The Tribune

By ANNELIA NIXON

Tribune Business Reporter

anixon@tribunemedia.net

IN the wake of tariffs imposed by US President Donald Trump, construction companies in The Bahamas are hoping an upcoming trip to India will help to obtain affordable materials.

With tariffs looming between the US, Canada, China and Mexico, construction companies are seeking alternative ways of acquiring affordable building materials to prevent passing costs on to their customers. During a recent trade mission with Canada, the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) president, Dr Leo Rolle, said they are eyeing South America, India, China and the United Kingdom, adding they will be headed to India with some construction businesses from April 10-18.

Dr Rolle said: “At present, we are preparing for our inbound mission from London, the Caribbean Council, which will be in early April, and then an outbound mission to India, which is why the meeting today was so important, because it allowed for an opportunity for us to meet with, of course, the foreign minister, some of the other ministers, and then the delegation from India, which begins the bilateral trade and conversations before we take the delegation of 75 business owners in the construction and procurement industry to India on April 10 to the 18.

“So that’s going to be very, very exciting. We actually were able to ink a deal with the Indian government to pay for that because, of course, they want to access the Bahamian market more, especially for windows, doors, tiles, plumbing, all that stuff like that. It’ll help with the possible implementation of the tariffs, such that we can derive goods and services directly from India, which is at a much cheaper rate. And we’ve also been working a number of shipping and logistics companies. We’ve already begun the initial conversation with them to help us in our thrust towards getting these goods and services here, and whether that be through contract shipping or destination shipping, we’re working directly with, to name a few, ShipX, CLX Logistics, Exclusive Warehousing. Those are some of our members who we are working closely in tandem with to figure out how we are going to work together to get the goods from India, once we take this delegation of 75. So we have quite a busy next few weeks.

“Like I said, there are 75 businesses that will be gone for a week. The Indian government has covered the trip in totality. I went to India last year, in June. The chamber is a part of the IOE, which is the International Organization of Employers. And last year, there was an opportunity to go for a skills and capacity building conference. I went to that and of course, got some contacts, lobbied with those contacts, those contacts put me in contact with the government. And of course, I was able to negotiate where they are covering the full cost hotel, travel, transport for our 75 delegates. They’re all in different sectors.There’s construction, tiles, textiles, paint. There is windows, doors, fiber, rebar, you name it, we have it. So that’s what they’re doing.”

Virley McKinney, project manager of Asphalt Maintenance Paving & Testing Co Ltd, a company registered with BCCEC said he tries to patronise local business including CBS, JBR and FYP, but some items he is forced to import and they normally come from the US. While he noted that the tariffs would result in him having to charge customers extra, he also said he tries to strike a balance.

“More than likely, the cost would be shared or defrayed to the customer,” Mr Mckinney said. “It’s just a matter of, like I say, striking some leverage or some balance, because as a business, you do expect to insert some costs and some increase in some of your supply. But to mitigate that, because we’re in the business of asphalt, sometimes we have a few projects that are similar in nature and scope. And so what that allows us to do is, for example, instead of buying a five gallon bucket, we may be able to buy a more bulk supply. And usually, typically when you buy a bulk, you’re able to save that way. I mean just one strategy. And then, like, for example, some materials that we use you have the option of integrating water to stretch it or maximise it. And so you could incorporate these just to be more, I guess, effective and utilized. Lastly, because we hire our company, we high on innovation. So I can tell you one of the things we did to mitigate costs and these tariffs is we started manufacturing a coal mix, asphalt in a bag, for example. And with that, we use local rock that’s that’s mined in Freeport. And so the only raw material we have to import for that is the bitumen, which is like the binder, the cement, as you would in concrete.

Mr McKinney, whose company will accompany BCCEC to India, added that he is currently “comparing and contrasting” prices between the US and other countries. He said the trip to India should provide “some real insight”.

“I’m in a process now of comparing and contrasting prices on certain materials as it relates to importation from the US versus these other countries, because of the currency difference and the price and change,” Mr McKinney said. “And then you got to consider the logistics and shipping. And so I think this trip the Chamber of Commerce have planned for India would give me some real insight, and allow me the opportunity to give me some exposure to see what’s going on, which would solidify this whole thing of getting it from a foreign country versus the US. Now, one thing I would say is, one of the benefits with the US is close proximity, speed. And then, typically, whatever is imported, it’s usually at an acceptable standard. So usually [there] don’t be no issue in terms of complying with our local standards. Sometimes we have an issue, you know, something like from China might, might be equivalent, but it isn’t. It don’t function the same.

KONE USA agents for The Bahamas Basden Elevators have already received word from

KONE that “they will have to do some pricing restructure”. Vice president of Basden Elevators Arnaldo Basden added that “they are not sure how much it will affect us at this time, but they have already advised us that pricing will go up”. He said he is looking into importing from other countries including India, as a business registered with BCCEC.

Construction companies not associated with BCCEC are also looking into importation from other countries, including Screws & Fasteners World. Owner Patricia Cleare said she will have to pass the cost on to the customer.

“A lot of stuff, for instance, like lumber, building supplies, a lot of that come from Canada through the United States and then come down to us,” Ms Cleare said. “So with a 25 percent tariff, that means all these building supplies are going to go up. Case and point, I just purchased five bundles of plywood. And I had to lock that in before this 25 percent tariff started. So I was able to get the plywood at a very good price. But the other lumber that I need, that’s going to go up on us. So that is my take on this tariff, which is a stupid, crazy thing to do.

“A lot of my inventory come from the US. When it comes to tools and stuff like that, some come from different countries. I get some some stuff from Panama. But the challenge that we are having is everything has to go through the US. And if I decide to order anything from China, which might come through the US, that poses a problem, because this tariff is going to affect that. When it comes to the US, it is still going to affect me, even though I order it from China. Once it come through the US, they would slap that 25 percent tariff on whatever I order.

“As a matter of fact, certain things I decide, let me try and get stuff direct from Africa and direct from Panama, because we found out now that there’s a boat that comes direct from Panama to Jamaica, goes to Trinidad and Tobago, Jamaica, and then comes right directly to Nassau, which is a good break for us. So that’s where I’m leaning at now. I have some stuff coming in. I have two sets of stuff coming through that avenue... it’s supposed to stop at Haiti too. But because of all the unrest in Haiti, it can’t. They wouldn’t go there. And then they come directly to The Bahamas. So it cuts out going through Miami, which is the tariff issue. And it would cost me much more if I bought in those stuff to Miami and then shipped to to Nassau.

“Africa is another place that I’m looking at. I have an order coming in from Africa now, and the amount of money that I paid for the items, as well as getting it through to directly here seems to be a very good price. So these are some things that I’m looking at. I’m not certain if we have a direct ship link from Canada to The Bahamas. I think years ago, we had one but I’m not certain now if we do. Hopefully, if that comes through, then we could weigh the balance where it’s going to be more expensive or or less expensive.”