The closure of the Luxembourg-owned ArcelorMittal steel manufacturing company in Trinidad and Tobago resulted in an estimated average fall in non-energy exports of US$259.2 million over the period 2016 to 2018, according to a Working Paper released by the Central Bank of Trinidad and Tobago (CBTT).
ArcelorMittal, which was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel, is the world’s largest steel producer, with annual crude steel production of 92.5 million metric tonnes as of 2018.
It closed its operations in Trinidad in March 2016, following the downturn in the international iron and steel industry along with increased competition and domestic considerations.
According to the Working Paper titled ‘Impact of the Closure of a Large Foreign Direct Investment: The Case of ArcelorMittal in Trinidad and Tobago’, the closure of the steel company resulted in an estimated average fall in non-energy exports of US$259.2 million over the period 2016 to 2018 and a forgone improvement in the external current account balance.
“Additionally, the fiscal accounts will not benefit from corporation taxes, business levy tax, green fund levy, Value Added Tax (VAT) and property taxes with the closure of this company. With respect to inflation, while it is expected that iron and steel imports will increase, global prices are forecasted to decline and as a consequence, the impact on inflation is expected to be minimal,” the document said.
The Paper, written by Ashley Bobb, Lauren Sonnylal, Kester Thompson and Reshma Mahabir of the Research Department of the CBTT, noted that more than 700 people lost their jobs as a direct and indirect consequence of the closure of the plant.