Top 5 investment opportunities in Trinidad and Tobago for 2013
For the past ten years, global foreign direct investment and real economic growth have favoured developing economies. Latin America and the Caribbean is expected to stay within projected growth rates of 3 to 4 percent over the next five years.
The region was able to sustain an average GDP growth rate of 4 percent from 2003 to 2012 and increase its share of global FDI, reaching record highs of 6.7 percent FDI growth in 2012.
Trinidad and Tobago’s stable macroeconomic performance, and proximity and trade ties with its Caribbean and Latin American neighbours, make it an ideal investment location.
Here are some of the more lucrative opportunities:
1. Downstream Energy
T&T is an minor oil producer on the global market, but a major player in downstream manufacturing. It is the largest global producer of methanol and ammonia, two important products of natural gas.
With contracting markets the new normal, the Ministry of Energy and Energy Affair is looking at new ways to use hydrocarbon reserves.
Melamine moulding production, downstream from ammonia production, is a niche manufacturing business that has not yet been commercially explored in T&T.
The National Energy Corporation of Trinidad and Tobago needs partners to exploit this business and begin producing and exporting high-demand melamine derivatives like dinnerware, adhesives, laminates and coatings. These products pair well with product manufacturing for the agricultural, construction, electronics and automotive industries.
2. Data Centers and BPO
Large-scale data centers rely on sites being energy-efficient and Trinidad and Tobago punches above its weight here, with some of the lowest rates across Latin America and the Caribbean.
Investors can expect attractive incentives and solid infrastructure at the Tamana Intech Park, a government-initiated, light eco-industrial park dedicated to high-value manufacture, ICT and agro-industrial uses. Over 20 lots with full access to utilities are available to investors. Special tax exemptions apply.
If you’re looking for an independent review of T&T’s BPO investment potential you’re in luck. With a capable and educated workforce and solid infrastructure, the country is right for data creation and service-based industries like telemarketing, contact centres and help-desks.
Experts estimate that based on the rate of university graduates in sectors like engineering, ICT, and business management, the country can provide an employee base of 5,000 to 6,000 for BPOs.
Hotels and attractions are the mainstay of this sector, but global trends in tourism FDI show that there may be an unmet need for investment in high-profile activities like touring.
Trinidad and Tobago revised its Tourism Development Act to provide attractive tax benefits to owners/operators of approved tourism projects.
There is room for investment in three large-scale hotel development schemes. One is already operational: the five-star Magdalena Grand in Tobago is a 200-room beachfront property with an 18-hole golf course and a spa.
There’s also Rocky Point, Tobago. It’s ripe for a 200-room luxury resort on two adjoining parcels of land in an unexploited part of an island that already commands a strong reputation as a tourist destination for Europeans . Value of investment? It’s estimated at around US$124 million.
On the sister isle, Chaguaramas is teeming with potential as a yachting hub and eco-tourism site. Over 1,000 vessels came in 2012 to take advantage of T&T’s location below the hurricane belt.
With its historical landmarks and rainforest, the area is set to become even more popular once plans for a hotel, marina and golf course come to fruition.
T&T spends roughly US$4 billion annually on imported food, and securing reliable, local food supplies is now a public sector priority.
Fortunately, both Trinidad and Tobago are rich in arable land, and have warm climates, so it’s easy to capture market share in agribusiness.
The Ministry of Food Production, Land and Marine Affairs has produced a good guide to agriculture and agribusiness investment; there are opportunities for investment in cocoa and honey, staples like rice and sweet potato; fruits, vegetable and livestock.
While the government is focused primarily on producing food for its large middle class, investors can target the almost 600 million people living next door.
5. Film & Animation
These creative industries look particularly promising for financiers. The islands have hosted strong animation and film festivals for several years, enough to drum up investment interest.
The Trinidad and Tobago Film Company offers exciting rebate incentives to small to medium-sized filmmakers; Home Again is a recent success story for the sector.
In animation, there is an opportunity for investors to partner with the T&T government on a 50 to 60-seater animation studio. At next week’s Caribbean Investment Forum (CIF) 2013, will hear how one animation project—launched after CIF 2012—is taking shape. And with creative expressions like the explosive pre-Lenten Carnival, T&T culture is rich in powerful story material. Investors stand to see huge ROI given the growing value of this business globally.