Freight costs causing negative impact
An operator of a local manufacturing plant is crying out over high freight costs, which he says are impacting negatively on the company’s operations.
General manager of McBride Caribbean Limited Ricardo Strickland said freight costs had increased by close to 50 per cent over the past five years and this was something the company was trying its best to manage without having to increase prices of its products.
Meanwhile, Minister of Industry and Commerce Donville Inniss agreed that there was a challenge with costs and efficiency at the Bridgetown Port that needed to be addressed.
Inniss said the shipping arrangements needed to be analysed “from several angles” to see how best to make it easier for Barbadian manufacturers.
The two were speaking to the media following a tour of McBride Caribbean Limited on Wednesday.
“Most of our raw materials are sourced from extra-regional countries simply because they are not available within the Caribbean. So we are speaking of North America, Europe and even Asia,” said Strickland.
“We are susceptible to fluctuations in exchange rates as well as increased energy cost, because all of these raw materials have to be imported and they come by ocean freight. Over maybe the last five to six years we have seen ocean freight increased by close to 50 per cent and we have to manage within that environment,” he said.
Strickland said there was also some challenges in entering new markets in that the product had to be registered with distributors who were “willing to stay the course” which could take as long as one year or more.
He said as it relates to future growth, the company was pursuing markets “mainly” in Central and South America as well as focusing on new product development. Strickland said brand acquisition was also on the cards once they were able to find a brand that was willing to sell. The company also plans to do contract manufacturing.
“In terms of our major challenges, naturally high and increasing operational costs have been a constant challenge for us. The new Municipal Solid Waste Tax added to that burden and we got the bill last week,” added Strickland.
McBride Caribbean Limited currently employs 26 people. It is the manufacturer of four brands of aerosol products – Bop, Suretox, Beep and Go.
The company currently exports about 85 per cent of its production to 23 territories in the Caribbean and the Americas, resulting in roughly $17 million in foreign exchange annually. Barbados represents the other 15 per cent of production.
“McBride is a net foreign exchange earner for the country and has been for some time. It has always had an export focus. Our focus is to improve and increase the foreign exchange we make to the Barbados economy,” added Strickland.
Inniss said when it came to issues relating to import and export he believed the Bridgetown Port could be “far more efficient than it currently is”.
“There may very well be some labour arrangements over there that are very archaic and that we obviously need to address. I keep hearing all the time that it is a matter of the [trade] union. The union is not the employer. It is the government of Barbados through the Port Authority that is the employer . . . Obviously the Bridgetown Port is a matter that we cannot bury our heads in the sand about,” said Inniss.
“We cannot run away from that particular issue. Once the Bridgetown Port is deemed in many respects to be a good port and a pretty efficient port, it is also not one of the most cost effective ports around. At least [based on] what is being reported to be by the exporters of Barbados, as well as importers,” added Inniss.