Growing Fiji’s Manufacturing Sector A presentation at the Fiji Business Forum Suva 4-Jun-2011
Mar 29, 2015
Growing Fiji’s Manufacturing Sector
A presentation at the Fiji Business Forum
Suva 4-Jun-2011
Factors enabling Manufacture
• Land
– Raw Material
• Labour
– Intelligent workforce
– Cost-effective
• Capital
– Equipment, Plant & Machinery
• Entrepreneurship
• Market Access
Where we have a natural advantage
• Raw Material proximity:
– Timber / wood (furniture)
– Agri processing (sugarcane, pawpaw, pineapple, dalo,
cassava, coconut, ginger, tobacco, herbals)
– Processed Marine based (e.g., Starkist)
– Mining & minerals (incl cement?)
– Water
– ‘Natural / Eco’ (organic, bio-tech)
– Dairy, meat & poultry processing
-
2
4
6
8
10
12
14
16
FJ$
mill
ion
2001 2009
Fiji's Import of Wooden Furniture
Jan-Sep $10.76 m
$2.32 m
$14.35 m
Source: Fiji Bureau of Statistics
Where we have a natural advantage
• Raw Material proximity:
– Timber / wood (furniture)
– Agri processing (sugarcane, pawpaw, pineapple, dalo,
cassava, coconut, ginger, tobacco, herbals)
– Processed Marine based (e.g., Starkist)
– Mining & minerals (incl cement?)
– Water
– ‘Natural / Eco’ (organic, bio-tech)
– Dairy, meat & poultry processing
Other advantages / reasons
• Non-price competition:
– ‘Fiji’ – perception of pure & unspoiled (can we do herbals?)
– Consumer culture similar to PICs and A&NZ (comfort in dealing,
quality and disclosure standards)
• Strategic:
– Food security (Oxfam prediction)
– Trade Balance & forex imperatives
– Employment & income generation
• Based on EPAs, RTAs:
– TCF
• Historical: entrepreneurial daring
What we DON’T always have
• Large domestic market
• Economy of scale
• Labour Productivity
• Adequate supply of skilled tradespeople
• Access to R&D / Technology
• Geographic / Logistic convenience
Why we need to continue with Manufacture
• Spine of sovereignty
• Value addition opportunities / backward
integration / market access
• GDP growth
• Multiplier Effect
• Flow-on effect
• Employment & Income generation
John Smith started the day early having set his
alarm clock for 6 A.M.
While his coffeepot was
perking, he shaved with his electric razor
(Made in Japan )
(Made in China )
(Made in Philippines )
Why Americans can’t find Jobs…*
* - source unknown
He put on a trendy shirt , his
designer jeans and tennis
shoes
After cooking his breakfast in his new electric skillet
, he sat down with his
calculator to see how much he
could spend that day.
(Made in Sri Lanka ) (Made in Singapore )
(Made in Vietnam )
(Made in India ) (Made in Mexico )
Setting his watch to the radio
, he got into his car
, filled it with gas
and continued his search
for a good paying AMERICAN JOB .
At the end of yet another discouraging and fruitless
day checking his computer
, John decided to relax for a while.
(Made in Taiwan ) (Made in India ) (Made in Germany ) (From Saudi Arabia )
(Made in Malaysia )
He put on his sandals ,
poured himself a glass of wine
, turned on his TV
and wondered why he
can't find a good paying job in AMERICA
.
(Made in Brazil )
(Made in France )
(Made in Korea )
AND NOW HE'S HOPING HE CAN GET SOME HELP FROM HIS PRESIDENT…
( Made in Kenya )
Industry % to GDP
Industrial Growth
Forex Reserves Ranking
Foreign Direct
Investment Ranking
Brazil 29% 4.4% 7 16
Russia 41% 1.9% 3 12
India 29% 4.8% 5 29
China 49% 10.7% 1 5
Mauritius 25% 5% 110
Fiji 13.5% 2.5% ~ 132
Therefore:
What will help ….1
• Continuing tariff support (small domestic market & no economies of
scale)
• Cautious approach on EPAs with countries that are ‘kicking away
the ladder’
• Recognition of our size & limitations when mingling with
manufacturing giants
• National focus on Productivity & Quality
– Skill based National Training Plan
– Quality initiatives
– Enabling IR environment
• Improved infrastructure (roads, bridges, electricity, water, telecom)
What will help ….1
• Continuing tariff support (small domestic market & no economies of
scale)
• Cautious approach on EPAs with countries that are ‘kicking away
the ladder’
• Recognition of our size & limitations when mingling with
manufacturing giants
• National focus on Productivity & Quality
– Skill based National Training Plan
– Quality initiatives
– Enabling IR environment
• Improved infrastructure (roads, bridges, electricity, water, telecom)
• Stability / predictability in Taxes & Legislation
• Long Term Industrial Policy (LTIP) based on competitive advantage/ strategic needs (FEDB ?) and a consultative process
• Trade delegations & overtures based on LTIP (publicity / leaflets based on that)
• Tax Free Zones in viable areas of Viti Levu (Naitasiri, Tailevu, Namosi, Rakiraki)
• Forced value addition?
• Price controls that encourage investment
• Control over imports / level playing field on contents (fortification, NIPs, ingredients)
• Encouraging display of Local products
• Continue export incentives
• Job creation subsidy
What will help …. 2 too!
• Stability / predictability in Taxes & Legislation
• Long Term Industrial Policy (LTIP) based on competitive advantage/ strategic needs (FEDB ?) and a consultative process
• Trade delegations & overtures based on LTIP (publicity / leaflets based on that)
• Tax Free Zones in viable areas of Viti Levu (Naitasiri, Tailevu, Namosi, Rakiraki)
• Forced value addition?
• Price controls that encourage investment
• Control over imports / level playing field on contents (fortification, NIPs, ingredients)
• Encouraging display of Local products
• Continue export incentives
• Job creation subsidy
What will help …. 2 too!
Vinaka vakalevu