On Thurs­day evening, as Trade and In­dus­try Min­is­ter Paula Gopee-Scoon ad­dressed the In­di­an High Com­mis­sion­er Arun Ku­mar Sahu and the Ch­agua­nas Cham­ber of In­dus­try and Com­merce (CCIC) at Pas­sage to Asia restau­rant in Ch­agua­nas, she was adamant the man­u­fac­tur­ing sec­tor was ro­bust.

“We have a very strong man­u­fac­tur­ing sec­tor,” she said at the event.

It was a bold de­c­la­ra­tion, as days ear­li­er Unilever Caribbean Ltd gave no­tice that it would cease pro­duc­tion at its Trinidad plant by Ju­ly 31.

Unilever has been the pro­duc­er of a num­ber of glob­al­ly recog­nised brands such as Breeze, Quix, Cif, Lifebuoy, Axe, Dove, De­gree, Suave, and Lip­ton.

How­ev­er, for most con­nect­ed to the sec­tor, the news of the pend­ing de­par­ture was not un­ex­pect­ed.

The Man­u­fac­tur­ing As­so­ci­a­tion told the Busi­ness Guardian that the pro­tract­ed de­par­ture of Unilever had been a mat­ter of dis­cus­sion for some time.

“Unilever’s de­ci­sion is not an ad hoc one; the process has been de­bat­ed and dis­cussed among the mem­bers of the union for some time, cul­mi­nat­ing with the present out­come,” the as­so­ci­a­tion said.

Min­is­ter Gopee-Scoon her­self ex­plained that Unilever’s op­er­a­tions in Trinidad had been pro­longed due to the sale of their Spreads Busi­ness to KKR for €6.825 bil­lion in 2018. The ac­qui­si­tion lead to KKR’s af­fil­i­ate Up­field en­ter­ing in­to a con­tract with Unilever Caribbean to con­tin­ue pro­duc­tion in Trinidad un­til Ju­ly. Unilever op­er­a­tions in T&T would sole­ly be dis­tri­b­u­tion of im­ports from their Latin Amer­i­ca fac­to­ries there­after.

“So they con­tin­ued to pro­duce the Spreads on a con­trac­tu­al arrange­ment to Up­field of course, but alas, with glob­al con­cern like that with plants all over the world, it fell to them to make the nec­es­sary busi­ness de­ci­sions in terms of the op­ti­mi­sa­tion of re­turn of in­vest­ment,” said the min­is­ter.

In 2019, Unilever be­gan re­struc­tur­ing its busi­ness, and sev­er­al prod­ucts which had pre­vi­ous­ly been pro­duced in Trinidad were now be­ing im­port­ed from their ware­hous­es in Latin Amer­i­ca.

Oil­field Work­ers’ Trade Union branch pres­i­dent and Unilever Caribbean Ltd em­ploy­ee Neil Mc McEach­nie said that re­struc­tur­ing, which lead to the re­trench­ment of over 250 work­ers in 2019, was the pre­cur­sor to their an­nounce­ment last week.

McEach­nie lead a protest out­side Unilever’s of­fices back in 2019 but, on this oc­ca­sion, most work­ers had ac­cept­ed the cause had been lost.

“The oth­er tragedy is the fact that in an econ­o­my where there is shrink­ing busi­ness ac­tiv­i­ty, and re­moval of a (ma­jor part of) man­u­fac­tur­ing sec­tor, there re­al­ly is noth­ing for per­sons to turn to. All we are go­ing to turn to is be more re­liant on goods and ser­vices pro­duced in an­oth­er lo­ca­tion,” he told the Busi­ness Guardian.

The move has high­light­ed a short­com­ing with­in the sec­tor as Gopee-Scoon ad­mit­ted Up­field and Unilever’s de­ci­sion was dri­ven by the fact that cur­rent­ly, the man­u­fac­tur­ing sec­tor did not have the ca­pac­i­ty to com­pete with larg­er plants in Latin Amer­i­ca.

“We were nev­er cer­tain that this busi­ness was ours to keep from the point of view that Up­field would have done what was best for Up­field. So it’s well known that Up­field has a plant in Latin Amer­i­ca, which is a much larg­er plant than Trinidad and on ac­count of economies of scale. I think that they were able to pro­duce there (at that plant), pro­duce the prod­uct at a much low­er price,” she said,

“We nev­er like to see the end of busi­ness in Trinidad. We look at the re­turns to the coun­try in terms of the per­sons em­ployed and the rev­enues to the gov­ern­ment. How­ev­er, at the end of the day, it’s not a de­ci­sion for us.”

The min­is­ter said there would be a re­view of strate­gies to keep the lo­cal man­u­fac­tur­ing sec­tor com­pet­i­tive by cre­at­ing con­nec­tions across the re­gion.

“We don’t have the ca­pac­i­ty cur­rent­ly, we just don’t have it,” she said, “the ca­pac­i­ty is spread across the re­gion. And so we will con­tin­ue to op­er­ate in­tra-re­gion­al­ly as we ex­port goods in­tra-re­gion­al­ly among each oth­er. “

She said the sec­tor was al­so look­ing at im­prove­ment strate­gies as well.

“We will look for­ward to fur­ther­ing the man­u­fac­tur­ing sec­tor. It (the sec­tor) re­mains con­tin­u­al­ly en­cour­aged to think of new prod­uct lines, new process­es, in­no­v­a­tive prod­ucts, that would re­al­ly find a place in the glob­al mar­ket space and I think glob­al mar­ket space be­cause we re­al­ly have to fo­cus on the ex­tra-re­gion­al mar­kets to grow the busi­ness of our ex­port busi­ness,” she said.

De­spite Unilever’s pend­ing de­par­ture, the TTMA was not of the view the sec­tor had been weak­ened.

In an emailed re­sponse to ques­tions from Guardian Me­dia, the TTMA said they were look­ing for­ward to fill­ing the space va­cat­ed by Unilever.

“TTMA sup­ports the busi­ness de­ci­sion of Unilever and recog­nis­es that this out­come opens up the space for an­oth­er lo­cal man­u­fac­tur­er to gain mar­ket share and fill the gap which Unilever has left. There has been dis­cus­sion among var­i­ous stake­hold­ers to oc­cu­py the space that Unilever once held in the mar­ket,” the as­so­ci­a­tion said, adding that even with Unilever’s ex­it, the sec­tor was healthy in T&T.

“From our feed­back, mem­bers of the man­u­fac­tur­ing com­mu­ni­ty are per­se­ver­ing and, in some in­stances, rein­vest­ing in their op­er­a­tions, re­tool­ing and rein­vent­ing them­selves to take ad­van­tage of the post pan­dem­ic pe­ri­od. On­ly last week Wit­co launched the ex­pan­sion/up­grade of its man­u­fac­tur­ing fa­cil­i­ty, an $80 mil­lion- dol­lar project, there­by show­ing con­fi­dence in the T&T econ­o­my. There would al­ways be chal­lenges for the non-en­er­gy man­u­fac­tur­ing sec­tor in T&T, name­ly the ease of do­ing busi­ness: VAT re­pay­ment, il­lic­it trade and avail­abil­i­ty of for­eign ex­change,” the as­so­ci­a­tion said.

The as­so­ci­a­tion how­ev­er felt these con­cerns were in the process of be­ing ad­dressed by the gov­ern­ment, as the as­so­ci­a­tion had been in talks with the Trade Min­is­ter with re­gard to po­ten­tial changes to as­sist the sec­tor’s de­vel­op­ment.

The as­so­ci­a­tion felt de­spite Unilever and Up­field opt­ing to use ex­ter­nal fac­to­ries, T&T’s sec­tor was in­deed still at­trac­tive to man­u­fac­tur­ers.

“The eco­nom­ic con­di­tions re­main the most com­pet­i­tive in the re­gion. Some of the ar­eas for our com­pet­i­tive­ness are, in­ter alia, ac­cess to cap­i­tal, cost of cap­i­tal, rel­a­tive cheap en­er­gy, skilled labour force and en­tre­pre­neur­ship. Thus, T&T re­mains the most ide­al des­ti­na­tion for man­u­fac­tur­ing and in­vest­ment in the re­gion to­day.

“As dis­cussed there are some mea­sure that erodes the com­pet­i­tive­ness that man­u­fac­tur­ing face,” the TTMA said.