Tony Howell
Erwin Keutner, member of the management board
of Methanol Holdings (Trinidad) Ltd, from left, Rampersad
Motilal, managing director of MHTL, Energy Minister Dr Lenny
Saith and Minister in the Ministry of Finance Christine Sahadeo
at the opening of MHTL’s AUM plant in Pt Lisas last
week.
SAO
LUIS, Brazil—Last week Thursday, Energy Minister Lenny
Saith turned the sod to signal the start of construction on
the seven-plant petrochemical complex in Point Lisas that
is being undertaken by the company called Methanol Holdings
(Trinidad) Ltd (MHTL).
The ammonia,
urea and melamine (AUM) complex is extremely important for
a number of reasons:
- The size of the project.
At
an estimated investment of US$1.5 billion, it is one of the
largest projects ever undertaken in T&T and certainly
the largest project to break ground in which T&T capital
is predominant.
-
The ownership of the project. MHTL is owned by CL Financial
and a small group of German companies. CL Financial, a conglomerate
chaired by Lawrence Duprey, owns 56 per cent of MHTL. It is
the same group of companies with the interest in one ammonia
plant and four methanol plants on the Point Lisas Industrial
Estate. CL Financial has its origins in insurance but has,
in the last 20 years, branched out to take control of Republic
Bank and Angostura (two publicly-listed companies) as well
as a significant percentage of T&T’s private sector
real estate development.
-
The value added component.
MHTL is
the first project to get off the ground as a result of the
Government’s policy to promote added value in T&T’s
natural gas sector.
-
Employment.
By virtue
of its adding value to T&T’s natural gas, the AUM
project will also see significantly more employment than the
normal process plant operating in T&T.
-
Reinvestment of profits.
MHTL is
also a clear example of a private sector company, operating
in T&T, which has decided to reinvest its profits in developing
industries which will be able to compete in the global market.
While
all the bullet points are important the last one is the most
important as it is the means by which T&T will continue
to develop its economy.
MHTL,
that is Lawrence Duprey and a group of German bankers and
industrialists, have decided that one of the ways to make
money in this world at this time is to take T&T’s
natural gas and turn it into products that can be competitive
in the world market.
And they
have decided to take their profits from the manufacture of
methanol and ammonia to develop a project which uses both
methanol and ammonia to develop new products that can be competitive
in the world market.
In other
words, instead of holding seminars in which all the speakers
criticise the Government for its lack of action on crime or
its overdevelopment of Port-of-Spain to the detriment of pot-holes
and stand-pipes in the rest of the country, MHTL has gone
about the business of trying to build a world-class business,
in conjunction with foreign capital, which uses one of T&T’s
main competitive advantages, its plentiful natural gas.
One of
the issues that should be focusing the collective minds of
the TTMA and the chambers of commerce, at this time, is how
can other T&T private sector companies go about replicating
the model of MHTL by adding value to T&T’s natural
gas.
Some companies
are beginning to get the message. Ansa McAl, the group which
is a majority owner of the Guardian, is working on putting
together a petrochemical project. Neal & Massy now has
an energy division which has successfully broken into the
oil sector. And Guardian Holdings has taken the lead in making
venture-capital like equity placements in local energy sector
companies.
But is
this enough?
Would
this be enough to sustain the T&T economy through the
next down cycle in world energy prices?
Is our
local private sector doing enough to learn the skills needed
to operate in the world energy sector, just as Lawrence Duprey
and others like Kerston Coombs and Ken Julien learnt those
skills years ago?
Or is
the private sector content to reap the rewards of a booming
local market by investing in fast food franchises and high-priced
condo developments?
At a time
when Chinese exports dominate world manufacturing, nobody
operating outside of China can go into a new export venture
without being very conscious of the eastern giant.
Everybody
knows that manufacturing in T&T in 2006 is difficult.
But has it become more difficult than a decade ago or is it
that it has become easier to make money providing retail services
to the local market than to undertake export manufacturing?
I am sure
that the Government is not doing enough to promote export
manufacturing. I am sure the Government can and should be
doing more to remove the bureaucracy at Customs or ensuring
that the port is more efficient or by controlling the rising
inflation rate.
But
why has the bureaucracies and inefficiencies in the country
daunted others but not the people behind MHTL?
BG
View is the opinion of
the editor of The Trinidad Business Guardian,
the weekly financial
magazine of one of Trinidad most read daily newspaper.
Petroleumworld not necessarily share
these views.
Editor's
Note: This commentary was published by
The Trinidad Business Guardian,
on, May 11, 2006. Petroleumworld reprint this article
in the interest of our readers.
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05 14 06
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