Paid in Full
Paid in Full
Paid in Full
Paid in full
Paid in Full
GLOBAL 1
GLOBAL 2
Paid in Full
Paid in Full
Paid in full
Paid in Full
Paid in Full
GLOBAL 2
GLOBAL SHARE
$750.00
Paid in full
Paid in Full
Paid in full
Paid in Full
GLOBAL SHARE
Paid in Full
USD $2,000
max
Paid in Full
Paid in Full
Paid in Full
Not covered
USD$50,000
USD $1,000 max
Paid in Full
Paid in Full
USD $5,000/$9,000
USD $1,500
For additional benefits covered under the plan, please contact Ivy Chin, Account Executive, at Mobile: (876) 885-1354 Telephone:
(876) 754-7889-91; E-mail: [email protected]
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JMA Media Wall
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and selecting the
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The Jamaica Manufacturers’ Association (JMA) Ltd.
85A Duke Street, Kingston
Tel: 922-8880-3 or 922-8869; Fax: 922-9205
Email: [email protected]; Website: www.jma.com.jm