SECONDARY INDUSTRIES
Definition – Secondary Industries
 Write your own definition of secondary industries.
Other Terms
 Enclave industries – industries that use local
labour and other inputs to produce a product
that will be sold to foreign export markets e.g.
garment industry.
 Import substitution industries – industries that
import raw materials to produce a product
locally to sell to the local markets e.g. flour
mills. This product will be a substitute for
products that can be imported.
Other Terms (cont’d)
 Linkage industries – industries which are
associated or connected to other industries
in such a way that the existence of one is
dependent on the other, or it enhances the
other's production process.
 The items produced may be similar or
connected to each other. These industries
are also referred to as ‘spin-off’ industries.
Other Terms (cont’d)
 Labour intensive/oriented – labour
determines the location of the industry
 Market-oriented – market is the main
determinant in the location of the industry
 Niche markets - A niche market is the
subset of the market on which a specific
product is focusing.
Importance of Secondary (Manufacturing) Industries
 List three reasons for the importance of secondary
industries
 Brings in revenue and foreign exchange when products
are exported
 Creates employment
 Provides a market for local primary products such as
sugarcane and cocoa
 Reduces the need for imports
Location of Secondary Industries
 Factors affecting location of secondary
industries
 Availability of raw materials
 Availability of power supplies
 Availability of a skilled labour force
 Presence of markets – market-oriented
 Industrial inertia
 Government support
Government Support
From the 1950s, governments encouraged
manufacturing by:
 building industrial estates with ready-to-use
factories
 training technicians and other staff
 charging duty on (and sometimes banning)
competing imports
 giving incentives such as 10-year tax holidays.
Increased Competition
 Most Caribbean exports had duty-free access to Europe, Canada
and the USA under special trade agreements, but the World
Trade Organisation promotes free trade and bans and restrictions
on imports have been lifted.
 Caricom has reduced its common external tariff on imported goods.
 Europe and North America have reduced duties for many other
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countries. The Caribbean’s special status is now less valuable.
Low-cost imports are imported and advertised widely.
Caribbean labour costs are higher than China or Bangladesh.
Energy costs are high, except in Trinidad and Tobago.
Shipping, air transport and communications are more expensive.
Most Caribbean manufacturers are small-scale and cannot buy
large-scale equipment for more efficient production.
It is expensive for Caribbean companies to advertise overseas, pay
shelving fees to supermarkets, or obtain the best prices.
Types of Secondary Industries
 Light manufacturing
 Garment
 Food processing
 Heavy manufacturing
 Oil refining
 Aluminium processing
 Handicraft industries – cottage industries
 Basket making
 Pottery
FOOD PROCESSING - CARIBBEAN
 One of the oldest industries in the Caribbean
established during the colonial period.
 It involves the transformation of products from the
primary industry into food for consumption using
methods such as canning, fermentation,
dehydration, freezing and irradiation.
 Examples:
 sugarcane – sugar, molasses, bagasse, rum
 Banana – chips, muffins
 Cocoa – sticks, chocolate
 Tomatoes – canned tomatoes, puree, ketchup
 Nutmeg -
Characteristics
 Products are highly dependent on local and
regional markets
 Some niche markets are being exploited
internationally
 Companies can be classified under
 small and micro enterprises that depend on local raw
materials
 or medium and large enterprises that produce beverages
such as beer, rum and soft drinks utilising local raw
materials as well as imported raw materials and semiprocessed materials
Benefits
 Export earnings for the country
It has become a more important source of foreign
exchange in recent years with the implementation of
trade liberalization
 Reduce wastage of agricultural produce
 Increase the income of the rural population
 Food security for the country
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Problems
FOOD PROCESSING IN TRINIDAD AND TOBAGO
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One of the largest manufacturing sectors
Contributes over 50% of total manufactured output
Employs 1% of the population
Accounts for about 3% of GDP (2006 estimate)
Consists of more than 400 companies, ranging from
small family-run businesses to multinational
enterprises
 Multinational companies like Nestle have their HQs in
other countries but the factories are located in
Trinidad and Tobago where labour is relatively cheap
 Many of the factories are in the large cities and towns
 Products cater mainly to the local market, with a small
percentage for the international market
Trinidad and Tobago Industries:
Food and Beverage
 The food and beverage industry is currently the largest in the
non-energy manufacturing sector in Trinidad and Tobago.
This sector employs more than 10,000 people and contributes
significantly to reducing this country's food import bill.
 The food and beverage industry is a vital ingredient of an
already established value chain, since it builds links with
printing and packaging, research and development, and
training.
 The F&B sector continues to grow in the country, with real
GDP growth averaging 8.1% between 2002 and 2005, exports
of over TT$900 million, and employing more than 10,000
persons. This industry manufactures rum flavored chocolate
cakes, Caribbean fruitcakes, sauces and spices, soft drinks
and exotic fruit juices, specialty rums and bottled water.
 The advantages enjoyed by the F&B industry in T&T
are:
 Proven successful track record of both established
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multinational and local companies, including Nestle,
Unilever, Coca-Cola and Carib Breweries.
Geographical advantage with close proximity to the
North American and South American markets
Low production and export costs
Strategic shipping and trade advantage
Highly integrated turnkey service from product
inception to packaging
FACTORS INFLUENCING THE LOCATION OF FOOD
PROCESSING INDUSTRIES
 Supply of Raw Materials
• Two main sources:
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Local sources meet 40% of the needs of the food
processing industry
Imported raw materials and semi-processed
materials meet 60% of the needs
 Labour supply
• The industry employs more than 9,000 people
• Locals make up the majority of the labour force
• Workers usually live near the plants
 Accessibility
• Transport infrastructure is well developed, making most areas of
the country accessible
• Distribution of products from the factories to the retail outlets is
quick and efficient
 Level of technology
• Ranges from simple to complex
• Canning industry extends the shelf life of foodstuff through the use
of high pressure and temperature, which is relatively low-level
technology compared to freeze-drying and irradiation
 Government
• The government has introduced liberalised import policies to
encourage trade, but protects the domestic food processing
industry by imposing high taxes on selected imports
• CARICOM member countries enjoy duty-free market access to the
domestic market of Trinidad and Tobago
• The government finances the Food Science and Technology Unit of
the University of the West Indies and the Caribbean Industrial and
Research Institute
• The graduates of these institutions are equipped with the
knowledge and expertise to add value to the industry such as by
developing better methods of processing food
TRENDS IN THE INDUSTRY
 Retail food sector is flourishing due to high per capita
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income, large female workforce and rising foreign
investment
Increased competition has led stores to modernise and
update their look and services to attract customers
Higher demand for low-fat items and health food as
people know more about healthy lifestyles and nutrition
Retail outlets are set up in convenient locations, e.g.
supermarkets are located near gyms to cater to healthconscious consumers who want easy access to fruits and
vegetables after their workout
Large quantities of food items are imported to meet
consumer demand
CHALLENGES
 Technology
• Unwillingness to upgrade technology
• Lack of capital to invest in new technology
• Lack of skilled manpower to run new technology
• Seafood industry is trying out new technology given the large market
and the perishable nature of the products
 Standard of processed foods
• Imported products have raised standards
• Local producers must improve their processing methods to make their
products equally attractive
• Investment in research and development is necessary
 Globalisation
• With more foreign products becoming available, local producers are
having a tougher time maintaining their share of the local market
 Research Singapore under the following headings:
 Population – 5.612 million
 Area – 721.5km2
 Climate – equatorial climate
 Nationalities – Chinese, Malay, Indian
 Independence - 1965
 Nearest country - Malaysia
 Main industries -
SINGAPORE
– Singapore is a small, newly industrialised island-state
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located in Southeast Asia
The British began to develop Singapore as a port in 1819.
At that time, its population was around 1,000.
Singapore has been independent since 1965.
Singapore now has more than 5.5 million people.
Most are of Chinese origin. Many are ethnically Malaysian or
Indian.
Health and education are well-developed.
Singapore has the world’s second-largest container port
and sixth airport.
Singapore is a centre for banking and finance.
Singapore is a leading producer of oil rigs, computers,
integrated circuits and electronics.
– There are many migrant workers from other Asian
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countries.
Many borrow heavily to reach Singapore, and remain
in debt during their stay.
Many have short-term work permits.
Some work long hours for less than minimum wages.
Some live in huge dormitories.
FOOD PROCESSING IN SINGAPORE
 The food processing industry was established in
1950s
 It is growing rapidly to keep up with the global
tastes of the resident population
 Singapore has no natural resources and farming
activities are minimal
 As a result, the food processing industry imports
most of its raw and semi-processed materials
 There are 681 food processing companies
 Factories are located in designated industrial
estates scattered all over the country
Characteristics
 Food processing makes up 3% of manufacturing output
 Almost 10% of manufacturing establishments are
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involved in food processing, which are relatively small
95% of companies are small and medium-sized
enterprises (SMEs) - many are family-run
They employ only 7% of the manufacturing labour force
Labour force in an SME may range from a few workers to
about 200 - wages are below the national average
Wages in food processing are ¼ below the average for
manufacturing
Most workers do not want to work in food processing –
mainly short-term migrant workers are employed
 Highly dependent on imported raw materials and semi
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processed materials
Singapore has a small agricultural sector (about 5000
farms, most are 1ha in size)
Products cater to local and international markets
Some niche markets are being exploited internationally There are some large companies which export
convenience foods worldwide. Many are located on
Senoko industrial estate
Products include dairy products, edible oils, beverages,
bakery products, processed meat and chocolate
Food Processing Operations
 Bakeries
 Dairy processors and ice-cream producers
 Noodle and pasta manufacturers
 Producers of soybean products and sauces
 Manufacturers of snack foods
 Factories making products from surumi fish or meat
paste, such as imitation crab meat
Food Processing Businesses
 Some large food processing businesses are located in
the Senoko industrial estate such as:
 Tee Yih Jia produces convenient foods such as frozen
spring roll pastry, samosas, ramen and Asian pizzas –
most products are exported
 Super Coffeemix – produces instant beverages and
convenience food
 Unicurd – produces and exports soya products such as
tofu
 Thong Seik – produces surumi fish products, mushroom
seafood balls and breaded fish fingers
FACTORS INFLUENCING LOCATION
OF FOOD PROCESSING INDUSTRY
 Supply of raw materials
• Almost all the raw materials are imported
 Labour supply
• Most of the workers are locals and short-term migrant workers
• The industry employs about 19,200 people
 Accessibility
• Singapore is well connected to the world by air and sea
• Products are easily and quickly exported to other countries
• Internally, a dense and efficient transport network provides
excellent accessibility between the factories, the retail outlets and
the air and sea ports
 Level of technology
• The technology used has become more advanced to keep up with
global trends and the local demand for variety and quality
• Skilled labour is available to operate the higher-technology
equipment
 Government
• The government has set up designated industrial areas in different
parts of Singapore to cater to different types of industries
• International Enterprise Singapore, a government agency, helps
local food processing companies to extend their regional and global
reach
• Most imported products are not subjected to import duties
Trends
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Retail food sales have been rising in recent years
Lifestyles are changing with increasing affluence
People are dining out more often
Preference for food that is ready to eat or requires little
cooking
 Companies are using technology to increase the shelf
life of products and to increase market share
 Some hypermarkets (supercenter or superstore –
combination of a supermarket and a department store)
and supermarket chains are offering online shopping
Challenges
 Small domestic market
 Need to sell to markets abroad to stay viable
 40% of the products are exported overseas
 Competition from countries that are able to
produce the same items at lower cost due to
cheaper labour
 Need to come up with products that are uniquely
Singaporean using new technology, e.g. instant
roti prata
Question
 Compare the food processing industry in a named
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Caribbean country with that of Singapore under the
following headings:
Raw materials
Labour
Market
Government support