The Jamaica Manufacturers and Exporters Association (JMEA) is looking to increase its receipts from Caricom as it believes there are still opportunities within the bloc for local companies to grow while also advancing the Jamaican economy.
During the recent Jamaica Observer Business Forum, newly elected president of the JMEA John Mahfood shared that as much as Caricom’s English-speaking member countries make up the same population size as Jamaica, they still have “three or four times our purchasing power.”
“I want us to focus on exporting there, to the Caribbean, where we already have relationships with distributors, where we already have relationships with [importers]. It’s not hard if somebody is willing to make the time and effort, and I want to see us looking at doubling our exports to the Caribbean in the next few years,” Mahfood said, outlining his vision for the organisation during his tenure as president.
He further explained that with a gross domestic product (GDP) of US$5,000 per capita, the Jamaican economy is too small a market for small and medium-sized enterprises (SMEs) to realise the kind of growth to become large entities, and so they need to develop a mindset for exports. He added that other Caribbean countries share a common history and culture as Jamaica, and consume the same products, and so Jamaican companies should be looking at exporting to them.
“If you as a manufacturer only look to Jamaica, you’ll never grow beyond a certain point ’cause you’re selling to poor people in a small market. So you’ll reach a point and that’s it,” he reasoned.
The JMEA head — who is also CEO of Jamaican Teas — said that larger companies must to be willing to help other companies by incorporating them in their networks and introducing them to distributors in other territories. He related that by introducing smaller businesses to Jamaican Teas partners in Barbados, they were able to gain access to that market.
“And, in fact, we have a big brother programme (through Jampro’s Export Max II) and I have four or five companies that I mentor and I just did a videoconference with a distributor in Barbados and at least two of the companies reached out to the distributor after we made the introduction and they were able to get orders… So that is one way, as I see it, just by reaching out and helping each other, not just thinking about ourselves,” he explained.
However, Stephen Dawkins, JMEA vice-president of trade and logistics, noted that there is a trust deficit among some companies for fear of revealing trade secrets. As a result, there is a lack of information sharing among local firms.
Dawkins argued that some companies are not willing to admit that they neither have the capacity nor the structures to export on their own.
“In other words, if you’re facilitating a company to consolidate their products into your container, they don’t want you to know how much they’re pricing their goods at because there is certain information that must come to us to consolidate,” he said.
Dawkins added that he has witnessed where companies that have been willing to consolidate with each other have grown to shipping containers on their own.
For example, he disclosed that Wisynco, where he is manager of exports, in the past would consolidate their goods into a single container with Mahfood’s Jamaican Teas. Today, however, both companies can afford to fill a container with their own products and ship to other countries.
Within the last year, Dawkins also shared, Wisynco’s exports have increased by 40 per cent. Likewise, Jamaican Teas exports have grown in a year marked by logistics challenges and the global economic fallout stemming from the coronavirus pandemic.
The JMEA vice-president said there is still room for more Jamaican companies to export and grow their businesses “…and what this means is that the manufacturing segment [of the economy] can hold up.
“Tourism fell off big time, but manufacturing held up and I believe that the Government, now seeing that, will change focus.”
“If you as a manufacturer only look to Jamaica, you’ll never grow beyond a certain point ’cause you’re selling to poor people in a small market. So you’ll reach a point and that’s it”— John Mahfood, president, Jamaica Manufacturers and Exporters Association
Even so, Dawkins concedes there are challenges to barriers to exporting to some Caricom member states adding that there is still a far way to go, but he also said progress is being made in that regard. He listed product development and shipping protocols as some of the challenges companies will face, but he also noted there have been “fundamental changes” and improvements in port logistics. He encourages SMEs to think globally and incorporate an export strategy into their business model.
In response to this, Mahfood said he understands how difficult it is for an entrepreneur who has achieved his or her maximum potential in Jamaica to start from scratch as it relates to exporting.
“It’s hard for someone who is already at the top of their game in Jamaica… Plus, if you are going to start in the export market, you have to make an investment, you have to bring people onboard, you may have to ship at a loss. It’s not an easy thing and people are not willing in Jamaica to make the sacrifice,” the JMEA president stated.
However, he asserted that his organisation stands ready to help companies through the process and address the challenges to export.