Trade policy review

(2)Manufacturing

1.Grenada's manufacturing sector is small, and concentrated around the production of generally light manufactures. These include beverages, paints and varnishes, garments, pasta, tobacco, animal feed, and toilet paper. The sector accounted for an estimated 6% of GDP in 2005.

2.Manufacturing in Grenada has been on the decline since 2001. The authorities estimate average contraction of 4.5% between 2001 and 2004¹¹: the sector declined by 3.8% in 2002 and by 2.8% in 2003¹², when output in animal feed, rum, electronics components and grain and bakery products declined. Value added fell by 14.6% in 2004, the fourth consecutive year of decline.¹³ The sector rebounded somewhat in 2005 by 18.8%, chiefly driven by increases in demand for beverages¹⁴, but recovery was short lived, as output declined around 1% in 2006, due to the cessation of tobacco production and increased competition from regional products. Despite the overall decline, beverages' output continued to increase in 2006.¹⁵

3.Grenada's average tariff on manufactured goods (ISIC classification) is 10.5% with a final bound average of 55.8%. Tariff rates range between 0 and 40%, with the highest tariffs reserved for textiles and clothing, and leather and footwear (Chapter III(iv)). Although the manufacturing sector caters largely for the domestic market, some products are exported (Table IV.2). Manufactures accounted for around 47.6% of total exports between 2000 and 2004.

Table IV.2

Manufacturing exports, 2001-06

(EC$’000)

Product	2001	2002	2003	2004	2005	2006
Flour	12,922.0	10,953.5	8,836.2	7,399.5	10,140.4	10,949.7
Wheat bran	182.5	231.7	135.3	87.3	198.8	107.5
Clothing	1,441.1	1,946.2	1,397.4	1,226.0	1,762.9	1,965.7
Paints and varnishes	974.9	970.7	1,693.2	1,404.0	1,524.5	2,004.1
Paper products	4,725.3	5,258.3	6,158.2	5,694.4	6,864.0	5,667.7
Animal feed	2,572.4	3,153.9	3,662.6	1,906.7	3,387.0	4,405.5
Roofing sheets	1,347.5	1,113.7	1,818.1	1,480.9	510.2	2,726.7
Nutmeg products	2,116.8	7,063.8	6,701.3	2,008.7	565.4	117.0
Electronic components	63,025.1	5,053.4	406.5	151.9	60.0	0.0
Other	4,486.7	3,488.3	3,114.4	1,048.4	1,260.3	1,118.7
Total	93,794.3	39,233.5	33,923.2	22,501.6	26,273.5	29,062.6

Source: Central Statistical Office.

4.Over 2001-06 there was a modest increase in private sector investment in manufacturing, much of this was small-scale investment targeting the domestic market; this investment includes light manufacturing and agri-processing projects. The authorities note that, since 2004, there has been a slight increase in the number of foreign manufacturing companies interested in investing in the manufacturing sector; some of these companies have already begun operations in Grenada, while other projects are pending. Production is geared towards the domestic, regional, and international markets (Table IV.3).

Table IV.3

Major manufacturing projects, 2004-07

Company	Description of activities	Market	Status
Secure Roofing Systems	Roof manufacturing	Local	Operating
Shelter Solutions Limited	Roof manufacturing	Local	Operating
RAW Enterprise	Roof manufacturing	Local	Operating
Techtrade Incorporated	Manufacturing of concrete decorative paving tiles	Foreign	Operating
Lin Jun Ltd.	Manufacture of pasta products	Foreign	Operating
H. I. (Herrera Interiors) Ltd.	Manufacturer of Interior Furnishings	Foreign	Operating
Kool Temp (G'da) Ltd.	Manufacturer (assembling) of refrigerators	Foreign	Operating
Marine Management Inc.	Boat Manufacturing Company	Foreign	In implementation
Cato Industries	Manufacture of "shuv-it paddles" similar to an oar	Foreign	Pending implementation
New York's Finest Bagels Inc.	Bagel manufacture	Foreign	Pending implementation
Loong Yun Manufacturing & Services Co. Ltd.	Manufacture of rolling gates, hurricane shutters, and furniture	Foreign	Pending implementation
Grenada Chemical Company Ltd.	Manufacture of cleaning agents	Foreign	Pending implementation
Best Building Manufacturer & Trading Co. Ltd.	Manufacture of windows, doors, and gates	Foreign	Pending implementation

Source : The Grenada Industrial Development Corporation.