GTC, a UK-based shipping container cleaning company, is seeking to expand into the rum container cleaning market in the Caribbean. The Caribbean rum market has grown significantly in recent years and represents an opportunity for GTC. GTC plans to enter the market through a joint venture with a local partner in Jamaica, taking advantage of incentives offered in Jamaica's port special economic zones. The joint venture will provide specialized container cleaning services to rum exporters in the Caribbean from its Jamaica location. GTC believes this is a low-risk opportunity that aligns with its strategy and will provide benefits to both the company and Caribbean countries.

1. Investment Strategy for-
Entry into rum container cleaning market in
Caribbean

2. Investment Opportunity
 GTC is a multinational corporation based in the United
Kingdom, and specializes in providing shipping containers
for liquid foods and tank cleaning services for distilled
products. With over 30 years of experience in the industry,
the company has developed experience and expertise in
this industry.
 GTC is seeking to expand its global market share through
entry into new markets. According to the Caribbean trade
and investment promotion agency, Carib-export , the
potential in the global market includes growth in rum
exports
http://www.carib-export.com/rum/

3. Market Opportunity
 Rum, as an alcoholic beverage, is part of the
growing spirits industry with rum sales exceeding
US$2.6 billion in 2015.
 Rum as a product category is diverse, with the final
product dependent on the production method and
inputs utilized.
 Global exports of rum increased 37.5% between
2006 and 2015, peaking in 2013 at over US$1.63 billion
in exports.

4. Market Research
 The business development team has been conducting
market research and has identified the Caribbean as a
market with potential.
 As part of a new strategy, GTC aims to target
developing economies which have significant
potential.
 GTC notes that, according to the World Bank-
developing countries account for a growing share
of global foreign direct investment (FDI) inflows
and outflows, and received 40% in 2016.
 In this new project, GTC will is developing a strategy
to enter this new market to provide rum container
cleaning services to ports across the Caribbean.

5. Mode of Entry – JOINT VENTURE
 The GTC strategic management team views a joint
venture as the preferred mode of entry as it aligns with
the company strategy of investing in low risk high
return projects. The joint venture would include:
A partnership with a local exporter of rums and juices.
Access to land space located in Jamaica’s port Special
Economic Zone (SEZ), which include access to utilities
Access to SEZ incentives to investors such as short
term tax break and removal of duties on equipment
imported.

6.  Potential Benefits to GTC include expansion of revenue
and market share:
 Lower start-up cost associated with joint venture and
 Access to SEZ incentives
 Access to a growing market
 Expanding company revenues and shareholder return
 Increasing global market share and market value of the
company
 Absence of high risk
 Overall alignment with the company’s strategy of investing
in low-risk high return projects.
 Alignment with Jamaica’s aim for sustainable transport
infrastructure
Benefits of the project
* a win-win situation for the both the company and the
country*

7. Potential benefits to host countries in the Caribbean
include contribution to economic growth, job
creation and greater ability to meet Sustainable
Development Goals:
 Access to speacialised service
 Access to expertise and technological solutions
 Higher quality, safety and environmental standards, traceability,
and sustainability and therefore greater chance of meeting
international quality standards
 Faster turn-around in containers available for shipping of rum and
other distilled products and lower operational costs
 Increase competitiveness of Caribbean economies and greater
access to global value chains (GVCs)
 Potential to increase exports and expand revenue from exports
 Creation of jobs in local market and the development of local talent
through training and exposure

8. Target Market and choice of location
Caribbean
 The Caribbean has traditionally been a major producer of
rum a by –product of sugar caneproduction. Due to small
domestic market Caribbean producers have exported rum
across the world.
 According to Carib-export, “the major suppliers of global
rum are highly concentrated in the Caribbean and
Latin America, while consumption is concentrated in
North America and Europe, led by Germany, Spain,
and the United States.”
 There is therefore a solid demand by Caribbean rum
exporters for the shipping of rum containers to global
markets.

9. Demand for Specialised service
 Rum and other liquid foods exports must be shipped
in special containers.
 These containers require regular cleaning. However,
the Caribbean exporters lack access to a local cleaning
services, and has had to rely on costly cleaning services
based outside of the region.

10. Choice of location
 Several rum exporting countries in the Caribbean
present possibilities for setting up the investment :
The Dominican Republic, Puerto Rico, Cuba, and
Jamaica in the central Caribbean area, Barbados
(located in Atlantic Caribbean) and Guyana ( a
member of the Caribbean Community) but
(located in South America).

11. Incentives characteristic of the Caribbean
are in line with an investor survey
conducted by the World Bank.
Investors viewed political stability and the legal and
regulatory environment as the most critical factors when
considering the location of new investment venture.
(World Bank)
 Political stability
 Fair macro-economic conditions
 Rule of law and protection of investor
 Openness to trade and investment

12. Kingston’s Connection with global
markets

13. Economic Commission for Latin America and the Caribbean
(ECLAC) and the American Association of Port Authorities ranks
Jamaica’s container ports as one of the largest in the Americas

14. Jamaica shows potential as the most attractive
location based on a number of specific factors:
 Improving macro-economic conditions- the International
Monetary Fund (IMF) cites higher business confidence, economic
growth and a reduction in distortionary financial taxes. Further,
GTC notes that, the IMF advises that, “the private sector, for its part,
should capitalize on these fiscal measures to increase investment,
and create new opportunities for advancing financial inclusion.”
 Geo-strategic location in major shipping lanes connecting North
and South America, Europe and Asia.
 The Port of Kingston is a global trans-shipment hub; large
harbor and advanced port facilities
 Port of Kingston served by major shipping lines providing
access to major markets of North America and Europe
 Major trans-shipment hub in the Caribbean. Jamaica’s location is
particularly attractive as possible regional base from which to
connect with and provide service to the rest of the region.
 Proximity to major rum exporting territories is an advantage

15. Jamaica’s potential (contd)
 Shared culture: a.)Similar (British) legal system and b.)
Shared language compared to (Puerto Rico, the
Dominican Republic and Cuba which are Spanish-
speaking territories)
 Improvement in business environment; Jamaica
ranks the highest (75) in the Caribbean in the 2019 World
Bank’s Ease of Doing Business Report
 Attention to sustainable port infrastructure
 https://www.imf.org/en/News/Articles/2019/04/22/pr19123-
jamaica-imf-executive-board-concludes-fifth-review-under-
the-stand-by-arrangement
 https://www.worldbank.org/content/dam/doingBusiness/me
dia/Annual-Reports/English/DB2019-report_web-version.pdf

16. Several challenges relating to the business
climate, environmental conditions
Challenges:
 Possible lengthy and bureaucratic processes in the
establishment of the project
 Lack of knowledge of local business processes
 Lack of familiarity with potential business partners
Solution:
 Consideration given to establishing a joint-venture
 Leveraging incentives promoted to foreign investors
such as: (a) guidance to foreign investors on specific
investment opportunities, details of potential private and
public sector partners and stakeholders. This can reduce
information asymmetry;

17. Challenges & Solutions
Challenges:
 Vulnerability to natural disasters- Caribbean located in a
hurricane zone
 Insufficient skilled labour to manage facilities
 Regulatory risk- possibility of sudden changes in regulation
Solutions:
 Use of Marine insurance and other insurance services
 Deployment of staff from headquarters, in addition
to the provision of on-going training to staff in
Jamaica
 Collaboration with MIGA to acquire an appropriate
risk mitigation product

18. Consideration for Environmental, Social and
Governance (ESG) Factors
 Rationale:
 The company acknowledges the importance of proper
procedures in the collection and disposal of waste material, and
the property treatment of potentially harmful substances.
 From a long-term perspective, the company aims to get an
understanding of how sustainability factors may impact future
returns as well as overall reputation. In this regards, each of our
investments usually involve continuous assessment. In this
regard, due diligence will be undertaken for the investment
project under consideration.
 Over the years our company has seen how our sustainability
reputation has benefited the company in terms of our clients
having knowledge of procedural transparency, and the ability of
the company to attract high quality workers.
 Strategy: Members of our investment team will perform an ESF
assessment based on adue diligence procedures specific to this
industry.

19. Sources:
 Economic Commission for Latin America and the
Caribbean (ECLAC)
 World Bank
 International Monetary Fund (IMF)
 Caribbean Export
 Jamaica Promotions Coporation (JAMPRO)
THANK YOU !