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BRIEF FOR THE RT. HONOURABLE P. J. PATTERSON, PRIME MINISTER OF
JAMAICA FOR THE KINGSTON FREE ZONE'S 21 ST ANNIVERSARY
REDEDICATION & FLAG RAISING CEREMONY AT THE ZONE ON
WEDNESDAY, SEPTEMBER 10, 1997
Overview
Jointly owned by the Government of Jamaica and the Port Authority of Jamaica,
the Kingston Free Zone was established in 1976 with the primary objectives of:
creating employment
stimulating investment by foreign and local business interests
generating foreign exchange and
facilitating the transfer of technology to Jamaicans employed there
Initially, warehousing represented the main economic activity; and then, in 1978,
the first garment manufacturing company opened its doors.
The experience of the Kingston Free Zone in its 21 years of operations gives
credence to the saying "From small acorns do mighty oaks grow."
Currently, there are 21 companies operating on the estate, with parent bodies in
the United States, Canada, Jamaica, the Far East, Israel and Europe.
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Eleven of these operations are engaged in apparel manufacturing, while the other
investors are involved in the production of confections, animal feed blending,
ethanol processing, warehousing and distribution of pharmaceuticals, chassis and
container repairs and the assembly of electrical and electronic equipment.
Some 4,000 workers are presently employed on the estate in a variety of skilled,
semi-skilled and professional occupations. More than 90% of this number are
women and they work in the apparel companies which presently account for
approximately 80% of the Zone's output and some 30% of total exports by the
sector, nationally. This makes the Kingston Free Zone the single largest garment
manufacturing entity in the island.
Economic Contribution
Garment Sector
Between 1991 and 1995, export sales by garment manufacturers in the Zone have
grown from US$94.7 Million to US$128.6 Million. Over the years, the United States
has been the major market for its apparel products, purchasing some 74% of total
export shipments in 1995. Europe, with just over 20% of total exports, is the
second largest market, followed by Canada, which with 2% is becoming an
increasingly important destination for the Zone's apparel products.
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While all the earnings from the Zone's export sales do not accrue to the foreign
currency budget of the national economy, but are repatriated by the individual
overseas-based companies, garment manufacturers on the estate have provided
revenue to the domestic economy. This contribution results from the purchase of
local goods and services.
Since 1991, a total of US$83.2 Million in retained earnings has been generated by
the garment sector, representing an annual growth rate of approximately 20%.
All Sectors
Overall, client companies at the Kingston Free Zone have invested US$78.42
Million between 1982 and 1996, recording total export sales of US$1.4 Billion over
the period. At the same time, foreign exchange earnings amounting to US$242.2
Million have been contributed.
Factory operations now occupy a total 790,470 sq. ft., with a further 28,940 sq.ft.
being allocated for worker canteens.
Employment
The Zone has been playing a significant role in the creation of employment
opportunities for Jamaican workers, with companies spending a total J$1.1 Billion
in wages from 1982 to 1996.
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However, negative perceptions about working conditions and wages on the Zone
have led to a continuing shortage of workers at a time when many companies
operating on the estate are expanding their production capacity.
Training
Over the years, many workers on the factory floor have had the opportunity to
enhance their basic skills through in-house training and specialized courses
conducted by agencies such as JAMPRO and the HEART Trust/NT A. Others have
benefitted from visits to plants abroad, where they have been exposed to the latest
production techniques.
With the increasing use of computerised technology, many Jamaican workers have
been upgrading their skills on the job, and in several instances, their fine
workmanship has won awards for their companies internationally.
In fact, many well-known designer lines including, Polo Ralph Lauren, J.C. Penny,
Tommy Hilfiger, Liz Clairborne, Maidenform and Victoria's Secrets, are produced
by Jamaican workers in the Kingston Free Zone.
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The Next Phase
Informatics Park
Most of the companies in the Kingston Free Zone operate at the low end of the
industrial sector, where margins are low and production is labour intensive.
Diversification of productive activities within the Zone and the establishment of light
industry are being encouraged as a strategy to reduce dependence on the garment
sector and to increase earnings.
Entry into the fast growing information technology industry with the proposed
establishment of an Informatics Park at Portmore Centre in St. Catherine is in
keeping with this strategy. The success of Jamaica Digiport International (JOI) in
the Montego Bay Free Zone and limitations on its future expansion, posed by the
shortage of sufficient trained labour, the shortage of housing in the second city and
transportation difficulties facing its mainly peri-urban workforce, are other factors.
The main objectives guiding establishment of the Informatics Zone are:
to maximise employment
to boost foreign exchange earnings and
to promote the transfer of technology
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Construction of the first of four 50,000 sq.ft. buildings on the 13.5 acre complex is
to begin shortly. The new Informatics Park will be administered by the Kingston
Free Zone and will offer all the incentives provided under the Jamaica Export Free
Zone Act. It will target investors in the upper levels of the service sector.
The communications infrastructure in this new Free Zone will feature a state-of-theart
satellite earth station, with support technology to facilitate satellite links to digital
switching to carrier networks in North America. It will facilitate packaging of
integrated voice data and video communications, computer-aided designs (CAD),
and multi-media/multi-lingual software programmes.
The fully integrated Local Area (LAN) and Wide Area Networks (WAN) will also
give investors the option of exploring network linkages with local partners,
especially in the health, education and tourism sectors.
The new Informatics Park is expected to create jobs for some 3,000 skilled
workers over the next five years, and the growing communities of Portmore and
surrounding areas in St. Catherine represent possible sources of employment. A
further 1,500 jobs could also be created outside of the Zone, through the
involvement of local firms in a mix of IT processing and professional services.
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Commercial Zone
Plans are also being made by the Kingston Free Zone to establish a Commercial
Zone, which will accommodate duty-free shopping and trading of the widest range
of consumer items to satisfy the needs of both local and regional in-bond
shoppers.
It is expected that this Zone will become a viable alternative to those in Curacao
and Panama.
The new Zone, which will be located on a 25-acre property near to the Norman
Manley International Airport, will also generate additional business for the airport
and the Port of Kingston. UWI LIBRARIES
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August 25, 1997
Miss Debra Hamilton
Communications
Consultants
Limited
E~~H~M#
P.O. Box 8198, CSO, Kingston.
2 Balmoral Avenue, Kingston 10, Jamaica, W.I.
Tel: 926-5684, 929-9125, 960-1123, 929-2177
Fax: (809) 929-9121
Special Assistant to the Prime Minister
Office of the Prime Minister
1 Devon Road
Kingston 10
Dear Miss Hamilton:
We enclose, as requested, the brief for preparation of the Prime Minister's speech, as
well as the function logistics and other information regarding the Kingston Free Zone's
21st Anniversaty Rededication and Flag Raising Ceremony on Wednesday September
IO.
We will be happy to provide any further information which you may require.
:;:L CL.
Beverley N ell
Director
Carmen E. Tipling, Chairman; Eunice Bent, Managing Director; Beverley E. Newell, Director;
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Percival J. Patterson Collection
