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Barbados: Beauty, Beaches and Biotech

Monty Turner
2:03 read

On a cold, dreary December day, I had the warm and wonderful pleasure of boarding a plane for Barbados. Sure, it was a business trip, but Barbados? During the winter?? I’ll take it! Something tells me the timing of this FAM Tour was not planned by mere coincidence by the fine folks at Invest Barbados.

To be honest, I wasn’t sure what to expect from this FAM Tour and went into it second-guessing my decision to participate. After all, when it comes to the type of capital intensive projects GLS specializes in, Barbados hasn’t produced a blip on the radar. But something on the agenda caught my eye … niche manufacturing. Life Sciences is a sector GLS has much experience in when it comes to location benchmarking, site selection and incentive negotiations. When I saw that the agenda included visiting a medical device manufacturing facility – Lenstec, headquartered in St. Petersburg, Fla. – it piqued my curiosity to dig deeper into this little-known Caribbean island nation.

The population of Barbados is roughly 290,000, which translates to about 670 people per square kilometer. For a country so small and somewhat remote, I was surprised to learn Barbados boasts a 90 percent literacy rate. For small countries – let alone island nations – this is extraordinarily strong and is largely due to the fact that primary and secondary schools are free for citizens and tuition for university and technical schools is subsidized 80 percent by the Barbados government.

In addition to an educated workforce, the island’s public transportation system is extremely efficient, allowing most residents to forgo car ownership. This, in turn, lends to an affordable wage structure. On average, direct labor costs are:

Assembly Workers – Trainees:    $115 - $140/week
Assembly Workers – Skilled:    $135 - $180/week
Production Supervisor:        $330 - $525/week
Electronics Technician:        $315 - $475/week

But for all its upsides (hello, year-round sunshine and beautiful beaches!), Barbados isn’t without its challenges. Resource intensive industries like pulp and paper, chemical and metals need not apply due to the fact that the electric infrastructure of Barbados is based on diesel fuel generation. And while Invest Barbados executives are quick to point out that the government is pushing into solar, the country is many years out from making a dent in its reliance on diesel. It’s simply too expensive for resource intensive companies to consider operating a manufacturing facility there.

Nevertheless, an educated workforce coupled with low labor costs gives Barbados a distinct advantage over North America and Western European countries competing for life science investments, particularly for companies like Lenstec that manufacture lightweight, high value materials requiring minimal energy. [It’s also worth noting that Bajans (native residents) have mostly neutral accents, making Barbados an attractive location for call centers, too.]                                        
Another advantage for niche manufacturing businesses is a low tax structure for international business that minimizes the global tax burden for multinational companies. The government of Barbados also provides special incentives to eligible companies, including full exemption from import duties on equipment used in the operation of the business; full and unrestricted repatriation of capital, profits and dividends; freedom from exchange controls; and no capital gains taxes. More incentives are currently in the works for investors in the area of high-end manufacturing niches, pharmaceuticals/biotechnology, business process outsourcing, R&D, alternative and renewable energy, and other industry sectors.

While all FAM Tours provide me with new information or insight about a location, this one hosted by Invest Barbados was definitely my surprise sleeper of 2016. If you have a niche manufacturing company seeking expansion opportunities – particularly into the Americas – let’s see if Barbados might register as more than simply a destination for your next vacation.

Category: Blog