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