Home' Trinidad and Tobago Guardian : May 2nd 2013 Contents MAY 2013 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
COVER STORY | BG5
The National Energy Corporation (NEC) is working with a
local investor to build the first plant that will see the linkage
of the local manufacturing and energy sectors.
This was confirmed by the NEC president Dr Vernon Paltoo,
who told the Business Guardian the investment is in excess
of $1.25 billion (US$195 million).
Paltoo said the company Chemtech Ltd will develop an
integrated melamine-based facility to manufacture resins and
high-value wood products at Union Industrial Estate and it
was waiting for a certificate of environmental clearance, working
on finalising the technical aspects of the project and the financ-
Paltoo said construction is expected to begin by the end of
the year or the first quarter of 2014 and will see commencement
of production in 2016. The plant is expected to manufacture
melamine-based resins, oriented strand board and veneer. It
will use melamine, methanol and lumber as its raw materi-
als.Paltoo said since the raw material was made available on
the local market by Methanol Holdings (Trinidad) Ltd, the
manufacturing sector has shown genuine interest in going
further downstream of melamine. He said this has been demon-
strated by several initial proposals having been made to the
NEC in the last two years.
He said this development is important for the long-term
sustainability of the local economy.
"Since the start of production of melamine by MHTL AUM,
NEC has been actively promoting the development of ener-
gy-based manufacturing industries. There are inherent benefits
to the country for the development of manufacturing industries
using output from the energy sector. These include, inter alia,
the creation of higher value products, generation of a higher
number of skilled jobs per unit of gas used and per unit of
He said a couple of other proposals are in the early stages
of assessment and development and the NEC continues to
pursue both local and foreign investors for the development
of this industry.
Paltoo acknowledges the local manufacturing sector will
need to see evidence that the opportunities can be explored.
He said, in this context, the NEC continues to evaluate if it
will be required to itself invest in a downstream project.
"As was done for the initial establishment of Point Lisas
Industrial Estate where NEC made the initial investment for
the development of gas-based industries, we would continue
to assess the most appropriate methods for stimulating the
development to this next phase in the development of the
energy industry in T&T.
"The potential for expansion and diversification of the energy
sector through energy-based manufacturing is tremendous,
and is a very important aspect of building a sustainable energy
sector for the future."
Paltoo added: "The NEC/Ministry of Energy and Energy
Affairs launched the melamine initiative two years ago. We
have continued to market and facilitate discussions in keeping
with our company's mandate. Once an initial project begins,
and demonstrates success, there would likely be much greater
participation by the local business sector. This is similar to
the initial stages in the development of the Point Lisas Industrial
Estate, where there was not significant interest by other
investors until the Government made the initial investments."
Energy Chamber: High level of risk
President of the Energy Chamber, Dr Thackwray Driver,
said the reluctance of local manufacturers to invest in the
downstream energy/manufacturing sectors was due to the
perceived high level of risk. He said the reason local manu-
facturers have not until now invested in projects using melamine
as an input is they have not identified projects that will give
them the return they seek, based on the level of perceived
Driver said: "Some commentators repeatedly claim that
local manufacturers misjudge the risk profile of potential proj-
ects, but these same individuals are usually not actually
investing their capital into similar projects.
"One reason for the hesitance of local manufacturers will
be the fact that most of the potential manufacturing oppor-
tunities rely upon accessing extra-regional export markets and
local manufacturers perceive this as being risky, not least given
the inefficiencies associated with exporting through the Trinidad
"Local manufacturers are also challenged by the fact that
they have trouble accessing skilled labour at competitive labour
rates, not least because they are frequently competing with
the state for labour."
He said the Energy Chamber supports policies to encourage
private sector investment into potential projects and typically
supports less direct state involvement in the economy.
Both Driver and Paltoo said based on the products from the
proposed second phase of the Mitsubishi DME project, there
is the potential for the development of many high value ener-
gy-based manufacturing industries. These include textiles,
solvents and adhesives.
Paltoo said it is anticipated that in addition to melamine,
there would be other input materials available for energy-
based manufacturing in the near future from the DME project.
These would include acrylonitrile and mono ethylene glycol.
investment in the works
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