Gas-to-Energy project will be a game changer for manufacturing sector- GMSA Head
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Guyana’s manufacturing sector is set to experience significant benefits from the Gas-to-Energy (GTE) project which promises to produce electricity at a lower cost. Ramsay Ali, Head of the Guyana Manufacturing and Services Association (GMSA), expressed this sentiment during a recent episode of the Energy Perspectives Podcast.
The Government of Guyana’s ambitious GTE project will be located at Wales, West Bank Demerara. The project entails bringing approximately 50 million cubic feet of gas from ExxonMobil’s Stabroek Block to two onshore facilities: the Liquefied Natural Gas (LNG) facility and a 300-megawatt power plant. President Irfaan Ali led-administration has repeatedly touted the power plant as one that will slash electricity bills for citizens by 50%.
GMSA’s Head who shares similar views explained that energy costs are often on par with labour expenses for most local companies. He noted that when the GTE project becomes operational, there will be a significant reduction in energy costs for manufacturers in Guyana, making them more competitive.
“Also, if you were to look at say the top 10 manufacturing companies in Guyana…none of us are on the grid; we are all generating from our own suppliers, possibly using generators,” GMSA Head stated. He added, “That itself tells you a story; one, it’s the reliability of power and of course the cost of energy.”
Ali explained that the government’s investment in the GTE project would be a major game changer, not only by reducing the cost of electricity but also by having several positive implications.
“So, let’s start at the top, so most of us in this in this country, are manufacturers here. One of the reasons why we are not so competitive in the export market is the cost of production and one of the reasons why is the cost of energy that has been the story of our lives,” Ali said.
He explained that manufacturers struggle because profit margins are small.
The GMSA Head noted that Trinidad and Tobago companies have always had an edge over Guyanese manufacturers due to their lower energy costs, which are only a third of Guyana’s.
“We do it because we want to expand our business but really and truly, [we] don’t make a significant profit and it’s simply because of the cost of production,” Ali stated. He underscored that a reduction in energy costs and access to high-quality energy would significantly boost Guyanese companies’ export capabilities.
Moreover, smaller manufacturers would also see a reduction in costs. Over the years, the agro-processing business has increased, with most businesses using modern equipment. “They had to lift their game, because there’s no way you could put ketchup in a bottle put a paper label on it. Nobody don’t buy that anymore,” he noted.
Under the GMSA umbrella, there are about 120 small-scale agro-processors. Ali mentioned that most of them state that one of their biggest costs is energy. “So I’m even more excited for the with this project than for larger companies…if they can see a 30% reduction in their cost, that’s going to be amazing,” the GMSA Head stated.
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Heavy focus on manufacturing as International Business Conference set for October
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The inaugural International Business Conference (IBC) will be held in Guyana from October 15 to 17 and in its first year, there will be a huge focus on pushing Guyana’s manufacturing sector.
The conference will be co-hosted by the Suriname- Guyana Chamber of Commerce (SGCC) and the Guyana Manufacturing and Services Association (GMSA). It was launched on Saturday at the Marriott Hotel, Kingston; the conference will also be held here.
SGCC Chairman, Vishnu Doerga emphasised that the conference is one that will be useful to the entire business community not just those in Guyana and Suriname.
And there is a huge focus on the manufacturing sector because of the opportunities available in Guyana.
Doerga pointed out that there are abundant primary products in Guyana and with cheaper electricity coming soon, the manufacturing sector is poised for a huge takeoff. As such, an opportunity to attract more international partners was recognised and is being pursued through the IBC.
He also noted that private sector players, including those from the SGCC, are keen on exploring other opportunities in real estate, infrastructure, mining, industrial services and tourism.
Because the conference organisers are focused on being as practical and beneficial to businesses and investors as possible, the SGCC Chairman said the entire conference is tailored towards connecting foreign investors with local businesses, business service organisations and other stakeholders.
He added, “We want the content presented at the conference to be for the purpose of educating the delegates on how they can do better business in Guyana.”
Guyana’s President Dr. Irfaan Ali is among the speakers for the event.
Doerga, however, noted that there will be a heavy focus on networking and business to business (B2B) activities.
GMSA President, Ramsay Ali told those gathered at Saturday’s launch that Guyana can become the “primary destination for manufacturing” in the Caribbean.
“It is crucial that we harness the momentum to foster partnerships,” Ali posited.
The IBC has the support of the Government of Guyana and there are numerous partnerships with various foreign delegations and Chambers of Commerce in Guyana.
Head of the Guyana Office for Investment, Peter Ramsaroop charged the organisers of the conference to “figure out how to close deals” at the IBC in October. For him, there have been many conferences already showing the interest in Guyana, and investing in Guyana, so there must be a greater focus now on getting business done.
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Press Release: GMSA Elects New Board of Directors for 2024/2025
Georgetown, Guyana, May 2, 2024: The Guyana Manufacturing and Services Association (GMSA) is delighted to announce the successful election of its new Board of Directors for the term 2024/2025. The association’s Annual General Meeting (AGM), conducted in two parts, saw the re-election of the incumbent President and the appointment of key leadership positions within the organization. On April 18, 2024, thirteen board directors were elected through an electronic voting process by members who attended in-person. On May 2, 2024, the President, three Vice-Presidents and Treasurer were elected. The remaining members were elected to form the Board of Directors inclusive of Chairpersons of the various Sub-Sectors.
Ramsay Ali, Chief Executive Officer of Sterling Products Limited, was re-elected unopposed as President of the Association. He will be supported by Roseann Bulkan, Showroom Manager of Bulkan Timber Works Inc. as First Vice President, Vasudeo Singh, Group Finance Director & Deputy Chief Executive Officer of Demerara Distillers Ltd. as Second Vice President and Treasurer and Rafeek Khan, Managing Director of Durable Wood Products Inc. as Third Vice President. The diverse expertise and perspectives of the newly elected directors promise a vibrant and inclusive governance framework for the upcoming year.
Mr. Ali’s professional career began in 1988 with a background in sales and marketing. Over the years he has worked with entities such as Colgate Palmolive, Banks DIH Ltd., and then to Sterling Products Limited. Mr. Ali has given of his time in helping not for profit organizations such as the Guyana Responsible Parenthood Association where he also serves as Chairman and Georgetown Cricket Club and the Scouts Association of Guyana where he is the Vice President. For years, Mr. Ali has made invaluable contributions to the GMSA where he aggressively pushes for success and development in the manufacturing sector. He is the brainchild of the GMSA’s UncappeD Marketplace and continues to support small and micro enterprises in their development, marketing and other pertinent areas.
The 2024/2025 Board Members are as follows: –
- Sterling Products Ltd. – Ramsay Ali, President of GMSA
- Bulkan Timber Works Inc. – Roseann Bulkan – First Vice President & Chairperson of the Extractive Industries Sub-Sector
- Demerara Distillers Ltd.– Vasudeo Singh, Second Vice-President & Treasurer
- Durable Wood Products Inc. – Rafeek Khan, Third Vice-President
- Khayr Organics – Earlecia Hieronymo, Chairperson of the Agro-Processing Sub-Sector
- Corriea & Corriea Ltd. – Dr. Marie Correia, Chairperson of the Construction & Engineering Sub-Sector
- Rid-O-Pes Inc. – Timothy Tucker, Chairman of the Chemicals & Pharmaceuticals Sub-Sector
- Keen360 Inc. – Zahid Khan, Chairman of the Information, Communication and Technology (ICT) Sub-Sector
- Environmental Management Consultants – Malisa Nokta, Chairperson of Services Sub-Sector
- DENMOR Garment Manufacturers Inc. – Upasna Mudlier, Chairman of Textiles & Sewn Goods Sub-Sector
- Banks DIH Ltd.– David Carto, Chairman of the Trade, Investment & Legal Committee & Board Member
- Edward B. Beharry & Company Ltd.– Raymond Ramsaroop, Board Member
- UMAMI Inc. – Chris Persaud, Board Member
- Barama Company Ltd.– Mohindra Chand, Board Member
- ActionINVEST Caribbean Inc. – Dr. Vishnu Doerga, Board Member
- National Milling Company of Guyana (NAMILCO) – Vishal Lalbachan, Board Member
- Kanoo (Guyana) Inc. – Chet Bowling, Board Member
- Brass Aluminium & Cast Iron Foundry (B.A.C.I.F) – Peter Pompey, Board Member
The new Board of Directors is poised to build upon past achievements and set a strategic direction for continued excellence in serving the interests of Guyana’s manufacturing and services sectors.
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GMSA calls for tax-free overtime work
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The Guyana Manufacturing and Services Association (GMSA) wants overtime work to be tax-free along with the removal of property tax and VAT on locally-produced products among other measures to “create a robust foundation for economic growth”.
These measures were proposed to the Government during consultations on the 2024 National Budget and included in the Association’s 2023 Annual Report compiled under the theme “Expanding Trade Horizons Together”.
In arguing for overtime work to be tax-free, the GMSA said: “This can serve as an incentive to employees to support extended work hours per day”, adding that the current severe shortage of skills and manpower affects productivity and project delivery.
Given the current global supply chain crisis, its impact on freight charges and the uncertainty of its longevity, the GMSA noted that measures need to be implemented to cushion the effects on Guyanese businesses and consumers.
To limit shortages and restrain inflationary pressures, it proposed duty be charged only on the Cost Price for items and not on the cost of insurance and Freight (CIF).
To facilitate a more-enabling business environment, it proposes the removal of property tax, noting that “property tax is a wealth tax and ought to be removed too, it is also counter-intuitive to the Governments Housing Drive”. The Government has successfully allocated close to 50,000 house lots across the country since assuming office in 2020.
The business association has been a driver of promoting the use of local products across all sub-sectors. As such, it is calling for the removal of VAT on locally-manufactured products and enforcement of legislation to deter local agents from charging VAT on those products to encourage local consumption.
Other proposals call for the removal of VAT on data purchases and packaging materials, and a reduction of VAT to eight per cent for locally-manufactured engineering products. It is also recommended that the VAT reimbursement system be upgraded to be more efficient.
GMSA also proposed the removal of VAT on the restocking fee for goods returned, the service charge placed on repairs and servicing of items already purchased, and on inputs for the textile and sewn goods subsectors.
Further, local foods such as chowmein, Chinese sauce, green seasoning, pepper sauce and prepared mustard must be zero-rated, the GMSA noted. The body also calls for medical equipment, consumables and reagents (lab supplies) to be zero-rated without seeking approval from the Commissioner General of the Guyana Revenue Authority (GRA) while adding the duty on these should also be removed.
Other measures proposed to the Government were a reduction of Corporation and Income Tax by five per cent, a reduction for companies that meet the “Guyanese Company” standard set in the local content legislation, removal of Stamp Duty completely on receipts/invoices, removal of VAT on testing equipment and reversion to a single tax rate for businesses that have both a manufacturing and trading section. It also proposed a reduction of tax on the importation of new vehicles between 1500cc and 2000cc to the equivalent of the current flat rate of used vehicles and the removal of the VAT.
“This encourages the creation of rental businesses and concierge services that need modern vehicles. Guyanese would also benefit from cleaner, safer vehicles that require less maintenance,” the GMSA said.
Currently, the double-cab and wagon-type 4×4 off-road vehicles are classified as luxury increasing the associated taxes for users of these vehicles.
The GMSA in this regard asked the Government to re-classify these vehicles to utility vehicles and exempt them from Excise Tax and Duty, since they “are a necessity for the survival of many businesses, especially natural resources and construction”.
Consultations were conducted with Government agencies; Private Sector bodies; Non-Governmental Organisations (NGOs) and others ahead of the budget presentations. The 2024 National Budget was presented on January 15 to the tune of $1.146 trillion.
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Guyana’s services sector surpassed $500B in 2023 – GMSA Annual Report
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The services industry plays a pivotal role in the Guyanese economy, generating over $500 billion and expanding by 10 per cent in 2023 when compared to 2022. This sector contributes 13 per cent to GDP and over 41 per cent to non-oil GDP. This was revealed in the Guyana Marketing and Services Association (GMSA) Annual Report for 2023. The report was released on Thursday.
Based on data provided in the report, significant growth rates were observed across various subsectors, with administrative and support services growing by 21 per cent, wholesale and retail trade and repairs by 9 per cent, accommodation and food services by 13 per cent, and transport and storage by 12 per cent. These industries, influenced by the energy value chain, are expected to continue growing as the oil and gas sector matures.
Over the past decade (2014-2023), the selected services sector has witnessed tremendous growth, with finance and insurance, accommodation and food services, information and communication services expanding by over 60 per cent.
Professional services nearly doubled, while administrative and support services saw a remarkable 74 per cent increase. These high growth trends indicate abundant business opportunities.
Lending by commercial banks to the services sector has also increased. Private sector loan balances reached $133 billion by the end of December 2023. This marks a 133% increase in lending compared to the balance of $57 billion at the end of December 2014.
The report also revealed numerous opportunities in various service areas such as;
- Tourism, Hospitality, and Catering: Driven by international business activity and eco-tourism policy, with over 545,000 passengers processed at Cheddi Jagan International Airport in 2023, indicating a 13 per cent increase.
- Logistics and Distribution: Fueled by demand for trucking and transportation services, especially from the oil and gas and construction sectors. Guyana aims to become a logistics hub with improved linkages to Brazil and Suriname.
- Financial Services: Growing alongside Guyana’s expanding economy, including banking, insurance, and investment services.
- Information Communications Technology (ICT): Offering opportunities in web design, network administration, software development, and IT consulting.
Meanwhile, President of the GMSA, Ramsay Ali, emphasised the need for proactive engagement, inviting individuals to take leadership roles within the GMSA to foster growth in various subsectors and contribute to the overall development of businesses in Guyana.
“We need people in the GMSA to really take charge in some of the areas we are not strong in and I am hoping that some of you here today, even though you won’t get elected as members of the executive, there is a place for you in the GMSA to head up some of the sub sectors and we are reaching out to some of you to come onboard,” Ali said during the annual general meeting on Thursday.
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Guyana’s manufacturing sector records highest growth in history
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The manufacturing sector in Guyana experienced tremendous growth in 2023, generating $70 billion for the year. This marks a 25 per cent increase from $56.3 billion in 2022.
This was revealed in the 2023 Annual Report of the Guyana Manufacturing and Services Association (GMSA).
This performance, the highest recorded to date, reflects a shifting dynamic within the sector, moving away from traditional sugar and rice manufacturing towards the “other manufacturing” subsector.
The “other manufacturing” subsector includes a diverse range of products including spirits, beverages, processed foods, chemicals, pharmaceuticals, paints, putty, metal fabrication, plastic, and timber products.
Notably, the manufacturing subsector expanded by 31.8 per cent in 2023, driven by increased production of fabricated metal products and nonmetallic products.
This growth underscores the influence of the energy sector and construction boom on manufacturing activities.
Based on data provided in the Bank of Guyana September 2023 quarterly report, key developments within the subsectors include: Increased production of paints and putty, attributed to ongoing housing developments.
Growth in aerated alcoholic beverages production, particularly by major producers like Banks DIH Ltd and Demerara Distillers Ltd. Rise in production of edible fats and ice cream, with a focus on local consumption.
Decline in the pharmaceuticals sector, indicated by contractions in tablet, acetylene, and oxygen production. Growth in the Textiles and Sewn Goods Sector, fueled by increased construction and energy activities, with notable growth recorded by Denmor Garments Manufacturers Inc. Introduction of bitumen production in Guyana by DCSN Manufacturing Incorporated, with 100,000 tonnes produced locally in 2023.
The report noted that manufacturers in Guyana, apart from the CARICOM market, have significant export opportunities, particularly Latin America, Florida, New York, and Toronto.
GMSA report noted that the duty-free access to the CARICOM market remains underexploited, presenting scope for increased exports of Guyanese products such as uncooked pasta, medicaments, rum/spirits, and prepared sauces.
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Press Release: GMSA and Ernst & Young Services Limited Join Forces to Prepare Businesses for Regulatory Changes, Ahead of Guyana’s Data Protection Act
Georgetown, Guyana, January 19, 2024 – The Guyana Manufacturing & Services Association (GMSA) collaborated with Ernst & Young Services Limited on Thursday, January 18, 2024, to host an enlightening event centred around data privacy. The interactive session, facilitated by key players in technology consulting and global compliance from Ernst & Young (EY), aimed to prepare businesses for the impending enforcement of the Guyana Data Protection Act 18 of 2023 and the establishment of a Data Protection Office.
The event welcomed both in-person and virtual attendees, with the GMSA ICT Sub-Sector Chairman, Chet Bowling, emphasising the critical importance of prioritising data privacy in day-to-day business operations. The chairman set the stage for the engaging session that followed, articulating why businesses should make data privacy a top priority.
Privacy Explained
The event featured insights from the Executive Director and Cybersecurity Lead at EY Trinidad, Anil Persad, who delved into the fundamental concepts of privacy. Attendees gained a comprehensive understanding of the principles underlying data protection, setting the stage for the subsequent discussions on compliance. “Concerns about personal data protection and the ways companies use personal information to power the digital economy are driving lawmakers and regulators to ramp up data privacy and protection laws, revise statutes, and debate new rules,” said the Executive Director.
Navigating the Data Protection Act: Key Players and Responsibilities
Candace Lopez, Global Compliance EY Law (Guyana and Trinidad), provided a detailed overview of key terms and responsibilities outlined in the Guyana Data Protection Act 2023. Emphasising the role of the data controller, she explained that the data controller is any person (individual or a corporate body) or public authority who determines the purpose for which personal data is or should be processed, or any person (natural or legal) on whom the obligation to process data is imposed by or under any law. Candace noted that the responsibility lies with the data controller to demonstrate compliance with the Act’s provisions regarding data processing practices.
Preparing for Compliance: A Roadmap for Businesses
After an overview of the Data Protection Act’s specifics, businesses were guided on the next crucial steps towards compliance. Justin Morin, Executive Director, Technology Consulting of EY Jamaica, underscored the urgency for companies to act promptly. Justin outlined a comprehensive roadmap, highlighting the need for businesses to:
- Allocate resources to define a privacy program that complies with the law and generates value.
- Consult a privacy practitioner for expert guidance.
- Sensitise staff about the significance of privacy in their roles.
The Executive Director stressed the need for businesses to integrate privacy best practices and operate with privacy as the new normal.
Looking Ahead: Privacy as the New Normal for Businesses
The event reinforced the idea that privacy should be ingrained in the fabric of business operations. Operating with privacy as the new normal was highlighted as a key takeaway for all businesses, preparing them to navigate the evolving landscape of data protection regulations.
The collaboration between GMSA and Ernst & Young Services Limited showcased a commitment to fostering awareness and readiness among businesses as they braced for the Guyana Data Protection Act. This event is the beginning of a series of initiatives aimed at equipping businesses with the necessary tools and knowledge to protect customer data and comply with data protection regulations. It serves as a testament to the proactive approach needed to navigate the evolving landscape of data privacy.
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Press Release: GMSA COMMENDS GOVERNMENT OF GUYANA ON BUDGET 2024
Georgetown, Guyana, January 16, 2023: The Guyana Manufacturing and Services Association (GMSA) commends the Government of Guyana for its proactive and forward-thinking plans presented in the National Budget 2024, under the theme “Staying the Course: Building Prosperity for All”. By allocating an unprecedented 1.1 trillion Guyana dollars, the association acknowledges the government’s commitment to fostering economic growth and development in Guyana.
The GMSA is particularly pleased with the emphasis placed on supporting the manufacturing sector, as this will undoubtedly create new opportunities for local businesses and contribute to job creation. The growth in non-oil real GDP in 2023 by 11.7% has resulted in the expansion of the manufacturing sector by 25% and services by 10.3%. This hereby reaffirms private sector and manufacturing resilience, despite challenges in
the global economy.
The continuing development of current transformative infrastructure is key to enabling business activity and delivery. Such key infrastructures include enhancements to the energy grid, incorporating developments like the Gas-to-Energy project and solar and hydro initiatives. Equally significant are transformative land infrastructures, including the Demerara Harbour Bridge, the Schoonord to Crane highway, and the Ogle to Soesdyke Linden highway. These initiatives collectively contribute to fostering a conducive environment for business operations.
Government’s inclusion of some of the association’s recommendations assured the intention to work collaboratively with the private sector. The measures below are essential in supporting the manufacturing and services sectors:
- $527.4 million for the development of the agro-processing sector. The GMSA anticipates that this strategic investment will provide manufacturers with the necessary infrastructure to enhance their production capabilities and meet growing market demands.
- $3.3 billion for the development and rehabilitation of industrial estates in Wales (Region 3), Regions 2 and 10. The GMSA believes the development of these estates will further support the growth of manufacturing in Guyana.
- $450 million towards the replenishment of the Small Business Bureau (SBB) Fund, which the GMSA has continuously advocated for in order to support product enhancement and growth in the agriculture and agro-processing industries. It will also enable businesses to attend regional and international trade fairs and events. Entrepreneurs will also benefit from training and mentorship.
- $500 million for the Food and Drugs Lab, which the GMSA believes will strengthen regulatory bodies and accredit laboratories to do testing, inspection, and certification of products for exportation.
- Over $8 billion for the development of human resources to fund tertiary education through Guyana Online Academy of Learning (GOAL) and the University of Guyana (UG), and a further 2.8 billion to develop skills training (Technical and Vocational Education and Training (TVET) and Caribbean Vocational Qualification (CVG)). This, the GMSA believes, will address the shortage of skills and manpower in the country while simultaneously enhancing the workforce through upskilling initiatives.
- Containing the cost of fuel at 0% excise tax and extending the reduction of freight charges for another 12 months, which will assist businesses to be more competitive on the local and global market and mitigate challenges.
- Increasing the income tax threshold to $100,000 monthly, thereby adding $4.8 billion in disposable income to the working population.
GMSA remains open and committed to working with the Government to foster a thriving business landscape and a prosperous future for Guyana.
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