Plant closures in an election season

The closure of ammonia facilities at Point Lisas adds further stress to the already difficult economic situation. But this is particularly traumatic given the fact that this country was once toasted as the world’s largest exporter of ammonia.

The developments have been precipitated by a fall in natural gas prices that has made other markets cheaper as well as oversupply amid the covid19 economic crisis.

Tringen I is due to shutter for maintenance some time in August as a response to current market conditions, according to the plant’s operator Yara International. This will be the second plant to be closed by Yara in the past six months. The plant was due to close on Tuesday but managed to secure a last-minute sale for export.

Last December 31, Yara shut down Yara Trinidad, the smallest of the three plants it operates in Pt Lisas. The other two are Tringen I and Tringen II which Yara – a Norwegian group – jointly owns with National Enterprises Ltd, TT's investment holdings company.

And there have been other closures. In June, Nutrien shuttered its plant which it said would remain down. In May, PCS 02 was also shuttered.

Such closures are not unprecedented. Turnaround activity in the industry is often needed, as it was in 2018 at the Tringen II and Point Lisas Nitrogen Ltd (PLNL) ammonia plants. But back then once these activities ended, sharp production increases were recorded, offsetting declines in production.

Now, though, the worry is that history might not repeat itself.

And the implications for gross domestic product (GDP), revenues, employment and economic activity are severe. Ammonia is key in the basket of energy commodities that make up about half of TT’s exports.

These are some of the pressing matters that have to be addressed in any post-covid19 recovery plan.

In this regard, all eyes are on the phase one report of the committee appointed to develop a Roadmap to Recovery for TT, which was tabled in Parliament mere days before dissolution.

It is hoped political parties will use the campaign trail to debate and discuss such a document so as to preserve some semblance of continuity going forward.

Now that the elections are upon us, there are already questions over whether the work of the committee will be preserved. Though the report is a first iteration of a long-term plan and is subject to scrutiny, it is hoped parties can find a way to ensure minimal disruption in the work of the committee.

The abrupt resignation of the vice-chairman of the committee, the political disagreement over publication schedules and scope, and the question marks now looming due to the imminent election certainly create room for anxiety.

Be that as it may, under a caretaker government, the economy must carry on as best as it can. It is tempting to expect things will be left on auto-pilot, given the traditional policy restraint shown before a poll. But the struggling market and the continued closures suggest there is little time to spare.