US$4M market in northern Brazil to be unlocked

THE edge of the border between Guyana and Brazil, Region Nine, has served as conduit for trade and commerce between the two countries, but, for the business people on Guyana’s side, the benefits have been residual because adequate infrastructure such as an industrial park, which will soon be operationalised, was absent for many years.
Brazil has been hailed as an “economic powerhouse” for years, with commercial and other economic activities thriving in all corners of the country. And, for business people in Region Nine, this country is basically a goldmine of opportunities.

Immediately in the northern part of Brazil, closer to Guyana, is a market, valuing over US$4 million, which Guyanese have only been able to ‘pinch’ and ‘admire’ because of infrastructural deficiencies. But, the Industrial Park at Bon Success, Lethem, presents investors with the opportunity to access this and other major markets through value-added initiatives.

An industrial park is an area zoned and planned for the purpose of industrial development. It can be thought of as a more “heavyweight” version of a business park or office park, which has offices and light industry, rather than heavy industry.

The 80-acre plot of land was identified in 2014 with development slated to be completed in three phases. These include roads and drainage structures and culverts, the construction of 3,020 meters of roads, 6,040 meters of drains and culverts, water distribution network and retention ponds. The Government of Guyana has so far expended over $1 billion to get this initiative off the ground.

And, according to President of the Rupununi Chamber of Commerce and Industry (RCCI), Daniel Gajie, most of the infrastructural work is done, with just a few “finishing touches” needed.

With the area almost completed, the Government, through the Ministry of Tourism, Industry and Commerce has invited applications from interested persons both local and overseas desirous of acquiring industrial lots at Bon Success.

According to an advertisement in the newspapers, the industrial plots are available for lease for the purpose of manufacturing and services-related activities in the following zones: processing industries, light, medium and heavy industries, industrial business, small industries and information and communication zones. A modern business incubator centre to provide business support services is also on the estate.
In order to access lands, investors must have the capacity to commence construction immediately after receiving official permission to occupy the allocated land area.

EAGER

Gajie told the Guyana Chronicle that business people in Region Nine are eager to access lands and commence operations on a larger scale because, as it is now, many persons operate from their yards or houses.

“We have quite a number of local businesses operating in their yards… and they are eager to actually get a plot of land and move over to a large enterprise or modernise and expand what they are doing,” Gajie said during a telephone interview with the Guyana Chronicle on Monday.
While the individual benefits are expected to be large, the broader result would be the transformation of Region Nine into an economic power house.

When asked about this possibility, Gajie said: “Definitely, because we are already sitting on the footstep of an economic power house… we would be able to access a market in excess of US$4 million in the north initially… and this would not only benefit Lethem, but the entire Region Nine.”

Guyana would be able to increase its market share in Brazil because the produce and products coming out of Region Nine would be refined and standardised.
The region has key items such as cassava, peanuts and lots of fruits like mangoes which are usually wasted because the supply outweighs the demand.
“So, if the park comes on the stream, it will allow us to transform the raw potential of the region into value-added products… it will allow us to have products of acceptable standards not only for national consumption, but also for international use”, Gajie said.

With increased consumption, exports and a growing demand, economic activities like farming would naturally increase. Not only will there be more producers, but there would be wider job creation and employment opportunities.

COST OF ELECTRICITY
But for this to be a complete success, Gajie believes that the land and other infrastructure must be supplemented by a steep reduction in the cost of electricity.
“If we can get the cost of electricity significantly reduced, that would be great because we are paying the highest in the country which is $80 per kilowatt,” Gajie said.
It was reported recently that the Government, after reviewing the nation’s energy mix, has crafted a strategy which would move Guyana towards energy efficiency.
“We have had a serious review of almost all of the small systems that we have had. In the last couple of weeks, we have approved contracts to do hydropower at Kumu [Lethem]… we had to look back at what was planned, so we would get 1.5 megawatts from that and we have to rehabilitate Moco Moco which would be another .7 megawatt. So that is 2.2 megawatts and just last week we approved a one megawatt solar farm…,” Vice-President, Bharrat Jagdeo said in a previous report.
The aggregate supply of 2.2 megawatts plus the one megawatt produced by the solar farm would give Lethem three times its current capacity. The town’s peak demand is about 1.1 megawatt of power.

“We would have almost triple the capacity and this is all coming from renewable energy, which would allow a massive growth in industrial estates and industrial plants for that area, and also residential purposes,” Vice-President Jagdeo reasoned.

Sitting at the southern end of Guyana, Lethem borders Brazil, which is a known economic powerhouse in South America. The availability of reliable and cheap electricity would, therefore, inevitably draw consumers and developers to Lethem.

“If the entire Lethem is running on renewable energy, money is saved; there would be a budgetary balance of payments impact, welfare impact and a business impact,” Jagdeo reasoned.

Given the immense benefits which could stem from reliable and cheap electricity, the Vice-President said the provision of such remains a top priority for the Government.
Gajie said the business community in Region Nine welcomes those commitments and is looking forward to a speedy execution and implementation.
Another key component of complete development would be better roads and supporting infrastructure.

LONG HOURS
It was reported recently that the journey from Lethem to Georgetown takes as many as 13 hours depending on the state of the road. It recently became impassable. But, there are plans to pave this road, and, once done, the projection is that the trip will take no more than five hours.

This piece of infrastructure will not just improve transportation, but it will also augment trade and tourism and increase land value, among other things.
The construction of this road was discussed when high-level officials of the Government, including President, Dr. Irfaan Ali, met with a visiting team from Brazil, which included the country’s Minister of External Relations, Ernesto Araújo, and senior officials of the Ministry of External Relations and the Federal Police of Brazil.
Both countries also agreed to the implementation of an “International Road Transport Agreement”.

Additionally, the two sides reviewed the existing programme of cooperation between Guyana and Brazil and agreed to the implementation of a number of measures aimed at expanding and strengthening collaboration at the bilateral and regional levels, within the context of existing cooperation mechanisms.
Following positive discussions, both parties also agreed on modalities for advancing the cooperation agenda in trade and investment, health, agriculture, energy, tourism and security.