Sat | Dec 3, 2016

Not so fast! LASCO boss threatens to move project to Trinidad over sugar cess

Published:Saturday | April 25, 2015 | 12:00 AM
Lascelles Chin

Lascelles Chin, head of LASCO, one of the country's largest food manufacturers, has signalled that he might have to shelve his company's US$40 million expansion project if the Government goes ahead with plans to impose a cess on imported refined sugar.

He contends that if the Government goes ahead with plans to implement the tax, it would be "one of the greatest injustices to the manufacturing industry as sugar remains one of the largest ingredients of many manufactured products, particularly in the beverage industry".

Yesterday, the Jamaica Manufacturers' Association (JMA) also expressed grave concern about the impending tax, noting that it was deeply disappointed with Agriculture Minister Derrick Kellier's comments regarding the proposed cess on refined sugar.

On Tuesday, Kellier announced that a tax would be placed on imported refined sugar, adding that it was part of the Government's plans to restructure the regime the Governing the importation of refined sugar.

Kellier also indicated that imported refined sugar was being leaked to the local retail trade.

 

Cannot compete with Trinidad

 

However, Chin charged that "if sugar is taxed, we will not be in a position to do the expansion and achieve the objectives as we cannot compete with Trinidad. This situation is not only unique to LASCO, but to all the other local food manufacturers.

"Our team was planning an overseas trip to have discussions on our planned expansions, however we are reconsidering this and may cancel our trip and go to Trinidad instead to do our expansion there so that we can produce our products there competitively," Chin said in a Letter to The Editor.

He argued that it would be an insult to local manufacturers to charge a cess on imported refined sugar while the finished products from Trinidad did not attract any charges, "making this even more uncompetitive for local Jamaican manufacturers".

The LASCO boss appealed to Prime Minister Portia Simpson Miller to intervene in an attempt to try and stop the imposition of the cess.

In a press release yesterday, the JMA urged Kellier to "stop implicating manufacturers".

It was incensed by the minister's comments that refined sugar was being leaked to the local retail trade.

"If there is evidence to confirm that manufacturers are selling refined sugar to retailers, then they should be prosecuted," the JMA declared.

In his contribution to the Sectoral Debate, Kellier charged: "We will not allow imported refined sugar, meant for the manufacturing sector, to continue to be leaked to the retail trade and undermine our raw-sugar production and rob the Government of much-needed revenue."

Kellier had said the decision to impose the cess on imports was agreed on following ministry consultations with industry stakeholders.

However, the JMA said contrary to the minister's comments, the agriculture ministry does not have the full support of the entire sugar industry as the JMA and its members would not support this initiative.

The JMA insisted that the imposition of a cess would adversely affect the competitiveness, cash flow, and jobs of more than 5,000 persons employed to companies that utilise refined sugar in their production process.