Feature writing.....
Guyana’s investment climate continues to appeal to investors. Data provided supports this claim as it reveals that there has been a significant increase in investments over the years and despite the global economic crisis which impacted severely on developed countries, Guyana’s economy remained stable.
With the exception of decreases in the wood sector initially for 2009 and bauxite exports, Guyana rode the crisis very well and the economy performed well in all other areas.
Head of the Guyana Office for Investment (Go-Invest) Geoff DaSilva stated that the number of projects has been increasing substantially along with the average investment per year as compared to previous years.
Expansion and growth in various sectors
Agriculture
A number of new investments was made in Region 9 where approximately 70,000 acres of land will be utilized to facilitate three large projects in Pirara, Rupununi where both Caribbean and North American companies have invested in soybean, livestock, cattle and rice.
A target of 230 projects in the agriculture sector is set for 2010 based on the rapid growth that has been reflected over the past years.
An employee of ACME Geo chemical laboratory preparing a sample for processing.
In the first quarter of 2010 Go-Invest worked with 67 projects, a figure which represented the total number of projects for 2008 in the sector.
This amount increased rapidly in 2009 when 152 projects were facilitated and the sector has seen continued expansion as a result of efforts by Government to develop more medium sized to larger projects.
Services sector
This sector experienced rapid growth aided by new developments in trade between Guyana and Brazil.
There is now a commercial zone in Lethem with electricity access, water supply and other facilities in addition to a light manufacturing and trucking zones and truck and bus terminals.
Approximately 40 businesses were granted long term leases to operate in Lethem’s commercial zone with two already in operation while nine are currently under construction.
This includes a number of sub-sectors such as medical, financial and retail/ wholesale distribution
Construction continues to flourish in this sector which also saw an expansion of established building companies and new companies coming on board.
Readymix cement companies gained substantial investment during the last year with three new companies coming on board.
In 2007 “Readymix” was the only company providing ready mix cement in the sector and most of the construction work had to be done manually using traditional methods.
Today, there are four ready mix cement companies owned by both Guyanese and foreigners among which are BK International, Toolsie Persaud Limited and the original company “Readymix” which continues to operate in Guyana.
A target of 160 projects has been set for the sector which also includes sub-sectors such as medical, financial and retail/wholesale distribution. A total of 150 projects were aided in this sector in 2009, far surpassing the initial target of 57.
Light manufacturing
Companies are also venturing into different areas of investment in the light manufacturing sector where major companies are investing in the manufacturing of products or inputs for construction of products that were previously imported such as windows, steel rods and water tanks.
An employee preparing materials to be used in making windows.
This, DaSilva said is very significant since it means that more foreign exchange is being saved and more employment is created. Another benefit is the assurance of better and timely delivery of the product as opposed to previously when construction progressed slowly because of the amount of time it took to source building materials especially since the construction sector has been continually expanding and demand remains high.
Growth in the financial /medical sub-sectors
A visit to the Diamond New Housing Scheme will convince almost anyone of the sustained growth in the financial sector. There are currently three banks under construction in the emerging town.
Though there is a significant increase in Foreign Direct Investments (FDI) in terms of foreign projects, there is a more rapid increase in local investments as reflected in the number of local companies that is investing in Guyana.
A new private hospital under construction in Belvedere, Corentyne, Region 6.
This sector has also recorded an expansion in areas of micro credit and medical facilities as seen by the ongoing partnerships between the Georgetown Public Hospital and other foreign entities.
There is also a new investment in a private hospital under construction in Belvedere, Berbice.
Information Communication Technology (ICT)
This sector has seen huge investments which will continue this year with Guyana Telephone and Telegraph Company (GT&T) investing US$30M and Government in partnership with Brazil investing between US $15M and $40M in fibre optic cables.
Additional investments are being made in two new call centres this year which are expected to provide employment for 5000 people.
Investments in this sector, though not as large as other sectors provide huge employment and positive spin-offs since it is non-traditional and low carbon.
Wood sector
In the wood sector there was a decline in early 2009 which subsequently changed as new investors ventured into production.
According to DaSilva, 70 projects are targeted for this year in the wood sector.
Tourism
This sector has been growing consistently over the last 15-18 years as emphasis is now placed on encouraging more investment in eco-lodges which are needed to grow the industry.
Go-Invest is currently working with companies in the United States, Dominica and Suriname which have done significant work in this regard.
In addition to Baganara, Rockview and Arrowpoint there is need to increase the accommodation capacity for visitors to the interior in order to advance eco-tourism.
There was an expansion in the hotel industry for the 2007 cricket World Cup which equipped Guyana with over 1000 good quality rooms.
In 2006 over 60 projects in tourism came on stream with the construction of new hotels.
This trend continues with the upgrading of Hotel Tower and Pegasus where significant work will commence.
Go-Invest also worked at facilitating the Princess Hotel’s change in ownership and expansion, the opening of its Casino and the soon opening of an entertainment recreational complex expected later this year.
The Go-Invest Head stated that discussions are underway with the National Bureau of Standards to have tourism defined as a separate sector instead of being recorded under other services, so that when calculating Gross Domestic Product (GDP) its real impact on the economy could be calculated.
Once this is achieved, the impact of its contribution to GDP may be a surprise, DaSilva concluded.
Energy
Emphasis is also being placed on alternative energy sources such as hydro power, wind and solar.
Go-Invest is currently working on six projects including the wind project at Hope Estate.
In addition to the Amaila Falls hydro project discussions are ongoing for another hydro project with some major Brazilian companies and a number of smaller solar projects in the making.
Meanwhile Takutu Oil will soon commence drilling in the Takutu basin in the Rupununi along with CGX and Exxon which are expected to commence drilling early next year.
Bio mass and other energy sources are also being explored in the context of the Low Carbon Development Strategy (LCDS) which include different types of trees being grown and harvested for energy.
An ethanol project involving the Guyana Sugar Corportation (GuySuCo) and other projects in bio mass and wind are currently being explored since these have the potential to attract huge investments and foreign exchange.
Mining
Go Invest has worked with five mining projects, but according to DaSilva this does not reflect the reality of what is happening in the mining sector which has seen massive investment.
Foreign Direct Investments
Guyana’s performance in attracting Foreign Direct Investments has been commendable especially in 2008 when according to the United Nations Conference on Trade and Development World Investment Report 2009 where Guyana was rated 11th in the world. According to DaSilva, when compared to other countries in terms of the size of the economy or Gross Domestic Product (GDP) and the number of FDIs gained in one year, Guyana was highly placed.
Investment trends
In 2010 a target of 613 projects that includes ‘roll overs’ has been set by Go-Invest. This amount exceeds that of 2009 when a target of 325 was set but in reality 457 projects were facilitated in the various sectors while in 2008 a total of 229 projects were aided.
DaSilva outlined diversification as one of the key factors in terms of business activity and investment which is essential to the sustainability of Guyana’s economy.
This he said could only be maintained through additional new sectors and an increase in traditional activities.
Some of the machine parts that were manufactured in Ghamandi's establishment.
New Investments
Government’s plan to attract more overseas Guyanese investors has been highly successful given the following figures recorded over the past three years.
In 2008, Go-Invest recorded 229 projects of which 44 were overseas Guyanese-owned interests.
In 2009 this number increased to 83 while a target of 112 overseas Guyanese projects has been set for 2010.
The Pegasus Hotel where expansion works are ongoing.
According to DaSilva, the majority of those investments are from Guyanese living in the United States and Canada along with a small number from CARICOM countries.
This, he attributed to the impact of the global financial crisis on the US/Canadian economies which are not as lucrative as before, thus influencing more Guyanese to invest in Guyana.
“We are very happy that Guyanese are coming back and investing especially in the machinery sector, in agriculture, wood and to some extent tourism,” DaSilva said.
Employees at ACME Laboratory at work.
Currently there are machinery entities owned by overseas Guyanese in Enmore, Coldingen and West Berbice which manufacture special parts for equipment in the agricultural and transportation sectors.
Engineering and Computerized Manufacturing Establishment
Overseas Guyanese investor Bob Ghamandi operates an Engineering and Computerized Manufacturing establishment in Enmore, East Coast Demerara. Ghamandi said that “the country is on the right track,” and the progress that is taking place in Guyana is what has inspired him to invest here. Ghamandi manufactures machinery parts and other equipment for both the local and export market.
Bob Ghamandi demonstrates how to operate a piece of equipment.
Geo-chemical Analysis Laboratory
Acme Labs, a Canadian company which conducts Geo-chemical analysis for large mining companies, also capitalized on the positive investment climate in Guyana.Regional Manager of ACME, Rory Forde attributed Guyana’s stable political and economic climate is what influenced the company to invest here. “Guyana is a very stable country in terms of business investment, there is a stable government in place and it does not have some of the problems that other countries have. The economic environment is also stable,” Forde stated.
Regional Manager of ACME Laboratory Caribbean Rory Forde.
Building materials manufacturing
Gafoors Group of Companies is one manufacturer that has begun bringing forth new products to benefit from Guyana’s growing economy.
A piece of equipment used in production.
Chief Executive Officer of the Gafoors Group of Companies Mohammed Ali explained that the Company’s expansion and diversification strategy is based on Government’s development plans.
“The housing sector has shown tremendous growth in the last eight years which is mainly due to the initiative taken by Government to put a roof over everyone’s head. Our diversification and expansion strategy is tied into what is happening in the economy,” he said.
A new private hospital under construction in Belvedere, Corentyne, Region 6
Earlier this year Chief Executive Officer (CEO) of Roti Hut/Rituals Guyana Naeem Nasir also alluded to the development transformation in Guyana over the years and Government’s efforts to encourage a private sector which served as the motivational factor behind the $100 M investment in the establishment of the Roti Hut, Rituals Coffee House and Nestle Ice Cream Parlour at the Cheddi Jagan International Airport (CJIA).
Chief Executive Officer of Gafoor's Group of Companies Mohammed Ali.
“The opening of these stores represents the stability and the confidence of the Government to maintain a positive investment climate in Guyana,” Nasir said.
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