Food processors ‘lack funding’
THE GROWTH of the agro-processing industry in Barbados is being hampered as business operators continue to find it extremely difficult to access available funds.
This observation came from chief executive officer of the Barbados Small Business Association (SBA), Lynette Holder, as she outlined to the BARBADOS BUSINESS AUTHORITY some of the challenges plaguing the small and medium enterprises (SME) sector.
Holder said the food processing industry had some potential for expansion but accessing the funding to grow operations was a headache.
She spoke against the backdrop of the latest Central Bank report, which said: “The share of manufacturing in GDP [gross domestic product] over the past two decades declined from about nine per cent in the 1990s to about five per cent at the end of 2012. During the last five years, some improvement in the level of production was observed, mainly in food processing, electronic components, chemicals and beverages and tobacco.”
The report also said lower output levels were recorded during 2012, with the exception of food processing, which improved by one per cent.
Citing one example of a struggling agro-processor, Holder said she “suffers every quarter” in trying to get working capital to satisfy orders from an overseas distributor who was also “trying to open up more markets for her condiments”.
“She has been able to fill some orders last year, but each time she gets an order, and the orders come in practically on a bi-monthly basis, it is a challenge to get working capital,” lamented Holder.
Noting that the funds were available, the SBA?boss said it was the process of accessing those funds that continued to be the problem.
The outspoken business advocate said it would appear that there was an inability to make the decisions to get things done.
“If we want to really fuel the agro-processing sector, then you have to be more responsive, ensuring that the environment is more enabling so that they can access capital to procure the material to be able to satisfy their orders, even if it is credit arrangements,” she said.
“In the financial sector we have an issue because of a lack of a sophisticated e-commerce facility. We have the issue where many of the businesses have to wait sometimes for 21 days and more for cheques to be cleared when they are transacting business with external vendors,” added Holder. (MM)