First quarter bauxite production plunges
“Tentative” production figures released to Stabroek Business by the Guyana Manufacturing and Services Association (GMSA) indicate a drastic reduction in bauxite production for the first quarter of 2009, a circumstance which GMSA President Ramesh Dookhoo says reflects the dramatic shrinkage in the world market demand for the commodity.
Bauxite production figures released by the GMSA indicate that during the first three months of 2009 calcined bauxite production dipped by 31 per cent while metal grade bauxite production plunged by 61 per cent. Tailings and capping production slipped by 29 per cent over the first quarter of this year compared with the corresponding period last year.
According to Dookhoo, the significant reduction in bauxite production between January and March this year follows a pattern of reduced production by local entities with predominantly or exclusively external markets. “I know of companies that have a back-up of raw materials of around two to three months because their export markets are not reordering,” Dookhoo said.
According to the GMSA President the garment sector, especially those companies involved in dedicated manufacturing for international brands, has been heavily hit by a significant reduction in demand “and this has obviously reflected itself in lesser volumes of production.” Dookhoo said that in some cases the survival of companies “is now down to the ingenuity of the CEOs. Some of them are already looking for avenues, including new markets, through which they can keep their businesses viable.”
Meanwhile, according to Dookhoo, while the private sector was seeking to treat the displacement of employees as a last resort, “we have seen the gradual removal of staff in some of the more difficult cases. It is true that outside of bauxite there is some level of attrition taking place. The fact is that no one wants to attract attention to themselves so they are doing it quietly.”
The GMSA President said that he believed that it was important that enterprises that were beginning to feel the strain of the crisis “get over that mental hurdle.” He said that the quicker this was accomplished the more effective will be the physical and mental preparation to mount an effective response.
Despite the downward trend in production in several export-driven sectors, Dookhoo told Stabroek Business that there had been “some bright starts to the year” by some of the country’s manufacturing entities. He said that apart from increasing production during the first quarter of this year the National Milling Company had secured “the significant accolade” of ISO 90001 certification. Describing the certification as “a boost for Guyana’s manufacturing sector as a whole” the GMSA President said that NAMILCO’s accomplishment was a target at which the rest of the country’s manufacturers should aim.
Dookhoo said that figures made available to the GMSA indicated that rice production for the first quarter of the current year had increased by 21 per cent while there appears to have been an increase over last year in the export of greenheart logs and logs of other species “despite an imposition of tariffs on the export of raw lumber.” Additionally, he named the pharmaceuticals sector as one in which “significant production increases had been recorded”, attributing this to “the expansion of the (New) Guyana Pharmaceutical Corporation and some of our other local companies.”
The first quarter of 2009 also saw an increase in the production of several food products including margarine, butter, lard and ghee – all products manufactured by Sterling Products Ltd. Dookhoo said that the first three months of the current year had also seen a significant increase in the production of bottled water, a sector which he said had “mushroomed” in recent years. “Many smaller participants are now involved in this sector and it is probably now ripe for regulation both in terms of public health as well as ‘equitableness” in the sector. More people have come on board over the years and the price of the commodity had come down significantly.”
Meanwhile, Dookhoo said that the manufacturing sector was looking to the commencement of the Amaila Falls hydroelectric project to provide some “light at the end of the tunnel.” He said that Guyana needs to make itself “a destination for light manufacturing as outlined in the National Competitiveness Strategy. We can become a destination for light manufacturing if we have a large hydropower project because we have the skills, the space and the primary products.”
Noting that marketing deficiencies are among the key challenges facing the local manufacturing sector Dookhoo said that developing countries like Guyana have chosen the cost-saving, though not necessarily cost-effective option, of marketing their goods and services on a sectorial basis. “National marketing efforts are very important and in recent years we have become increasingly aware of this,” Dookhoo added.
Dookhoo said that the GMSA welcomed the emergence of the revived Forest Products Marketing Council, adding that the Association intended to work closely with the Council “to ensure that the changes that should be made in the marketing of our wood products are made and that we see tangible results from the reorganization of that Council.”