Guyana’s manufacturing sector is set to experience significant benefits from the Gas-to-Energy (GTE) project which promises to produce electricity at a lower cost. Ramsay Ali, Head of the Guyana Manufacturing and Services Association (GMSA), expressed this sentiment during a recent episode of the Energy Perspectives Podcast.
The Government of Guyana’s ambitious GTE project will be located at Wales, West Bank Demerara. The project entails bringing approximately 50 million cubic feet of gas from ExxonMobil’s Stabroek Block to two onshore facilities: the Liquefied Natural Gas (LNG) facility and a 300-megawatt power plant. President Irfaan Ali led-administration has repeatedly touted the power plant as one that will slash electricity bills for citizens by 50%.
GMSA’s Head who shares similar views explained that energy costs are often on par with labour expenses for most local companies. He noted that when the GTE project becomes operational, there will be a significant reduction in energy costs for manufacturers in Guyana, making them more competitive.
“Also, if you were to look at say the top 10 manufacturing companies in Guyana…none of us are on the grid; we are all generating from our own suppliers, possibly using generators,” GMSA Head stated. He added, “That itself tells you a story; one, it’s the reliability of power and of course the cost of energy.”
Ali explained that the government’s investment in the GTE project would be a major game changer, not only by reducing the cost of electricity but also by having several positive implications.
“So, let’s start at the top, so most of us in this in this country, are manufacturers here. One of the reasons why we are not so competitive in the export market is the cost of production and one of the reasons why is the cost of energy that has been the story of our lives,” Ali said.
He explained that manufacturers struggle because profit margins are small.
The GMSA Head noted that Trinidad and Tobago companies have always had an edge over Guyanese manufacturers due to their lower energy costs, which are only a third of Guyana’s.
“We do it because we want to expand our business but really and truly, [we] don’t make a significant profit and it’s simply because of the cost of production,” Ali stated. He underscored that a reduction in energy costs and access to high-quality energy would significantly boost Guyanese companies’ export capabilities.
Moreover, smaller manufacturers would also see a reduction in costs. Over the years, the agro-processing business has increased, with most businesses using modern equipment. “They had to lift their game, because there’s no way you could put ketchup in a bottle put a paper label on it. Nobody don’t buy that anymore,” he noted.
Under the GMSA umbrella, there are about 120 small-scale agro-processors. Ali mentioned that most of them state that one of their biggest costs is energy. “So I’m even more excited for the with this project than for larger companies…if they can see a 30% reduction in their cost, that’s going to be amazing,” the GMSA Head stated.
