My Thoughts on Technology and Jamaica: Why Jamaica's Basic Item Food Bill mostly from 1st World Countries despite being Made in Jamaica


Tuesday, November 5, 2013

Why Jamaica's Basic Item Food Bill mostly from 1st World Countries despite being Made in Jamaica

“Consumers are demanding these products which would have been traditionally filled by international companies. Local companies have sought to capitalise on this opportunity through brand Identity. Additionally, this practice is not unique to Jamaican companies; Local manufacturers are replicating rebranding and reselling practices which are done by other top international manufacturers, in the process, creating jobs and increasing Gross Domestic Product”

Excerpt from a joint response from JMA president Brian Pengelley and JMA research manager Kamesha Turner Blake on the issue of Jamaican Food Production and Imports by the Jamaica Observer on Friday, October 25th, 2013

Local Food production in Jamaica is virtually non-existent these days if you go to the supermarket. Most of the products you see in the isles are made abroad and imported here. This realization came to the fore when it was reported that the Local shortage of Chicken Back was due to importation problems with the product from abroad.

But what may surprise you is the fact that most of the Locally branded products made here in Jamaica actually use Raw Material sourced from other countries as stated in the article “Whither Local Food production?”, published Friday, October 25, 2013 BY STEVEN JACKSON Business writer, The Jamaica Observer. Say what?

According to STATIN (Statistical Institute of Jamaica) it’s not so bad as we're holding back a bit this year possibly because of the shortage of Chicken Back (or so goes the speculation):

1.      5.4% decline in the trade deficit over the review period from US$2.3 billion to US$2.2 billion
2.      4.0% year-on-year decline in the trade deficit to US$3.1 billion

Here are some stats according to Caribbean Business Report from the ITC (International Trade Centre), joint agency of the UN (United Nations) and WTO (World Trade Organization) on Jamaica's insatiable love for imported Food:

1.      US$500 million ($51 billion) worth of basic goods including Sugar, fish and beans from 1st World Countries in 2012

Broken down in detail, it reads as follows for 2012:

1.      US$171 million trade deficit in cereals which is classified as a Basic Food item
2.      US$71 million trade deficit in meats led by US and Canadian
3.      US$54 million deficit from dairy and egg products from the US and New Zealand
4.      US$31 million deficit in fish and Seafood from imports from Norway and Canada
5.      US$2.5 million trade deficit in Sugar and confectionery, mostly imports from Colombia and Guatemala

However, Jamaica has a trade surplus (as in export) in terms of the following locally produced items:

1.      Organically grown vegetables
2.      Cocoa
3.      Coffee
4.      Yam
5.      Ginger
6.      Pepper
7.      Ackee

GraceKennedy Manufactured Products – Puss in a Tin Can Made in Jamaica

GraceKennedy, Jamaica’s beloved manufacturer with some five (5) Factories producing processed Foods in Tin Cans, Plastic and Glass Bottles and Sachets, imports most of its Raw Materials to make many of our packaged “Jamaican” products as we don't have them here in abundance. Those 40 countries from which Grace Kennedy imports its Raw Material have a competitive advantage over Jamaica in terms of being the producer of both Raw Materials as well as possessing the manufacturing processes to process Food for export. 

GraceKennedy merely seeks importation contracts from suppliers in these countries for Raw Materials based on pricing, availability and quality and repackages them to suit the tastes of Jamaicans to quote CEO of GraceKennedy Don Wehby: “Our choices of primary supply sources are more and more driven by the availability, competitiveness, quality assurance and market proximity of the respective Materials and manufacturing facilities”. For example:

1.      Grace brown Sugar in sachet from Ireland
2.      Grace Sardines, which is a product of Poland
3.      Grace Oats from the US
4.      Grace Aloe Vera juice product of Thailand

Some of GraceKennedy products are already finished products which they merely re-label and resell within Jamaica and the Caribbean based on the above criteria. Local Manufacturing does account for some of our Food coming from GraceKennedy:

1.      JA$4.4 billion worth of goods produced Locally at its five factories
2.      JA$2.3 billion worth of goods from other Local manufacturers each year

Lasco Distributors – Imported Foods processed to be cheaper than the competition

Lasco Distributors as their name implies, also does the same thing as well. According to an expert who's affiliated with Lasco, quote:  “Lasco does not do anything in a vacuum. It gets samples worldwide from different facilities and manufacturing companies and [Lasco's choice] is based on the taste, quality specifications and also the price. Have you ever tried the baked beans...Lasco doesn't just stick to one region but rather goes to areas that have the core competence in what they produce. So that particular region [Italy] would have the advantage in beans per se.”

For example Lasco Raisin Bran is a German product and broad beans and baked beans are Italian. Add to all of this the fact that most of our confectionaries i.e. sweets and Chocolates brands are also imported from Trinidad and Switzerland despite Jamaica being a producer of Sugar and Cocoa to make Chocolate and you can see our addiction to foreign sweets.   

Don’t believe me? Next time you go to the supermarket, take a closer look at most of the biscuits and confectionaries in the isle that you purchase for your kids. They’re mostly imported save for National Bakery Products or Excelsior Products e.g. Excelsior Cinnamon Crackers.

Technically those are too; National Bakery and Excelsior’s Raw Materials are all imported or supplied by a Local manufacturer or Raw Material such as flavours and colourings called Caribbean Flavours, whose recent IPO (Initial Public offer) was oversubscribed on the JSE (Junior Stock Exchange) as stated in the article “Caribbean Flavours IPO oversubscribed”, published Friday, September 27, 2013, The Jamaica Observer.

JMA Slogan rings true – “Buy Jamaican build Jamaica” Processed Foods for Foreign Clients

Certainly makes the JMA (Jamaica Manufacturers Association) slogan “Buy Jamaican build Jamaica” hard to accept, seeing as most of these processed Foods are really imported, even if they come in a Tin Cans, Plastic and Glass Bottle or Sachets that says “Made in Jamaica”.

But there’s an upside; further work for manufacturing goods for clients seeking to have a brand association with Brand Jamaica. Because the product, whether imported as a Raw Material to make another product or a finished product to be re-labeled and resold now has the “Made in Jamaica” label on it, exporting our manufacturing expertise shows the world that we’re capable of Processing Food safely and with the highest standards. 

HAACP (Hazard Analysis and Critical Control Points) and other US Food manufacturing standards are already adhered to as Jamaican products have rarely suffered from a need to do a mass recall due to contamination, despite Jamaica being billed as a Third World Country. In addition, thanks to the performance of our athletes of the World Stage, there’s now an advantage of Brand Association to Jamaica thanks to Jamaican athletes such as Usain Bolt and Shelly Ann Fraser as can be seen in the video advertisements through this article and Reggae and Dancehall Music Putting Jamaica on the Map.

What this means is that Jamaican manufacturers cannot just make money from manufacturing unique Jamaican products but also becoming Processors for Raw Material form a client to make a Finished product, much as is the case with American company Apple having its products made by Foxconn and other Chinese Factories. 

We may not have a cost advantage due to the high electricity and importation costs, but we do have a quality advantage, allowing manufacturers and clients of these manufacturers to resell their products as value-added as they’re guaranteed the best quality and “Proudly Made in Jamaica”.

To quote the JMA: “The JMA is a strong advocate to strengthen linkages and seek investment opportunities in areas that are feasible for Jamaica, for example, pepper and orange concentrate and look to produce more value-added products. We need to move away from producing primary products which are processed in other countries and re-imported to Jamaica as an intermediary or finished product.”

Don’t forget we do have our own products that are unique to Jamaica as listed above. The Closing arguements of the JMA explains this Brand Jamaica and Quality arguement best point this out, quote: “Various countries have products that they have a comparative advantage, for example Jamaica with ginger, pepper, cocoa and coffee and so on, that we are able to command high premium prices globally as a result of quality. Therefore the differentiation is who can supply at the best quality and price, which is dependent on a country's resources”.

“Buy Jamaican build Jamaica” really means Processed Foods made from imported Raw Materials in Tin Cans, Plastic and Glass Bottle or Sachets that says “Made in Jamaica”.
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