Home' Trinidad and Tobago Guardian : May 2nd 2013 Contents BG4 COVER STORY
BUSINESS GUARDIAN www.guardian.co.tt MAY 2013 • WEEK ONE
President and group chief executive officer of Neal
and Massy Holdings Ltd, Gervase Warner, has
told the Business Guardian the Mitsubushi/Neal
and Massy methanol to petrochemicals project
provides T&T with its best chance of finally
having linkages with the manufacturing and the energy sectors
because of the commitment of his company and the technology
and contacts of Mitsubushi Corporation.
In an interview with the Business Guardian, Warner was
asked why T&T should believe that this time manufacturers
will take up opportunities to link the two sectors when, in the
past, they have not invested in areas like downstream melamine.
Warner said the difference was that Neal and Massy was
involved in the project and the company was committed to
going further downstream. He said the involvement of Mit-
subushi Corporation meant that both technology and market
access were more readily available to T&T than in the past.
"Mitsubushi is a global connector. The number of entities
they have brought into these negotiations, people with tech-
nology, people with access to markets for the products we are
talking about, have been phenomenal. The eye they have for
innovativeness in terms of how to find innovative routes to
actually produce these products have been tremendous. I think
the key difference is we have the creativity, you have a local
partner who has the entrepreneur talent to make such invest-
ments, and you have an international partner that will provide
the connectivity to the entities, whether we need technology,
whether we need access to products."
Warner said equally important was the fact that Neal and
Massy was interested in downstream manufacturing and equity
interested in viable manufacturing projects.
"You have a local partner like Neal and Massy that is in this
for the downstream manufacturers, so we have looked at this
and we think that those downstream manufacturing oppor-
tunities look interesting and potentially economically feasi-
The TTMA perspective
T&T has for almost 40 years had a vision of going down-
stream of the energy sector. It has invested in gas-based petro-
chemical industries and attracted both international players,
but to date has not been able to make the linkages between
energy and manufacturing.
Local manufacturers say they continue to be cautious because
of large sums required for investing in projects that link the
energy and manufacturing sectors and a lack of support from
Government for such investments.
In an e-mail response to several questions, the T&T Man-
ufacturers Association identified three major challenges facing
local manufacturers in investing downstream.
• Significant volatility within the sector that leads to boom-
• Increased competition from new players within the energy
market like Nigeria and Mozabique that have more productive
potential and larger resources
• The emergence of shale gas production in the United
States and the search for alternative renewable energy tech-
nologies in recent times
The TTMA said the lack of investment in the downstream
energy sector/manufacturing has little to do with their members
being unwilling to take risks, and more to do with the envi-
ronment in which they operate.
"Manufacturers may not necessarily be risk-averse, per se,
but rather may lack confidence in the structures that are sup-
posed to offer support to business and enterprise in T&T."
The e-mail from the TTMA read: "Manufacturers would
seldom be inclined to make huge investments in plant and
other capital intensive outlays if an enabling business envi-
ronment is absent."
An economic point
Republic Bank s chief economist, Dr Ronald Ramkissoon,
agreed the lack of investment in the downstream sector by
local manufacturers had less to do with a lack of entrepre-
neurship and more to do with a lack of sufficient focus.
Ramkisson said there needs to be a vision for the sector
that includes existing and potentially new players in the pos-
sibility of linking the energy and manufacturing sectors.
He said there were real issues surrounding marketing and
market access and that the Caribbean market, which is dom-
inated by local manufacturers, may be too small and unless
local manufacturers feel they can penetrate the global market,
there may be reticence in going after the opportunities.
The TTMA said traditionally there had been a clear distinction
between the non--oil and the oil- and gas-based manufacturing
industries. As such, there was little exploration of the forward
and backward linkages that may exist within the oil- and gas-
based manufacturing. It said since the energy sector is a sig-
nificant contributor to the nation s economy, government poli-
cies within the sector are very government-intensive, regulated
largely by the Government and a few foreign investors without
there being market-oriented reforms.
Under the agreement, the consortium will invest an
estimated US$850 million in the first phase of a
methanol project on 50 hectares of land at Union
Estate, La Brea. The project has two phases. Phase one
requires capital expenditure of $850 million and a gas
requirement of 100 mmscfd. This phase involves a
methanol project with a component of that methanol
being converted to dimethyl ether (DME).
DME is increasingly being used in the Far East and
Europe as a substitute for propane and diesel. Energy
Minister Kevin Ramnarine has said the project will help
reduce the subsidy on LPG and diesel, whilst using a
Neal & Massy CEO
Confident of manufacturing's
role in Mitsubishi project
Gervase Warner, chief executive officer of Neal and Massy
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