Pivoting from its focus on serving the needs of Guyana’s oil and gas sector, Ramps Logistics is now seeking to establish a foothold as a leading agricultural produce exporter and supplier to the North American market for Guyanese farmers.
“When we went to Guyana in 2013. There was no talk about oil in Guyana in 2013. When we first went there we really went to look at agriculture, mining and bauxite. In particular, those were three of the areas that we thought had good potential on the Guyana side,” Ramps Logistics Chief Executive Officer (CEO) Shaun Rampersaud told Sunday Stabroek in an interview last week. He explained that after the Trinidadian-based company saw the opportunity to service the logistics needs in the oil and gas sector, they cashed in on the opportunity, which meant having to shelve their original plan.
Rampersaud said that his company saw the opportunity as an “engine of growth” and as result focus was directed towards that goal. Nonetheless, he said, the decision to return to the original plan of exporting agricultural produce was driven by the government’s commitment towards developing the sector and ensuring it was sustainable.
“We thought that, again, this is a time for us to relook at our re-entry into the Guyanese agricultural industry. And when we look at the production of rice—of course, everybody talks about rice—but we think that there’s a huge opportunity in other areas as well.”
He noted that Guyana has the potential to supply produce, such as coconuts, plantains, ground provisions, and pumpkins to the US market.
Earlier this month, Arapaima Logistics, a partnership between locally owned Guyanese company Roraima Airways and the Ramps Logistics, made their first export of 40,000 coconuts originating from the Pomeroon area, to the US.
The partnership was aimed at boosting the agriculture sector in Guyana, the company had stated in a release subsequent to the first shipment. This initiative, the release added, “will facilitate many more opportunities for Guyanese farmers and producers by expanding their access to international supply chains and markets.”
Guyana, Rampersaud posited, has an opportunity now to penetrate the US import market as a result of the supply chain challenges. He pointed out that the advantage Guyana currently holds is that it is able to deliver fresh produce in a short time span given the short distance to the US ports as opposed to the lengthy travel time from Asia. Further, Guyana has the advantage of enjoying low freight costs as opposed to the high costs for others, such as a farmer in the Philippines for example. The cost to ship a container from Guyana to the US is approximately US$4,500, while the cost from Asia is around US$20,000.
Rampersaud also spoke on the importance of seizing the market. “You know we probably wouldn’t have had a chance to get into some of these markets because it was a lot cheaper to get this coconut from the Philippines and so on. But because the freight costs are significantly less today versus what it was in the past, buyers in the US are more open to buying these products from the Caribbean… the shorter transit time as well makes a huge difference. Because even before from Philippines it was taking four weeks, but with the supply chain issues, that has now gone to seven, eight weeks, whereas from Guyana, two weeks and we’re in the US, so there’s a real opportunity to build on supply chain capability to get our agricultural commodities into the US during this time.”
Noting that although production for Guyanese farmers is not a problem as they have the capabilities to rapidly expand their production, he believes the absence of integral infrastructure has prevented farmers from establishing themselves as large scale producers.
“…and a lot of times the challenge is that when they produce huge amounts of high quality produce, a lot of it is wasted and spoiled. The big difference is, if you really want to go from producing a commodity to being able to generate a significant cash flow from it, in between the production of the commodity and generating any cash flow lies in the supply chain. You need to develop the infrastructure that connects the commodities from Tiger Island to the buyers in New York and Miami,” Ramps CEO explained as he indicated that this is the gap they are aiming to fill with this venture.
“And the role Ramps will play is that we will continue to develop the supply chain that connects the commodity to the markets in the US…” he related. At the time of the interview, Rampersaud was in the US travelling to meet with potential buyers to connect them with the products while seeking to understand the needs of the market.
He stressed that in the near future, they will have to ramp up production to meet the demands of these markets.
On this note, he informed that farmers engaged in supplying the produce they require, will enter into contract with them to produce the products at a fixed price.
“So for example, let’s say we have a farmer who could produce 100,000 pounds of plantains in a month. We go to him and we say, okay, this is your price x, we do a contract with them. And we said as long as you produce this plan over the next six months, you are guaranteed to get a US price because then what we would have done is that we would have worked with all buyers in the US and we would have given them a price for six months as well,” he explained.
This, he said, will also eliminate challenges from the local market such as rising prices for produce as not all farmers will cultivate produce for the export market. He indicated that in the short term the local market might be impacted but in the long term once production is increased, he said whatever is not exported will be directed to the local market, thereby making the commodities cheaper. He also assured that farmers will be treated fairly with this deal.
“I think when it comes on from the discussions we’ve had with the farmers before, you know, I think the greatest challenge any farmer has is when they produce and it goes to weeds or when they produce and they have to dump it. The biggest thing is to understand how they can get a guaranteed price for their supply.”
Rampersaud also pointed out that they will have to look at introducing things like mechanisation once they ramp up production. Such an initiative he said will help in post-harvesting to prepare produce for export.
Moreover, he explained that his local partner Roraima Airways is responsible for sourcing and networking with farmers to cultivate the produce they require. The company currently uses the Guyana Marketing Corporation Packing facility to prepare it products for export. However, once production increases, it will have to look at either establishing a facility closer to the production hubs.
And while transporting the coconuts to the packaging facility in Sophia, Greater Georgetown incurs somewhat high costs, in the near future they will have to look at having a processing and packaging facility on the Essequibo Coast to bring these costs down.
In addition, he noted that while they have intentions to enter into the Caribbean market, they will have to assess the needs of that market first. He mentioned that the Guyana-Barbados food terminal, which is to be established soon, will allow them to get familiar with the needs of the market. On this note, he disclosed that company reps are expected to travel to the island soon to examine the possibilities that exist there.
Value-Added Products
Asked if the company has any plans to export value-added items to the markets they currently serve, Rampersaud responded that they have not engaged in any discussion with manufacturers nor the Guyana Manufacturing and Services Association (GMSA).
“We have not had a whole lot of conversation around the GMSA because since last year, we’ve been pretty focused on this agricultural commodity project.”
However, he was quick to point out that while they will look at it in the future, this project serves the purpose of providing valuable insight into understanding the market and what products they can export.
He acknowledged too, the high cost of production, reminding that it is not feasible to export products manufactured at a high cost. He explained that with the increased production of value added products there will be higher energy costs for the manufacturer and as a result, a higher cost for the product.
Rampersaud, nevertheless said when the time comes his company is ready to assist Guyanese manufacturers in getting their products into new markets.
“The second challenge they have of course, is supply chains. And that’s where we are good at. We’ve worked with a number of manufacturers in Trinidad and other places as well to help them to access other markets and I’m sure we’ll be doing the same for the GMSA as well,” Rampersaud declared.
