|New TTMA President- Local business must invest more |
By Sasha Harrinanan Thursday, April 18 2013
LOCAL businesses “must invest to increase capacity and improve productivity” if they are to successfully expand their operations locally, regionally and internationally. The advice comes from newly elected President of the Trinidad and Tobago Manufacturers’ Association (TTMA), Nicholas Lok Jack.
During a recent interview with Business Day and in his maiden address at the association’s annual general meeting, held on Monday at the Hyatt Regency Hotel , Port-of-Spain, Lok Jack urged manufacturers to invest in equipment upgrades and the requisite staff training.
“Do not strip the profits out of your businesses to invest in other ventures at the expense of your factories. I implore you, do not let your factories get run down and obsolete. The time for investment is now - there is liquidity and interest rates are at an unprecedented low level.”
Lok Jack cautioned against failing to do so, citing examples in other Caricom member States, where “very low productivity, coupled with government spending, lead to high inflation, which in turn leads to currency devaluation and consequently high interest rates which depresses capital investment. This is a dangerous vortex that is extremely difficult to exit.”
Re-investing is one thing, having a labour force with the right skills is another. Noting there is only so much re-tooling or re-training one can do, the new TTMA President said schools in TT need to start tailoring the curricula to meet present and future needs of businesses.
“Too many times we as employers, at least in the manufacturing sector, hire people who either don’t have the requisite skills or graduated with a head full of theory and little to no practical experience. It takes time and money to bring them up to speed on our present machinery, then we have to repeat the process when an upgraded system or piece of equipment is installed. This educational gap needs to be rectified,” Lok Jack told Business Day.
Addressing his fellow TTMA members on Monday, the president said there was hope of this changing for the better because Tertiary Education Minister, Fazal Karim, has commissioned a collaborative study on the skills needs of local businesses.
Lok Jack said the study is aimed at developing curricula that is applicable and relevant in order to produce graduates who can face the challenges. However he noted this would take time to have an impact.
The TTMA president therefore recommended education improvements and certification programmes. He also suggested “reforming our immigration policy” to make it easier for TT-based companies to hire the right labour right away, be it regionally or internationally.
“We need sufficient workers with science, technological, engineering and math skills. Our wages can only increase if productivity increases,” Lok Jack declared, “as increased productivity will lead to a higher income and higher standard of living. Conversely, increasing wages without the requisite increase in productivity will instead only lead to inflation, thereby lowering the standard of living despite the higher wage rates.”
Lok Jack’s “day job” is Executive Director of Associated Brands (Investments) Limited; a holding company consisting of six manufacturing companies, four in TT and another two in Malta in the European Union.
Speaking from experience of exporting Associated Brands’ products beyond Caricom, he advised and encouraged fellow business owners who have not yet done so to begin exploring their options.
“Caricom is our home market. We should not consider a sale to Jamaica or Guyana as an export sale. It’s all one market (whether) I send a truck to Point Fortin (or) I send a ship to Kingston. We all recognise that the days of preferential access via one way trade agreements are a thing of the past so we must make use of the bilateral and multilateral trade agreements and consider the opportunities that abound within the wider Caribbean.”
Hence Lok Jack’s goal during his one-year term (which can be renewed for another year), to create a data base on export markets, particularly in Central and South America, where relationships are key to doing business.
“The TTMA, under my Presidency, will organise trade missions to Central America...We have no alternative but to find the time to make these visits...and interact with them (because) they are very relationship driven.”
Lok Jack also advised moving swiftly to cement these relationships under the various bi-lateral trade agreements being worked out between TT and several Latin American countries. “The economic problems in the European Union and the USA have impacted companies in these markets and many have already turned their sights on high growth emerging markets. This no longer represents only the big four, Brazil, Russia, India and China but smaller markets such as Colombia, Guatemala, Panama, El Salvador, Nicaragua and Costa Rica to name a few.
“We must be prepared to face stiff competition not only from regional companies but also from major international corporations targeting these markets.”
Lok Jack exuded confidence though, that over the next year, the TTMA’s Secretariat would be able to tailor its services to meet members’ individual requirements, thus paving the way for success. “I have every confidence that, together, we will succeed.”