It is a case of diversification

Dec 07, 2017 Letters

Dear Editor,
We have before us a revenue stream diversification question as it pertains to economic stability and risk mitigation.
Rice, sugar, lumber, bauxite, gold and oil are all good fundamental commodity markets currently being penetrated. However, the adjacent value added goods they support are being under-leveraged and the answer to the question of how such goods are utilised in the Ecotourism Strategy should be clear.
Rice is now venturing into the premium segment of the commodity via a focus on Basmati rice as mentioned by His Excellency, and its premium status enhances the ecotourism message. Accessing the rice-based beverage alcohol space is an asset as this may be best suited for our smaller scale vs. competitors.
Rum has seen measured success and increased joint investment with Guysuco. It would enable further increases in global market share and increase the stability in our sugar industry. A change in the local soft drink industry from corn syrup as a sweetener to sugar could also provide significant gains for the sugar industry.
This could be supported by a revision in import duties on the competitive product and simultaneous product ingredient changes by DDL and DIH. In addition, the organic agriculture message that both boosts the Ecotourism Strategy and expands interest in Guyana’s green status, globally, must be seriously considered.
Abrasives such as Thin Wheels are not being made locally, thus losing opportunities for important margin gains in bauxite based products and limiting entry into the lucrative off shore oil drilling market that is potentially upcoming in 2020. And if there is an unfavourable change with Venezuela or Exxon these products could still be used in other countries and markets.
This opportunity may be captured by timely investment in the near term. An expansion in local jewelry making capability would provide a boost to gold margins and reduce risk exposure to commodity market prices.
This sector is another good example of where we can have a strong marketing campaign that links it to the ecotourism message, whether it be a focus on unique artisan custom jewellery or otherwise. The current strategy on housing expansion should be giving a margin boost to the lumber sector as speed picks up in housing development.
Planned Port development if combined with on shore ship building sector development would have a direct positive impact on the multiple revenue streams thus far mentioned, allowing us to both utilise some of our commodity base while easing the cost to transport these commodities and enabling the ecotourism sector.
These adjacent value added products will help continue to develop industry in our Cooperative Republic while adding increased capability to our populace that enables them to attain the higher income that comes with such industry expansion. Inherent in such expansion is profit margin improvement and risk reduction that comes from lower exposure to the price fluctuations in the commodity markets.
Best regards,
Jamil Changlee

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