Momentum of Jamaica’s Logistics Hub Initiative increasing

Despite delays in the Panama Canal construction, momentum is building for Jamaica’s Global Logistics Hub.

The Kingston Container Terminal is in the process of being privatised and three of the largest global terminal operators are competing for the concession to operate the port. The firms bidding for the region’s largest container transhipment port are the Port of Singapore, Dubai Ports World and a consortium comprised of Terminal Link, CMA CGM, China Harbour Engineering and China Merchant Holdings International.

Further evidence  of Jamaica’s increasing strategic role in regional cargo movements is the concurrent development of a large industrial port following the signing of an initial framework agreement between the Government of Jamaica and China Harbour Engineering Company (CHEC). The agreement contemplates the construction of an Industrial Park for heavy and light industries, a special economic zone, construction of a new container terminal and an electricity generating plant for the supply of electricity to the facilities comprising the project.

CHEC will also be responsible for all other supporting infrastructure such as bridges, roads, water and wastewater facilities and related services.

These port developments along with others taking place in the region, namely Cuba, Costa Rica, Colombia and the Dominican Republic, enhance the importance of the Panama Canal  which has to compete with the  Suez Canal for  traffic from Northeast Asia – US East coast. Also, Trade between Asia and the emerging markets in Latin America and the Caribbean is growing at double digit rates, hence, Jamaica’s preparation to become the fourth node in global supply chains.

The strategy of the Jamaican government is not limited to seaport development. Following the successful privatisation of Montego Bay International, the country is preparing to privatise the airport serving the nation’s capital. Both airports are currently expanding their cargo capacity.

While these large infrastructure projects are underway, efforts are well advanced in establishing a new Special Economic Zone (SEZ) regime to attract large Globally Integrated Enterprises to benefit from Jamaica’s more competitive position in the global logistics chain. Under this programme several areas will be designated as SEZs  where companies will benefit from efficient trade facilitation services and seamless interchange with the seaports and airports. These developments are leading to a total transformation of the Jamaican economy.

‘Embrace the Logistics Hub’ Minister Urges Businesses

Development of Jamaica into a global logistics hub will prove a massive boost for micro, small and medium sized enterprises (MSME) wishing to invest in, or grow their existing operations on the island, according to Anthony Hylton, Minister of Industry, Investment & Commerce.

Addressing the Jamaica Logistics Symposium in Kingston yesterday, Minister Hylton said that while the actions of the global capital markets may impact on MSMEs, the obstacles which firms face in trying to enter a market or industry are deliberately being tackled by the Government of Jamaica through the JLH initiative with support from the island’s international development partners, namely the World Bank and the IDB.

Urging this dynamic sector to embrace the Jamaica Logistics Hub, Minister Hylton said the GOJ was working hard to put the needs of the MSMEs at the forefront of the country’s future economic growth plan as encapsulated in the JLH.

He said: “The GOJ with support from our international development partners, namely the World Bank and IDB, are making special efforts to support MSMEs operating in Jamaica’s Logistics Hub to overcome the barriers to entry. Government will be facilitating economic activity related to the Logistics Hub Initiative in designated special economic zones (SEZ) spread across the country where industry clusters will be established linking large corporations and MSMEs. Together with supporting the development of supporting infrastructure for the Logistics Hub, the Government will focus attention on the users of the facilities.

“Those industry sectors targeted with potential for Jamaica’s Logistics Hub will be determined based on a detailed Industry analysis to be commissioned. This analysis involves a high-level benchmarking of Jamaica’s offerings against key international competitors based on current and future industry trends. The purpose of the exercise is to identify the most promising sectors, sub-sectors and business functions as potential targets for Jamaica’s Global Logistics Hub,” he said.

Small businesses are a critical aspect of the logistics industry in any part of the world and Jamaica will ensure that micro, small and medium enterprise (MSME) entrepreneurs are included in the economic zones, and become an integral part of the global value chain.

Programs to support entrepreneurship and skills development will also be rolled out across the country. The Human Employment and Resource Training Agency (HEART) together with the National Training Agency and the Jamaica Business Development Corporation (JBDC) will be leading entrepreneurship training and have developed entrepreneurship training modules which are currently being taught by the respective institutions.

“This is in keeping with the strategies for creating a culture of entrepreneurship as outlined in the GOJ’s MSME and Entrepreneurship Policy. As such, HEART is preparing a proposal for the full roll-out of entrepreneurship training, throughout all its programmes, which means that every HEART Trust trainee will be exposed to entrepreneurship skills development training. The institution is also looking at developing a curriculum for an introductory course for schools run by the Ministry of Education. It plans to offer training to Teachers’ Colleges, Universities etc., as well as employees within the private sector and public sector and will help to educate employers about the value of intrapreneurship, in an effort to encourage them to increase engagement with staff in a manner that will help boost the level of productivity within organizations as well as prepare existing employees to branch off in their own businesses.”

HEART and JBDC will be partnering with the MIIC in developing and rolling out this training initiative and getting buy-in from all key stakeholder organizations who also provide training, incubation, apprenticeships, internships and mentoring as well as knowledge transfer.

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Notes to Editors:
• The Logistics Hub Initiative represents the next stage in the evolution of Jamaica’s airports, seaports and industrial infrastructure. Jamaica’s world class logistics zones enhance distribution operations thereby allowing businesses based in Jamaica to fully integrate into globalised and complex supply chains.
• Jamaica’s Logistics Hub will consist of world class seaports (handling containers, dry bulk and liquid bulk commodities), airports, special economic zones, free zones, logistics parks, logistics centres, integrated intermodal transport capabilities, supporting infrastructure, telecommunications and trade facilitation mechanisms.
• With the right investment and global partnerships, Jamaica can become the transhipment and air cargo logistics hub of the Americas and the Caribbean’s strategic handling point for bulk commodities; the Latin America and Caribbean centre for aviation-related maintenance, repair and overhaul and ship repair and dry docking
• Large corporations and logistics service providers will be enticed to set up operations, control towers, headquarters and BPOs (business process outsourcing) in Jamaica.

Jamaica’s Logistics Hub Plans: “Failure is not an option”

When it comes to its long-ranging and dynamic plans to develop as an international logistics centre, failure is not an option for Jamaica, according to the country’s Minister of Industry, Investment and Commerce.

Addressing the Jamaica Parliament as his contribution to the 2013/2014 Sectoral Debate and speaking to the theme of Achieving Transformational Growth, the Hon. Anthony Hylton said:
“Let me make it clear that, in this mission, failure is not an option”

During a comprehensive address, Mr Hylton gave details of how Jamaica is establishing a growth and development strategy “that changes our present reality and transforms the Jamaican economy”. Outlining the growth agenda he explained that the core components of this drive are “strategic investments, improving the business environment, macro-economic stability, entrepreneurship and innovation, energy efficiency and human capital development”.

Jamaica has already attracted significant investment interest in its project as it prepares to become the “fourth node” in the global logistics chain, following in the footsteps of Rotterdam, Singapore and Dubai. Minister Hylton said: “The same investors who developed the other three logistics hubs are now at the table with us, seeking to carve out individual mega projects and to acquire and upgrade existing assets through public/private partnership arrangements.”

Minister Hylton said the objective of the Logistics Hub Initiative was to “integrate the Jamaican economy into the global value and supply chain” and pointed out that the Initiative is a “central plank in Jamaica’s overall growth strategy”.

He advised the House of Representatives that the Jamaica Logistics Hub will host a cluster of shippers, freight forwarders and couriers together with large global businesses with substantial cargo flows. Speaking of Jamaica’s “competitive advantage” particularly in the shipping sector, Minister Hylton said the key factors benefiting the Hub were the expansion of the Panama Canal to carry larger vessels and volumes of cargo, the “paradigm shift” in global trade corridors from North to South thus benefiting the BRIC emerging countries, Jamaica’s robust telecommunications infrastructure and the country’s strategic geographical position on major sea and air routes. He vowed the Logistics Hub Initiative would transform the Jamaican economy and benefit its people.

Jamaica has plans to construct an ultra-modern technology park at Naggo Head with 750,000 square feet of space and the potential to employ 13,000 people. The first 100,000 sq ft of space has been booked by a fast-growing business processing outsourcing (BPO) company which will employ some 600 staff in the coming months. Construction is scheduled shortly on 200 acres of land within the Caymanas Economic Zone which will form the first phase of a potential 1,700 acre logistics centre. Further plans are being developed with the Port Authority of Jamaica.

Minister Hylton said: “The Logistics hub will not only bring in excess of $US nine billion and tens of thousands of jobs for our people, especially our young people, but also transform Jamaica’s position in the global economy.”
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Notes to Editors:
• Jamaica’s Logistics Hub will consist of world class seaports (handling containers, dry bulk and liquid bulk commodities), airports, special economic zones, free zones, logistics parks, logistics centres, integrated intermodal transport capabilities, supporting infrastructure, telecommunications and trade facilitation mechanisms.

For Further Information Please Contact:
Elaborate Communications: Sean Moloney Tel: +44 (0) 1296 682356

Jamaica Signs Bilateral Investment Treaty With Kuwait

Jamaica has signed a Bilateral Investment Treaty (BIT) with Kuwait that will encourage and guide future investments into the Caribbean country.

The agreement signed between Anthony Hylton, Jamaican Minister of Industry, Investment and Commerce, and Kuwaiti Minister of Finance, His Excellency Mustafa Al-Shemali, is part of a broader high-level Ministerial Trade Mission to the Middle East Gulf States of Kuwait, Dubai and Abu Dhabi. It forms a crucial part of the Government of Jamaica’s push to create Jamaica into one of the world’s top four logistics centres.

The Bilateral Investment Treaty (BIT) between Jamaica and Kuwait will seek to provide fundamental protection for Kuwaiti investments in Jamaica, ranging from the usual national treatment and most favoured nation treatment, as well as guarantees for fair and equitable treatment for investors of either state.  It provides companies with the necessary legal standing in dispute settlement matters and also makes specific reference to corporate social responsibility for companies operating in either country.

The purpose of the Ministerial Mission to the Gulf States is to engage potential partners and investors in the region, as well as to promote investment opportunities in the logistics and other sectors in Jamaica.  In addition, the delegation is seeking to gain insight and greater perspective on global best practices in logistics in developing the Master Plan for Jamaica’s logistics industry.

The Ministerial Mission to the Gulf States follows similar Jamaican Government-led delegations to Panama as well as to China and Singapore to both benchmark Jamaica against its proposed developments in the logistics sphere and to pursue potential partnerships with investors in the logistics area.

The Minister’s visit to the Emirate State of Dubai will focus on the aviation aspect of the logistics project.  Securing investments into the project is also a significant aspect of the mission and is the basis of a number of the meetings planned during the mission.  While Dubai, is the main focus of the mission, the team will also take advantage of being in the region to hold meetings in Kuwait and Abu Dhabi with potential financiers and investors in the projects, as well as, other business opportunities that require investor support.

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Notes to Editors:

Specific objectives of the Mission are:

  • To sign the Jamaica-Kuwait Bilateral Investment Treaty to establish the parameters to guide investments into Jamaica
  • To achieve a clearer understanding of the major considerations in establishing Jamaica as a regional logistics hub, particularly in respect of the area of aviation
  • To explore potential partnerships with Sovereign Wealth Funds and other potential private sector investors for the development and operation of the various aspects of the  Jamaica Logistics project
  • To meet with the private sector and present business opportunities in all focus sectors, particularly in infrastructure and real estate/tourism
  • To engage Ministerial counterparts in Kuwait and the United Arab Emirates with a view to deepening commercial and industrial relations between Jamaica and each country.

World Bank offers to aid Jamaica’s Logistics Hub plans

Jamaica’s plans to become one of the world’s top four logistics centres has received a major boost after the World Bank committed to providing technical and other assistance for specific aspects of the proposed Global Logistics Hub initiative.

The World Bank Group, through its representative to Jamaica, Giorgio Valentini, has endorsed the Government of Jamaica’s plans for the logistics hub initiative, describing it as ‘transformational’ when implemented which will significantly enhance Jamaica’s potential for growth.

A 16 person delegation from the World Bank Group visited Jamaica last month for consultations on Jamaica’s Country Partnership Strategy which will feature the Logistics Hub Initiative. The Country Partnership Strategy will govern the relationship between the island and the World Bank between 2014 and 2017. The World Bank Group (WBG) support includes issues such as Public Private Partnerships, infrastructure needs and infrastructure investment funds, facilitation mechanisms, energy needs, capacity building and providing a skilled workforce. The WBG is also concerned with providing a safety net for the most vulnerable in society.

High level discussions have already started with a number of overseas investors to develop vast areas of prime real estate to handle increased volumes of air and sea cargo. Projects under discussion include growth of container throughput at the Port of Kingston ahead of the expansion of the Panama Canal, as well as the development of commodity ports to handle petroleum products, coal, minerals and grain; the development of an air cargo strong hold through the expansion of existing airports and construction of an air cargo airport as well as the construction of large scale ship repair dry docks and aircraft maintenance, repair and overhaul facilities. Special economic zones are also being conceptualised by a wide range of local and foreign investors.

Once completed the initiative, which is being spearheaded by the Jamaica Ministry of Industry, Investment and Commerce, will transform Jamaica into the fourth node or pillar in the global supply and logistics chain alongside Singapore, Dubai and Rotterdam. A critical element in the equation to make the Logistics Hub successful is the involvement of suitable, long-term investors. The Government of Jamaica is already in discussion with some prospective partners as well as looking for new ones.

The World Bank sees the initiative operating within the context of the Caribbean Growth Forum, a joint venture between the Inter-American Development Bank, the World Bank and the Caribbean Development Bank. The World Bank Group has already started to provide technical assistance in developing precursors of the master plan for the logistics hub and in support of the Port Community System.

To assess the ability of internal logistics to unlock the country, the World Bank Group has already started ground work on creating a GIS database, a trucking survey, a port and aviation survey, a regional trade survey, and an assessment of air, marine and ICT connectivity. This initial work should be completed by June 30, 2013, and will feed into the overall master plan. The master plan will serve to define how Jamaica should be positioned as a global hub, assess the internal logistics and the infrastructure and energy needs of the special economic zones being created and demonstrate how the logistics potential of Jamaica can motivate international interventions plus attract private sector investment.

The World Bank notes that thousands of jobs will have to be created to support the logistics hub. Efforts have already started to look at the training of human capital to fuel the needs of the hub and also strategically for export under special agreement with large markets like the US and Canada. This ‘export’ of Jamaican labour, can enhance the island’s comparative advantages of having the perfect geographical location, and a strong English speaking work force. Thousands of jobs are expected to be created in areas such as, mechatronics integration of marine engineering, (mechanical, electrical and informatics), various ship board professions such as electromechanical engineering, port operations management, heavy duty equipment operations, logistics and supply chain management.

Jamaica’s proposal to become the fourth node in the global logistics chain is a critical component of the Government’s growth strategy. The recent IMF staff-level agreement on the key elements of an economic program to be supported by a 48-month arrangement under the Extended Fund Facility (EFF), in the amount of US$750 million calls for reforms to improve growth-generating efficiency through enhancements to the business environment, increased competitiveness, and strengthened institutional capacity. Despite considerable inertia within multilateral circles due to Jamaica’s development record, the Global Logistics Hub Initiative has rekindled believe in the growth prospects of the country.

Meanwhile, the Minister of Industry Investment and Commerce, Anthony Hylton recently led a mission to Washington (February 18-22) to continue talks with the World Bank Group on additional areas of collaboration and support for the Logistics Hub.

The Jamaican Mission held a number of meetings with the World Bank, the International Finance Corporation(IFC), the Multilateral Investment Guarantee Agency (MIGA), the Inter-American Development Bank (IDB), and the Inter-American Investment Corporation (IIC). Meetings were also held with US Chamber of Commerce and the US Trade and Development Agency. The US Chamber offered to promote the Logistics Hub among its membership while the USTDA is assessing specific components of the Logistics Hub for grant assistance especially where these activities support US trade and development. Separate meetings were held with the law firms Curtis, Mallet-Prevost Colt & Mosle and also Sandler, Travis, Rosenberg.

A technical mission from the World Bank Group will again be in Jamaica from March 4-March 18 to commence work on the internal/external logistics assessment of the initiative.

—ends—

Notes to Editors:
• The Logistics Hub Initiative represents the next stage in the evolution of Jamaica’s airports, seaports and industrial infrastructure. Jamaica’s world class logistics zones enhance distribution operations thereby allowing businesses based in Jamaica to fully integrate into globalised and complex supply chains.
• Jamaica’s Logistics Hub will consist of world class seaports (handling containers, dry bulk and liquid bulk commodities), airports, special economic zones, free zones, logistics parks, logistics centres, integrated intermodal transport capabilities, supporting infrastructure, telecommunications and trade facilitation mechanisms.
• With the right investment and global partnerships, Jamaica can become the transhipment and air cargo logistics hub of the Americas and the Caribbean’s strategic handling point for bulk commodities; the Latin America and Caribbean centre for aviation-related maintenance, repair and overhaul and ship repair and dry docking
• Large corporations and logistics service providers will be encouraged to set up operations, control towers, headquarters and BPOs (business process outsourcing) in Jamaica.

For Further Information Please Contact:

Elaborate Communications: Sean Moloney Tel: + 44 1296 682356