Prime Minister Dr Andrew Holness has indicated that significant changes will be coming to cut energy costs in a bid to attract more businesses to manufacture and invest in Jamaica.

The prime minister made the announcement on Tuesday at Jamaica Packaging Industries Limited’s (JPI’s) 70th anniversary and new factory launch at 693 Spanish Town Road, St Andrew, against the backdrop of JPI spending US$12.75 million ($2 billion) to consolidate its operations at a single location and invest in state-of-the-art equipment to supply local companies.

“We’re going to have to take some profound measures to ensure that your energy costs are competitive, if not less than others in our region. We’re going to make some bold moves as it relates to energy. So, stay tuned for that. The next time that I speak on the topic, you will hear the bold moves that the Government will make for energy. Choose JPI, Choose Jamaica,” Holness said.

According to PVknowhow.com, Jamaica’s average industrial energy cost is US$0.248 per kWh compared to Trinidad & Tobago, which boasts an average industrial energy cost of US$0.053 per kWh. That lower cost of energy has been a major advantage for the concentration of manufacturing in that Southern Caribbean country in the past, with different Jamaican businesses moving part of their operation there.

JPI ceased local manufacturing in 2000 and imported corrugated packaging from a sister manufacturing company in Trinidad & Tobago. Additionally, Carreras Limited became a market distributor in Jamaica with fellow subsidiary West Indian Tobacco Company Limited (WITCO) exporting cigarettes to Jamaica.

Some manufacturers have been able to contain their energy cost by moving to liquefied natural gas (LNG). Wisynco Group Limited, Rainforest Caribbean and The University of the West Indies, Mona are just some of the entities that have moved to gas-fired power plants in recent years.

Jamaica has been on a drive to increase its share of renewable energy with SunTerra Energy Jamaica Limited and Wigton Energy Limited (formerly Wigton Windfarm Limited) being awarded the 100 MW (megawatt) tender last November. Both companies will be setting up solar farms in Trelawny and Clarendon, respectively. However, renewables only made up 8.7 per cent of Jamaica’s energy mix up to 2023.

Holness’s comments on Tuesday came as the Government is set to negotiate with Jamaica Public Service Company Limited (JPS) about its electricity licence, which is set to expire in July 2027. The Government holds a 19.9 per cent equity stake in JPS.

Apart from seeking to cut the energy costs, the prime minister noted that significant efforts would be placed on improving security in Jamaica as the cost of crime continues to be a growing line item for many firms. He also reiterated the Government’s push to equip more Jamaicans with skills through HEART (Human Employment and Resource Training Trust) and providing a more attractive business environment through special economic zones (SEZs) and a better regulatory environment.

“What you would have seen happen with the last few years is a resuscitation of this corridor. This is not the only building that has been taken over and renovated along this corridor and manufacturers have come in. I can count at least eight. We are having heavy industrial and light industrial manufacturing re-emerging in Jamaica and the Government is supporting this,” Holness said.

Apart from JPI’s multi-billion-dollar investment, Berger Paints Jamaica Limited also invested $130 million to upgrade its trowel-on facility at 256 Spanish Town Road. Also, Eppley Caribbean Property Fund Limited SCC-Value Fund (CPFV), which owns 693STR Limited, spent a total of BDS$3.07 million ($242 million) over the last two years upgrading the property which it purchased in 2020. The property was home to the former Coca-Cola bottling plant which has a 75,000 square foot building on more than three acres of land. The property is now valued at BDS$16.10 million ($1.27 billion).

“Everybody who has seen it [factory] is excited. A lot of them have increased their business with us. We’ve actually had some new customers who have heard about our investment and have come to us. We offer an ease of doing business here,” said Gary Cole, JPI’s country manager, after the new factory launch.

“Some customers have to be importing container loads [of packaging], storage becomes a problem. We are here to solve all of that and can deliver just in time,” he said.

JPI re-entered the local manufacturing space in 2017 when it acquired the assets of competitor Corrpak Jamaica Limited. This latest investment in Jamaica has boosted the company’s production capacity by 250 per cent with additional investments to move this figure to 300 per cent. That translates to a capacity to produce 15 million cartons per year with one of its high speed latest folder gluer machines able to produce 18,000 to 20,000 cartons per hour.

The company’s addition of a corrugator to create corrugated cardboard also enables it to produce corrugated sheets for two customers at the same time while doing other finishing activities as well. The expansion allowed for the company to add 20 new jobs to its workforce of 65. That workforce is set to expand shortly as the company is currently awaiting one machine to be collected from the wharf and another to be ordered shortly.

“The outlook is very bright. We are very excited as this development is a game changer for the country. The business is here. We’re relying on the customers to buy Jamaican, and if they come to us, we can assure that the future is very bright,” Cole said as the company gears up to export to other Caribbean territories.

Jamaica Packaging Industries (JPI) Country Manager Gary Cole (left) and intern John Rewett (centre) show Prime Minister Dr Andrew Holnes a cardboard sheet used for packaging products on Tuesday during the launch of the company’s new factory and its 70th anniversary celebrations. (Photo: Naphtali Junior)