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Contents
Caribbean Business Leaders Country Report
Editorial
Eastern Caribbean Area 39
Moving Out Of Your Domestic And Regional Markets To Compete Globally
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The Businessuite Caribbean Top 100 Companies Our Ranking Methodology
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Barbados 40
The International Business Environment
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TOP 10
How Caribbean Business Leaders Viewed The World In 2013.
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Public Companies
Emerging Markets in The Far East – a look at Mayanmar [Burma]
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IN T ERNA T IONA L B USINESS
D oi n g B u s i n e ss In The C a r ibb ean: Whither the Vulnerable Small State; Wherefore the Regional Development Bank
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Balance Of Payments Reflect Developments In The Key Export Sectors
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Caribbean Economies And Regional Economic Developments
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T HE C ARI B B EAN REGION Caribbean Business Leaders On The Caribbean Business Environment In 2013.
Barbados Guyana
TOP 10
Guyana Jamaica
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TOP 10
Jamaica
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Trinidad
TOP 10
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Public Companies
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55 58
Public Companies
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T REN D S & D E V E L OP M EN T S In The Pursuit Of Opportunities Outside Caricom As The Future for Caricom Companies is Outside of Caricom
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Public Companies
Special Report Unlocking Opportunities For Competitiveness And Growth The Role Of Energy
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trinidad
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Bottom 50 Top 40 Top 40 Top 40 Top 10
Caribbean Companies
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Caribbean Public Companies By US$ Profit After Tax
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Caribbean Public Companies By US$ Capitalization
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Caribbean Public Companies by Revenue
63 71
Caribbean Public Companies
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77
#10
80
#9 88
#8
91
#5
#4
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95
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#7
#6
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#3
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#2
#1
t h e 2 0 1 4 r e g i o n a l O u tl o o k Prospects For The Region Are Inextricably Linked To The International Outlook.
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F u t u r e O u tl o o k How Business Leaders See 2014 And Beyond
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Excellence at Work? Why organizations must deliberately set out to avoid mediocrity.
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Please give me a call or email to discuss further. Aldo (Al) Antonio Chief Marketing & Business Development Officer (CMBDO) “Silicon Mountain” Mandeville Jamaica “The Business Technology & Innovation Hub of the Caribbean" 876-280-9192 (Mobile) aldo@blackslateholdings.com
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E d i to r i a l
Moving Out Of Your Domestic And Regional Markets To Compete Globally
GraceKennedy Limited is Building A Global Consumer Group and National Commercial Bank Jamaica is pursuing activities aligned to its strategy of being among the top five financial services institutions in the English and Spanish speaking Caribbean. Goddard Enterprises Limited already has an extensive network of businesses operating throughout the Caribbean, Central and South America. The Massy Group is pursuing investments in Central and South America. The question now is: As you move out of
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The question now is: As you move out of your domestic and regional markets to compete globally, how do you measure yourself?
. . . . . . . . . . . . . . . . ............ your domestic and regional markets to compete globally, how do you measure yourself? How do you compare your operations to those of other international and multinational corporations? The US$ is universally accepted as the international currency of business and measurement of real financial success. To better understand how Caribbean companies are positioned in this larger market space we have to compare them to this international measurement. It is from this that we can truly measure how well they are competing. Wal-Mart for example remained at #1 on the Fortune 500 this year with US$476,294Millions and toppled Royal Dutch Shell to grab the Global 500 top spot. Amica Mutual Insurance Co. is ranked #970 with revenues of US$ 1,998 Million on the Fortune 500. The Caribbean company topping the Businessuite Top 100 Ranking ranks lower than this company. As a matter of fact, the total revenue of the 100
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companies on the Businessuite 2014 Top 100 is just US$12 Million.
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As we researched the 2013 annual reports for this issue we see a trend among Caribbean business leaders. They are increasingly focusing their companies resources on strengthening their home market as a launch pad for growing their international footprints. Markets of specific focus include the USA, Canada, South and Central America, the United Kingdom and new markets in Western Africa and Continental Europe.
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n article in this issue titled “In Pursuit Of Opportunities Outside Caricom “Is The Future for Caricom Companies Outside of Caricom?” describes Caricom, as a place for doing business, as increasingly challenging, with the prospects for real growth for bigger companies dwindling.
It’s an unfair comparison, you may say but that’s how these companies will be measured in the global market race.
The Businessuite News Centre (BNC) through its premier digital, print and online publications, Businessuite Magazine, Businessuite Magazine Digital and the www. businessuiteonline.com has been publishing the hugely popular and widely read annual Top 10 Jamaican CEO’s since 2005 and most recently the annual 50 Most Powerful Women In Jamaican Businesses.
BNC has now expanded its coverage and rankings across the Caribbean and has published the 2014 premier editions of The Caribbean’s Top 100 Public Companies with The Caribbean’s Top 100 CEO’s to come in November . As the only Caribbean magazine with this kind of digitally published corporate and financial information, our reach and exposure is substantially extended beyond the Caribbean. The Businessuite Caribbean’s Top 100 is available online to hundreds of thousands of investors and business executives looking to the Caribbean for investment opportunities and business partners. In arriving at a universally accepted method for our rankings, we researched
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other rankings such as that employed by FORTUNE and FORBES magazines. We sought to adopt these tried and proven methods, adjusting for local peculiarities. The intent is to compare and measure companies on The Businessuite Caribbean Top 100 with those on the FORTUNE and FORBES rankings.
An undertaking of this magnitude would not have been possible without the support of the following people and organisations. Barry Blenman, Operations Supervisor, Business Development, Barbados Stock Exchange Inc. George Edwards, General Manager, Guyana Stock Exchange Mrs. Marlene Street Forrest, General Manager, Jamaica Stock Exchange and her marketing team of Michael Johnson and Neville Ellis Trinidad and Tobago Stock Exchange – Information Department Klao Bell-Lewis, Communications Director and
Companies used for the Businessuite Top 100 are publically listed on one or a combination of the following Caribbean stock exchanges: Jamaica, Guyana, Barbados and Trinidad and Tobago.
Collin Cunningham, Communications Officer at the Caribbean Development Bank
Our primary ranking is based on US$ Revenues, supported by Profits After Tax and Capitalization to further highlight the top performers. We have also included individual Top 10 rankings for the main markets of Jamaica, Trinidad and Tobago, Barbados and Guyana.
Your collective efforts and contribution has made this publication possible.
Sushil Jain, Financial Analyst and Consultant Avril King – Virtual Assistant Services Businessuite News Centre (BNC) and Blackslate Media Group team members
Every effort has been made to ensure the accuracy of the information presented. We however accept that we will make errors and omissions in this our maiden effort. Your assistance in helping to improve the creditability and reliability of the information by pointing out such errors and omissions, in addition to suggestions for improvement, will be greatly appreciated.BM The Publishers Businessuite News Centre (BNC) businessuitemagzine@gmail.com
For the main Businessuite Top 100 Ranking, the companies are ranked by total revenues for their respective fiscal years in US$. Credits
BNC - Businessuite News Centre is a division of the Blackslate Media Group.
Publisher and Editor Businessuite News Centre (BNC) businessuitemagazine@gmail.com Marketing & New Business Development Aldo Antonio aldo@blackslateholdings.com Advertising Sales businessuitemagazine@gmail.com
Businessuite is your source for information, news and tools on starting, running and growing your business. We know your time is valuable and scarce, so we take the time to find, create and present all the information that will be relevant to the success of your business. Businessuite Magazine, Businessuite Online, Businessuite Digital, Businessuite Today, Businessuite Minute and Businessuite News Channel are owned and operated by Blackslate Media a division of the Blackslate (Media) Group Limited “Silicon Mountain” Mandeville Jamaica Kingston & Mandeville Offices 876-280-9192 (Mobile)
Social Media CLICK Digital Agency http://theclickdigitalagency.com/ Graphic Design & Layout Miguel A. Rowe of MD Studio mdstudio09@gmail.com
Corporate Information: Blackslate Holdings “Silicon Mountain” Mandeville Jamaica Kingston & Mandeville Offices 876-280-9192 (Mobile) To learn more about Blackslate go to www.blackslatehldings.com
Photo Credits Sourced From The Annual Reports, Company Websites, Internet And Contributed.
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The Businessuite Caribbean Top 100 Companies Our Ranking Methodology
1. Companies used for the Businessuite 100 are publically listed on one or a combination of the following exchanges: Jamaica, Guyana, Barbados and Trinidad and Tobago.
company’s year-end. Excluded is equity attributable to non-controlling interests. Also excluded is redeemable preferred stock whose redemption is either mandatory or outside the company’s control.
2. For the main Businessuite Top 100 Ranking, the companies are ranked by total revenues for their respective fiscal years in US$.
Dividends paid on such stock have been subtracted from the profit figures used in calculating return on equity. 14. Earnings Per Share The figure shown for each company is the diluted earnings-per-share figure that appears on the income statement. Per-share earnings are adjusted for stock splits and stock dividends. Though earningsper-share numbers are not marked by footnotes, if a company’s profits are footnoted it can be assumed that earnings per share is affected as well.
3. Percent change calculations for revenue, net income, and earnings per share are based on data as originally reported. They are not restated for mergers, acquisitions, or accounting changes. 4. The only changes to the prior years’ data are for significant restatement due to reporting errors that require a company to file amended reports.
15. The five-year earnings-growth rates are the annual rates, compounded.
5. Revenues are as reported, including revenues from discontinued operations when published. If a spinoff is on the list, it has not been included in discontinued operations.
16. Total Return to Investors includes both price appreciation and dividend yield to an investor in the company’s common stock. The figures shown assume sales at the end of 2013 of stock owned at the end of 2012. It has been assumed that any proceeds from cash dividends and stock received in spinoffs were reinvested when they were paid.
6. Revenues for commercial banks and savings institutions are interest and noninterest revenues. 7. Revenues for insurance companies include premium and annuity income, investment income, and capital gains or losses but exclude deposits.
17. Returns are adjusted for stock splits, stock dividends, recapitalizations, and corporate reorganizations as they occurred; however, no effort has been made to reflect the cost of brokerage commissions or of taxes.
8. Revenues figures for all companies include consolidated subsidiaries and exclude excise taxes.
18. Total-return percentages shown are the returns received by the hypothetical investor described above.
9. Data shown are for the fiscal year ended on or before December. 31, 2013. Unless otherwise noted, all figures are for the year ended Dec. 31, 2013.
19. The five-year returns are the annual rates, compounded.
10. Profits are shown after taxes, extraordinary credits or charges, cumulative effects of accounting changes, and non-controlling interests (including subsidiary preferred dividends).
20. Medians: No attempt has been made to calculate median figures in the tables for groups of fewer than four companies. The medians for profit changes from 2012 to 2013 do not include companies that lost money in 2012 or lost money in both 2012 and 2013, because no meaningful percentage changes can be calculated in such cases.
11. Figures in parentheses indicate a loss. Profit declines of more than 100% reflect swings from 2012 profits to 2013 losses.
21. Market Capitalization (on December 31, 2013) is the total value of the issued shares of the company; i.e. the yearend share price times the number of shares outstanding.
12. Balance Sheet Assets are the company’s year-end total. 13. Total stockholders’ equity is the sum of all capital stock, paid-in capital, and retained earnings at the 10
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INTERNATIONA L BUSINESS
The International Business Environment Global Growth Remained Relatively Robust And Inflation Low In 2013, While International Financial Markets Rallied, Driving A Recovery In Foreign Direct Investment (FDI).
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orld output grew by 3% in 2013, marginally below the 3.1% expansion recorded in 2012.
Growth continued to be driven by emerging and developing economies, as advanced economies decelerated slightly during the year. Notably, growth in the United States (US) slowed from 2.8% in 2012 to 1.9%, reflecting the temporary government shutdown and issues relating to the raising of the debt ceiling in the latter part of the year. Euro Zone economies remained in recession for the second consecutive year (-0.7% in 2012 and -0.4% in 2013). However, there were signs that domestic demand was on the rise in advanced economies and economic activity was sufficiently buoyant to support a reduction in unemployment rates – the US and UK in particular saw rates go down to levels not seen since late 2008.
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Inflationary pressures also remained contained globally, as average oil and non-fuel commodity prices were 0.9 and 1.5% lower, respectively, than in 2012. Monetary policy in advanced economies therefore remained largely accommodative, although the US Federal Reserve, while keeping its policy rate low, initiated the so-called “tapering” of its open market operations toward the end of the year. Reflecting the general buoyancy of economic activity, as well as a pick-up in financial markets, global FDI flows having fallen in 2012, are estimated to have increased by 11% in 2013, according to the United Nations Conference on Trade and Development (UNCTAD). BM (Source CDB Annual Report 2013 – Volume One Our Caribbean Economies And Global Context)
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How Caribbean Business Leaders Viewed The World In 2013. To best way to understand the how’s and the whys behind the decisions and strategies employed by Caribbean business leaders we have to first understand how they think and how they see the business world and economy in which they are forced to operate in. Businessuite reviewed the 2013 annual reports for these business leaders and found that they by and large saw the world in much the same way. The following extracts best illustrate. contract by 0.4% in 2013 and grow by 1% in 2014. The UK is forecasted to grow in 2013 and 2014 by 1.4% and 1.9% respectively. Canada’s economy is set to expand by 1.6% and 2.2% in the corresponding periods. Economic activity in China is forecasted to grow by 7.6% in 2013 before moderating to 7.3% in 2014. Average GDP growth in Sub-Saharan Africa is likely to be 5% this year and 6% in 2014. The US economy is expected to expand by 1.6% this year before strengthening to 2.6% growth in 2014.”
A Mixed Bag Of Economic Growth
Ronald F. deC. Harford Chairman Republic Bank Limited
“The mixed bag of economic growth evident in recent years continued into 2013 with developing countries on average recording noticeably higher growth rates than their developed counterparts. The International Monetary Fund (IMF) in its World Economic Outlook of October 2013 projects global growth of 2.9% for 2013 with growth of 4.5% for developing economies and 1.2% for advanced economies.
Impacted By Challenges Facing European Countries “The outlook for emerging markets is fair and although growth has slowed in some emerging markets, they seem only slightly impacted by the challenges facing the European countries. Other economies like the United Kingdom (“UK”) and the United States of America (“USA”) continue to show signs of improvement in job creation, stock market activity and overall economic growth as indicated by consistent stock market improvement over the last few years. In China, a key market for Latin America’s commodity exports, growth is projected to decrease further to 7.25% in 2014 from 7.5% this year. Lower medium-term growth expectations for China have been a key contributor to the decline in commodity prices since the beginning of the year, although they remain at relatively high levels from a historical perspective.” A. Charles Herbert Chairman Goddard Enterprises Limited
Europe’s struggles not only continued but intensified, with the region staring down and averting more than one crisis in the early part of the year. The Euro area economy is expected to
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INTERNATIONA L BUSINESS tighten the monetary policy, popularly known as the process of tapering and tightening. Tapering means gradual withdrawal of monthly stimulus and tightening would be in terms of raising the interest rates.
Enormous Flow Of Liquidity Led To Growth “Over the last few years, the United States and the Western Government have dished out large stimulus packages also known as quantitative easing to spur their ailing economies. The enormous flow of liquidity led them into emerging markets and other countries, resulting in the growth of those economies. Now the United States is planning to
Countries like India and Brazil show signs of reversal and economic activities starting to moderate and policy responses becoming more dovish. The United States Dollar has strengthened significantly over the last six months as investors flock to safety of US Assets, among declining risk appetite and reduction of commodity prices since the start of 2012. The global economy grew by 2.5% in the first half of 2013 and it is projected to grow in the range of 3% to 3.5% in the second half of 2013. The inextricable link between the Caribbean Region and the global economy continues to be the downfall of the region. The Caribbean Region will be significantly constrained by fiscal inflexibility and high levels of unemployment. The tourism dependent economies will continue to struggle.� Yesu Persaud, Chairman Demerara Bank Limited
The international market witnessed high levels of volatility in response to economic indicators which pointed to a rocky global recovery. In the US, there were promising signs in unemployment which fell to 7.2% in September 2013 from 7.8% in the prior year.
Market Witnessed High Levels Of Volatility In Response To Economic Indicators 14
This, together with the recovery in the housing market, prompted the Federal Reserve to consider tapering its bond buy-back programme - Quantitative Easing (QE 3) in May. QE was one of the key accommodative policy measures implemented to return the US economy to growth by increasing liquidity and keeping interest rates low. Following this pronouncement, however, stocks declined, bond yields rose and higher rates threatened the recovery in the housing market. This forced the Federal Reserve to delay its
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decision at the September meeting until the economy and key sectors showed signs of sustainability. With economists forecasting that the twoweek US government shutdown will have a negative impact on growth in the final quarter of 2013, a QE taper could be delayed even further. Soft conditions in the US have prompted the Bank of Canada to revise its growth forecast for that economy to 1.6% for 2013, down from 1.8% in July as the expected pick-up in Canadian exports is yet to materialize. The Eurozone has emerged from an 18-month recession helped by increased output from the larger economies such as Germany and France. However, most economists believe the recovery is too sluggish to overcome the deep problems ailing the region, including mass unemployment, high debt levels and weak financial institutions, any time soon. The European Commission is forecasting that the Eurozone will grow by 1.1% in 2014. The familiar theme in the advanced economies is that growth is positive but weak and could remain fragile in the near future. This will continue to filter through to the developing countries which are largely export dependent. The International Monetary Fund (IMF) forecasts, that the global economy will expand by 2.9% in 2013 and 3.6% in 2014. This projection takes into account the downside risk relating to the expected slowdown in the developing economies.� Hon. Michael Lee-Chin OJ Chairman National Commercial Bank Jamaica Limited
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Emerging Markets in The Far East – a look at Mayanmar [Burma]
Everywhere pristine cars, all looking as though they all arrived on the same day!
Cane Juice production
I read recently in the Democratic Voice of Burma, about the distribution of lottery SIM cards at an affordable $2 per card. As opposed to the ridiculous $200 that a person had to pay for a SIM card prior to 2011. A faster and more reliable Internet infrastructure would make all the difference here. It really is difficult to access and use the internet with any reliability. Audrey Kang, writing in The Straits Times on May 07, 2014 says Many Asian firms are keen to invest in Myanmar to take advantage of the emerging nation’s huge potential, according to a survey from United Overseas Bank (UOB). More than 70 per cent of the 108 companies quizzed - 64 were from Singapore, - indicated that they have plans to expand there within the next year. Myanmar’s huge untapped domestic market potential was the main reason for their expansion into the country, while 39 per cent cited the significant business opportunities due to factors such as needing infrastructure there. october 2014
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The EU recently dropped all sanctions except for an arms embargo, paving the way for potential investment and development projects in the country. The United States has suspended, but not officially ended, sanctions and President Barack Obama and his administration have demonstrated an eagerness to establish a presence in the Burmese market, as well as those in other developing Southeast Asian countries
Clearly, foreign investment and development projects, undoubtedly present opportunities for the local communities, if the governments will let them. There is a skills shortage in this country though; the locals are not being trained fast enough to catch up with the demand for workers, so there are many unfilled vacancies. Especially those that require English speakers. Many who migrated to nearby countries are now returning. The telecommunications and mobile phone sector is gagging for candidates.
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I have been working in Yangon City, [Rangoon], Myanmar which borders China, Thailand, and India. In 2011, after nearly 40 years of military rule, the country presented its new constitution to the world. The United States and the European Union seem to be in a race for who can invest in Burma faster.
Investing into Myanmar is not without its challenges though, and the UOB has looked to strengthen its support for businesses expanding into this market.
. . . . . . . . . . . . . . . . . ........... Investing into Myanmar is not without its challenges though, and the UOB has looked to strengthen its support for businesses expanding into this market. In a recent survey 59 per cent of the local firms polled were concerned about limited bank financing options and lack of clarity around local laws and regulations. Human Rights organisations are paying attention to the distribution of this new wealth because there is an estimated population of 60 million in a country which is 261,227 sq miles with a majority poor population. On the downside, people are being forced off their land in the name of economic development as the developers move in, many are also very eager to sell. If you would like more information, please email me below. BM
Yvonne Witter MA., FCMI, FRSA Global Enterprise Consultant contact@yvonnepwitter.com
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Doing Business In The Caribbean:
Whither the Vulnerable Small State; Wherefore the Regional Development Bank 3 Evident Realities That Demand Immediate Action So, much has been accomplished. Of that, there is little doubt. Having said that, the stark reality is that at the dusk of half a century of nationhood, the small states of the Caribbean appear no less vulnerable, either individually or taken as a collective, than we were at the start of the journey. Indeed, when compared to the global context of fifty years ago, today’s world comprises infinitely more insidious channels through which vulnerability is exacerbated instead of mitigated. What we have not managed to accomplish after fifty years is to lift ourselves beyond the pale of existentially threatening exposure, whether it be to the spectre of climate change or to
the vicissitudinous global economy. Our exposure to the forces of nature has been amply illustrated over the years, with increasingly volatile, unpredictable, and intense weather along with rising sea levels combining to threaten our very existence in some cases and our entire infrastructural and productive base in others. Some of the Caribbean islands and low lying coastal plains will literally disappear under the sea with the most minimal of sea level rises, while others amongst us can have our entire economy decimated by a single severe hurricane. At the same time, our exposure to the increasingly unpredictable external environment is stark, with the global and hemispheric economy more integrated and interconnected than at any previous time in history. The risks arising from low and unpredictable external demand for service products such as our tourism and volatile imported and
exported commodity prices, along with contracting foreign direct investment, official development assistance, and diasporic remittances, conspire to create conditions of extreme unhelpfulness. Meanwhile, our Region’s economic performance has been mixed. The dichotomy between the commodity producers and the service providers amongst us has become more evident and has brought into sharper focus the problematic under-diversification and mono-sectoral dominance persistent in so many of our economies. The result has been retarded growth, fiscal stress, and unsustainable debt. That is where we are today, fifty years on, at a place where in some instances the very viability of the vulnerable small state of the Caribbean appears under threat. Starting from the premise that this viability is for us non-negotiable, an eminently reasonable premise
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state of the Caribbean becomes or, as the case might be, remains a viable entity and, beyond viability, to ensure that it achieves the real and lasting prosperity that its people have anxiously awaited for such a long time? This is the question that must preoccupy the minds and efforts of the intellectual and political leadership of the Region and to which an answer is urgently needed.
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................................................................ ......... In essence, what must we do now to ensure that the vulnerable small
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given the fervour we attach to our independence, the question that inevitably arises is one of defining the interventions that are needed now to attain and secure this viability. In essence, what must we do now to ensure that the vulnerable small state of the Caribbean becomes or, as the case might be, remains a
Firstly, the onset and onslaught of time seem to have brought with them a fading of our conviction on the validity of the single Caribbean identity and the value of Caribbean oneness. Regionalist fervour is being supplanted by parochialist caution, openness by inwardness, competition by protectionism, ideological passion by myopic opportunism. We in the Region seem to be happier contesting against and amongst each other, than contesting together against the rest of the world. Whether the latter is a sign of our times or the zone of greater comfort for us, the inevitable consequence is suboptimal productivity and competitiveness, and the unavoidable victim is the Caribbean citizen, no matter how unbeknownst to him for the time being. We need to work more urgently and concertedly to restore faith in regionalism, pride in regional identity, and enthusiasm for the regional enterprise.
viable entity and, beyond viability, to ensure that it achieves the real and lasting prosperity that its people have anxiously awaited for such a long time? This is the question that must preoccupy the minds and efforts of the intellectual and political leadership of the Region and to which an answer is urgently needed.
Without wishing to create any appearance of preempting the outcome of that effort and, even as we address our minds to finding the answer to that admittedly sweeping and long-vexing question, there are certain evident realities that demand immediate action.
Secondly, I remain convinced that there is no more effective way to achieve this than by demonstrated and demonstrable practical successes in the integration effort, not within the corridors of the regional bureaucracy but in the streets and markets where people’s lives are more immediately touched. The Barbadian company that raises financing in Trinidad, invests in large scale agriculture in Guyana, employs Guyanese workers and grows produce for export back to Barbados and the Eastern Caribbean is regional integration illustrated. The Guyanese manufacturer that establishes a distributorship in Trinidad and Suriname, creates jobs and finds ready markets for his competitively priced goods in those countries, is regional integration illustrated. We need more of these examples of the factors of production from across the Region harnessed for the regional good. There must therefore be renewed haste to remove all impediments to factor mobility across and within a truly single regional space.
Thirdly, certain priority projects for a more effective and competitive single regional space have been languishing for far too long, and must have restored to them the highest degree of urgency. Amongst these is the reduction of vulnerability to climate change, the achievement of greater food security in the Region, the achievement of greater energy security especially by harnessing clean and renewable sources, resolving critical gaps in transport and communications infrastructure, and addressing legislative, regulatory, and institutional impediments to intra-regional trade. Single minded focus must be placed on these long established priority projects if a more competitive regional economy is to be achieved in this generation.
Extract from an Address to the Opening Ceremony of the 44th Annual Meeting of the Board of Governors of the Caribbean Development Bank by Dr. the Hon. Ashni K. Singh, M.P., Minister of Finance of Guyana, and Chairman of the Board of Governors 28th May 2014 Whither the Vulnerable Small State; Wherefore the Regional Development Bank
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Doing Business In The Caribbean:
Balance Of Payments Reflect Developments In The Key Export Sectors
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eserves and Exchange Rates Very preliminary Balance of Payments (BOP), data generally reflected developments in the key export sectors, the reduction in international commodity prices and the pickup in global financial markets. The strengthening of economic activity in most BMCs translated into higher import demand, the effect of which was in some cases offset by reduced import prices. Lower commodity exports and higher travel receipts were generally reflected in merchandise and services trade balances, while the income accounts of some BMCs showed reductions in interest payments related to debt restructuring. Remittances inflows were estimated to have increased in the majority of BMCs, but remained flat in a few. On the capital and financial account, most BMCs benefited from increases in FDI, particularly for tourism related construction, as well as higher inflows of 18
official borrowings, although there were key exceptions. Outturns in relation to foreign exchange reserves varied in line with BOP performances, but import cover generally remained within accepted norms. Foreign exchange reserves increased in the ECCU, Belize and Trinidad and Tobago, and fell in the Bahamas, Barbados, Guyana, Haiti, Jamaica and Suriname. Most BMCs continued to hold reserves in excess of the international 3-month/12-week benchmark. With regard to BMCs operating flexible exchange rates, the Trinidad and Tobago dollar and the Guyana dollar remained relatively stable (depreciating by under 1%), while the Haitian gourde and Jamaica dollar depreciated more sharply. During the year, the Jamaica dollar depreciated by 14.6%, as compared with a 6.8% depreciation in the previous year, reflecting increased foreign-currency demand. The Haitian gourde depreciated by about 3.4%, as official transfers
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and financial inflows related to postearthquake recovery and reconstruction tapered off. Monetary Developments and Financial Stability Monetary developments in the region continued to be characterised for the most part by weak credit and high levels of liquidity, notwithstanding the generally accommodative monetary policy stances maintained by Central Banks. Haiti and Suriname were key exceptions, with credit growing at a brisk pace. Given concerns about increasing risks to macroeconomic stability from the rapid acceleration in credit growth, the Central Bank of Suriname tightened its monetary policy settings. The Central Bank of Haiti effected its tightening of monetary policy settings in response to the depreciation of the gourde, doing so by raising the Bank’s reserve requirement ratios rather than increasing policy rates, as it sought to still support credit growth to
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Regional financial systems generally reported soundness and stability indicators within prudential guidelines, apart from the ECCU indigenous banking sector, which continued to face critical challenges. Non-performing loans (NPLs) remained high in several BMCs, but most institutions appeared to be adequately capitalized and other financial soundness indicators remained within prudential guidelines.
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stimulate economic activity. Domestic credit also expanded in Guyana, but monetary policy became more accommodative toward the end of the year amid signs that inflation and low exchange rate volatility, the monetary authorities maintained the repo rate at an accommodative level in Trinidad and Tobago, aimed at boosting credit in order to support growth in economic activity. At the same time, however, the Central Bank of Trinidad and Tobago took steps to absorb some of the prevailing excess liquidity through its open market operations. Regional financial systems generally reported soundness and stability indicators within prudential guidelines, apart from the ECCU indigenous banking sector, which continued to face critical challenges. Non-performing loans (NPLs) remained high in several BMCs, but most institutions appeared to be adequately capitalized and other financial soundness indicators remained
within prudential guidelines. ECCB took control of the operations of two indigenous commercial banks in Anguilla in August 2013, in order to maintain stability in the regional financial system, and a resolution strategy is under preparation. Meanwhile, the resolution strategy for Antigua and Barbuda Investment Bank (ABIB), which was taken over by ECCB in July 2011, remains under implementation. Fiscal Performance and Debt Fiscal performance deteriorated in 6 of the 9 most highly indebted BMCs, resulting in increased indebtedness, whereas the other 3 saw marked improvements. Revenues shrank in the context of contracting output in Barbados and St. Lucia, the abolition of tourism taxes in Antigua and Barbuda and stagnating grant inflows that offset higher proceeds from the recently extended Economic Citizenship Programme in Dominica. Higher expenditures reflected october 2014
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expanded public sector investment in capital projects in Antigua and Barbuda and St. Vincent and the Grenadines, with the latter also increasing spending to honour wage increases. In addition, there was offbudget expenditure in St. Vincent and the Grenadines for the construction of a new airport. Consequently, notwithstanding cutbacks in capital spending in Barbados, Dominica, Grenada and St. Lucia, or Antigua and Barbuda’s successful completion of an IMF programme in June 2013, debt ratios rose in all 6 BMCs. Preliminary estimates indicate that Barbados had the most notable debt accumulation (approximately 10 percentage-points (pp) increase in the debt ratio to 108% of GDP), followed by Grenada and Antigua and Barbuda (6 pp each to 116% and 95%, respectively), St. Vincent and the Grenadines (3 pp to 73%), Dominica (2.8pp to 72.5%) and St. Lucia (1.5pp to 73.6%). In Barbados, Grenada, St. Lucia and St. Vincent and
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the Grenadines, the run-up in debt was reflected in credit rating downgrades. On the other hand, successful debt restructuring in Belize, Jamaica and St. Kitts and Nevis, as well as satisfactory progress on IMF-sponsored adjustment programmes by Jamaica and St. Kitts and Nevis, underpinned improved debt dynamics and prompted credit rating upgrades for Belize and Jamaica. In the fiscal year ended March 2013, Belize’s fiscal performance was marked by a narrowing of the primary surplus but an improvement in the overall balance, as reduced interest expenditure related to the restructuring of the external debt in March 2013 led to a decline in overall expenditure. There were, however, some subsequent slippages relative to budgeted outturns, due to unanticipated outlays for reconstruction and rehabilitation works following excess rainfall in the second half of 2013, which partially reversed the improvement in the debt ratio. Jamaica has met fiscal targets for the primary and overall balances and tax revenues under an Extended Fund Facility (EFF) arrangement initiated with the IMF in 2013. Notably, the completion of a (second) debt exchange in February 2013 as a prior action under the EFF has contributed to this improved performance by lowering interest payments significantly. The St. Kitts and Nevis government’s strong fiscal performance in 2012 carried over into 2013, with recurrent revenue increasing (largely driven by receipts under the Citizenship by Investment Programme), while recurrent expenditure fell, mainly because of lower interest payments relating to the ongoing restructuring of the public sector debt. Consequently, the St. Kitts and Nevis government reported recurrent and overall surpluses and continued to meet targets under its three-year SBA with the IMF. Significant progress was made on debt restructuring, as a result of which the debt ratio has fallen to approximately 99.7% of GDP at end of 2013, as against 20
approximately 146.5% in June 2011, when the government had first approached creditors about restructuring. Among the ten BMCs with debt ratios below the international benchmark of 60%, fiscal performances were mixed. The five UK Overseas Territories (OTs) all saw improvement in public finances in 2013. Debt ratios among the OTs remained relatively low (under 40% of GDP). However, all remained either in breach of borrowing guidelines (and therefore required UK approval for new borrowing) or dependent on UK budgetary support. Anguilla, BVI and Cayman Islands all recently agreed on new borrowing guidelines with the UK government. Despite improved fiscal performances in 2013, characterised by careful control of expenditures in order to build up operating reserves and facilitate reduction of outstanding debt, all three remained in breach of the new guidelines and would therefore require UK approval for any new borrowing. The other two OTs, Montserrat and Turks and Caicos Islands, remained heavily dependent on UK budgetary support. Montserrat recorded a smaller deficit despite a decline in current revenue and large increases in both recurrent and capital expenditure. This improvement was driven by a significant rise in budget support to finance the increased spending, which largely reflected settlement of arrears and a major geothermal exploration project. There was also a marked improvement in Turks and Caicos Islands’ public finances in 2013, as revenues were boosted by budget support and proceeds from the sale of various assets, while recurrent spending decreased on account of a right-sizing programme and other fiscal consolidation measures, within the context of a recently formulated fiscal strategy.
increases in debt, as public finances came under pressure. In The Bahamas, Haiti, Suriname and Trinidad and Tobago, financial pressures generally reflected increased capital spending and declining revenues, as well as wage settlements in Suriname and Trinidad and Tobago. For The Bahamas, both Moody’s and Standard and Poor’s affirmed their ratings of Baa1 and BBB with negative outlooks correspondingly. Conversely, despite the weakening fiscal position, Suriname’s general fiscal prudence earned it rating upgrades in 2013 by credit rating agencies. It is noteworthy in this regard that the Surinamese government is at the legislative stage of setting up a Sovereign Wealth Fund as a repository of windfall mineral revenues to minimize revenuedriven macroeconomic volatility. Moreover, the debt to GDP ratio, though 15 percentage points above that of 2012, was still relatively low, estimated at 37.1% at the end of 2013. In Trinidad and Tobago, while the debt stock increased in absolute terms as a result of the fiscal deterioration, relatively higher nominal GDP growth resulted in a decrease in the debt to GDP ratio. Guyana was a key exception to the trend within this group of BMCs. The overall deficit narrowed, coming in below the budget target, as the expansion in economic activity was reflected in increased revenues, while debt relief, debt compensation arrangements and loan repayments led to a reduction in the debt stock. (Source CDB Annual Report 2013 – Volume One Our Caribbean Economies And Global Context)
Despite also maintaining relatively low debt ratios, most other BMCs nevertheless recorded significant
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T H E C ARIBBEAN RE G ION
Doing Business In The Caribbean:
Caribbean Economies And Regional Economic Developments Preliminary Estimates Indicate That The Region Grew By An Average Of 1.5% In 2013.
Medium-term policy imperatives center around generating sustained growth which requires a number of factors to occur. Improving the competitiveness of BMC’s includes: 1. Diversification to reduce export concentration, 2. The creation of competitive advantages in non-tourism areas, 3. Improving business facilitation, 4. Investing in infrastructure, 22
including transportation and logistics, to reduce business costs and for greater integration into global supply chains, and 5. Upgrading telecommunications infrastructure for greater economic efficiency. Sustained growth will also be achieved by strengthening regional integration to benefit from scale economies and to foster regional approaches to energy; climate proofing to reduce production and productivity losses that result from damage to infrastructure caused by weather events and climate change; and increasing national savings to reduce vulnerability to sudden stops in capital flows that attend global cyclical troughs and other global economic shocks. With the exception of Antigua and Barbuda, Haiti, St. Kitts and Nevis and Trinidad and Tobago, at national savings
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ebt sustainability, poverty reduction and increased prosperity require sustained growth. The Caribbean Development Bank (CDB) is focused on setting the stage for sustained growth and resilience in its BMCs by improving competitiveness, strengthening regional integration, climate proofing economic infrastructure and increasing national savings.
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Growth in Guyana and Suriname was supported as well by continued investment in mining, despite the fall-off in international commodity prices.
TOP 100
T H E C ARIBBEAN RE G ION among CDB’s BMCs, 15% of GDP over the last decade, is half the average rate in emerging and developing economies. Low savings usually translates into national liability accumulation, low reserve levels and dependence on foreign capital inflows to sustain aggregate demand generally, and investment specifically.
Growth in Guyana and Suriname was supported as well by continued investment in mining, despite the falloff in international commodity prices. Rather than lower oil prices, ongoing maintenance and reduced oil field yield, respectively, led to contractions in mining output in Belize and Trinidad and Tobago, the other major commodity exporters in the region. However, improved overall growth performances in these two economies reflected the general upturn in construction and tourism activity. Trinidad and Tobago also benefited from a rebound in manufacturing. Moderate growth (1% to 3%) in Antigua and Barbuda, The Bahamas, Cayman Islands, Grenada, St. Kitts and Nevis, St. Vincent and the Grenadines and Turks and Caicos Islands was linked to the general improvement in construction and tourism.
International economic developments were reflected in regional sectoral outturns; Preliminary estimates indicate that the region grew by an average of 1.5% in 2013, up slightly from a revised figure of 1.2% for 2012. Higher incomes and employment in advanced economies and renewed flows of foreign direct investment (FDI) contributed to solid growth in construction activity and continued recovery in tourism in most of the Caribbean Developments Bank’s (CDB), Borrowing Member Countries (BMCs). At the same time, lower commodity prices had a dampening effect on mining and agriculture in some BMCs, but also assisted in containing inflationary pressures. Despite lower commodity prices, growth
However, economic activity was sluggish, flat or contracting in the remaining BMCs, as key service industries bucked regional trends. Negligible growth was estimated for Jamaica in 2013, following a marginal decline in 2012, based on indications that a first-half contraction due to underperforming agriculture, manufacturing and tourism was negated in the second half of the year by an improvement in tourism and growth in mining and quarrying. Similarly, after contracting in 2012, economic activity is estimated to have been flat in Dominica, as declines in construction and agriculture were offset by increases in manufacturing and distribution and a turnaround in tourism october 2014
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and distribution. In Montserrat, economic activity contracted slightly, driven by declines in the dominant public administration and construction sectors. The slight contraction estimated for Barbados in 2013 was driven by declines in tourism
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Sudden stops in capital flows, such as that precipitated by the recent global crisis, curtails growth by reducing investment, and/or forcing an adjustment in aggregate demand in response to reserve depletion.
was nevertheless led by commodity exporters. In Guyana, Haiti and Suriname, rates of expansion between 4% and 6% were driven by strong construction and agriculture outturns. Agro-processing also contributed to increased manufacturing output in Guyana. In addition, there were small but noteworthy contributions from the rapidly developing tourism industries in these economies.
Caribbean Companies
In Montserrat, economic activity contracted slightly, driven by declines in the dominant public administration and construction sectors.
and construction activity. The Barbadian economy has remained stagnant since 2008, with growth ranging from -4.1% to 0.8% over the six-year period. Meanwhile, 2013 marked the sixth consecutive annual contraction in Anguilla and the second in both BVI and St. Lucia since 2009. Poor performances in construction in all three countries, as well in financial services in Anguilla and BVI, offset growth in tourism activity. The robust growth in construction activity in most BMCs had positive spinoff effects on the distribution, financial services, real estate and transportation sectors. Notably, there was significant public investment in critical economic infrastructure, including roads in Antigua and Barbuda, The Bahamas, Belize, Jamaica and Turks and Caicos Islands, as well as construction of a new airport in St. Vincent and the Grenadines
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T H E C ARIBBEAN RE G ION
and airport expansions in Antigua and Barbuda and Turks and Caicos Islands. In Haiti, despite ongoing issues of underimplementation of public investment projects, construction activity, including the post-earthquake reconstruction effort, continued to be a significant driver of overall output growth. There was also strong growth in private construction activity, including residential construction in Antigua and Barbuda, Belize and Guyana, together with significant FDI-driven tourism related development in The Bahamas, Belize, Cayman Islands, Grenada, St. Kitts and Nevis, St. Vincent and the Grenadines and Turks and Caicos Islands.
Based on the available data on visitor arrivals, it is estimated that most regional destinations saw a continued recovery in tourism output in 2013. This assessment reflects generally positive arrivals trends in the higher-value-added stay-over segment of the industry, offsetting the impact of challenges in the cruise segment. 24
Strong growth in manufacturing was recorded in Trinidad and Tobago and Guyana, the major producers in the Region, but outturns were mixed otherwise. Manufacturing growth in Trinidad and Tobago was driven by a rebound in cement production from a significant dip in 2012 attributable to industrial unrest. In Guyana, record production levels of milled rice more than compensated for a decline in sugar production and reduced output of alcoholic beverages, pharmaceuticals and paints. Following six consecutive years of
BMC performances in the cruise segment of the tourism industry have been more mixed. Destinations such as The Bahamas, Barbados, Belize and St. Kitts and Nevis recorded strong growth in cruise arrivals, whereas others such as BVI, Cayman Islands, Dominica and Grenada registered significant declines. The ongoing restructuring within the Caribbean cruise industry has resulted in the withdrawal of smaller vessels, which has negatively affected those regional destinations lacking the facilities to cater to the new mega-ships plying Caribbean routes. There have also been indications that some destinations need to improve
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Notwithstanding the general strengthening of economic activity, unemployment levels remained high across the region, while inflationary pressures remained subdued.
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In contrast, declines in construction were recorded in the five BMCs for which overall growth is estimated to have declined — Anguilla, Barbados, BVI, Montserrat and St. Lucia. In these BMCs, declining FDI for tourism-related projects, lower domestic demand and fiscal constraints on government capital investment had a dampening impact on construction activity. There was also a significant slump in construction in Dominica, as public sector projects neared completion, while private activity remained sluggish.
their product offerings. With the ongoing economic recovery in major extra-regional source markets, stay-over arrivals data available for 7 to 11 months of the year show increases across most destinations. Notably, the European market has generally shown improvements relative to 2012, when deeply recessionary conditions and the application of the UK Air Passenger Duty (APD) had depressed arrivals from that source. However, some regional destinations have registered overall declines in stay-over arrivals, attributable largely to a combination of airlift challenges (such as airline closure and route cancellations) in the US and/ or intraregional markets, as well as the high cost of intra-regional travel. These factors have been particularly important in the negative outturns for destinations, that depend heavily on the US and/ or intra-regional markets like Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, and St. Vincent and the Grenadines.
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T H E C ARIBBEAN RE G ION
Jamaica recorded an increase in alumina production, but this was driven by higher capacity utilisation following the resolution of technical problems that previously affected the industry. Rather than lower oil prices, oil extraction was mainly adversely affected by reduced yield of the oil fields, reserve depletion and ongoing maintenance, in Belize, Suriname and Trinidad and Tobago, respectively.
With regard to gold, Suriname and Guyana both recorded increases in output, albeit at a lower rate of increase, reflecting continued investment in smallscale gold mining activity. Meanwhile, diamond mining in Guyana benefited from the fact that diamond prices have moved counter to the general downtrend
In addition to lower commodity prices, crop disease and adverse weather conditions were critical factors in declining output for some agricultural sub-sectors and/or BMCs, whereas others were able to rebound from previous impacts of these factors. For example, sugarcane output declined in Guyana on account of weatherrelated and operational challenges, as well as industrial unrest, although overall agricultural output nevertheless expanded, as improved yields and expanded acreage under cultivation led to record growth in rice production.
Meanwhile, agriculture in Jamaica was generally negatively affected by the passage of Hurricane Sandy in 2012 and drought in 2013. The weather was also a factor in Belize, resulting in declines in citrus and banana output, while Black Sigatoka leaf spot disease continued to affect the banana industry in Dominica. Contrasting examples of BMCs that rebounded from the effects of bad weather and crop disease include: Grenada, where nutmeg and mace output increased as trees have started to recover from the impact of Hurricane Ivan; Haiti, which has seen a stronger than anticipated rebound in coffee and cocoa production from the effects of Hurricanes Isaac and Sandy; and the recovery in banana output in St. Lucia and St. Vincent and the Grenadines from the effects of Hurricane Tomas and Black Sigatoka infestation. Notwithstanding the general strengthening of economic activity, unemployment levels remained high across the region, while inflationary pressures remained subdued. Consumer price inflation in most regional economies continued to moderate in line with international
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. . . . . . . . . . . . . . . .... ...figures ......the for The
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Following on the weak performances of 2012, mining output in most of the major producers in the Region remained stagnant, in the face of continued declines in international commodity prices. For example, Guyana and Suriname recorded declines in bauxite production on account of weak external demand, as reflected in lower prices.
in commodity prices, resulting in a surge in diamond declarations. Based on gold and diamond declarations, double-digit overall growth is estimated for Guyana’s mining sector, while estimates of growth in mining value-added for Suriname are bolstered by strong public and private capital investment in the sector.
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decline, there was a slight recovery in manufacturing output in Barbados, based mainly on increased food production, while beverage, soap and paint production boosted manufacturing activity in Dominica. In contrast, manufacturing declined in Jamaica, reflecting a combination of weak domestic demand and lower ethanol production; and in St. Kitts and Nevis, as exports of electrical components to the US and production of beverages for the domestic market fell.
Bahamas, Jamaica and St. Lucia marked record highs, reflecting job-less growth in The Bahamas and stagnant economic activity in Jamaica and St. Lucia.
. . . . . . . . . . . . . . . . . ........... commodity prices, with some BMCs even experiencing deflationary conditions. Average inflation for the region is therefore estimated at 2.3% in 2013, down from 5.0% and 3.5% in 2011 and 2012, respectively. However, higher inflation in Jamaica mainly reflected depreciation of the exchange rate. Meanwhile, five BMCs for which 2013 labour force data are available reported double-digit rates of unemployment: The Bahamas’ annual jobless rate as measured in May was 16.2%; the annual averages for Barbados, Belize and Jamaica were 11.7%, 12.9% and 15%, respectively; and the unemployment average to September for St. Lucia was 23.8%. The rate for Belize represented an improvement over the corresponding period in 2012. However, the figures for The Bahamas, Jamaica and St. Lucia marked record highs, reflecting job-less growth in The Bahamas and stagnant economic activity in Jamaica and St. Lucia. For Barbados, a slight increase in unemployment reflected the initial impact of public sector lay-offs aimed at drastically reducing the wage bill over the medium term, which got underway in the last quarter of 2013. Anecdotal evidence indicates that unemployment levels also remained elevated in most other BMCs, as job creation continued to lag behind the recovery in output. (Source CDB Annual Report 2013 – Volume One Our Caribbean Economies And Global Context)
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Caribbean Business Leaders On The Caribbean Business Environment In 2013.
Some Green Shoots Emerging “The economic challenges in the region continued during fiscal 2013 with some green shoots emerging in Trinidad, Dutch Caribbean and parts of the Northern Caribbean. Several governments have pursued debt restructuring initiatives in order to put their fiscal house in order and many are implementing fiscal measures which will impact growth in the near term. Against this backdrop which has resulted in a weak business climate, credit demand remains soft. Many of the economies in which we operate rely heavily on tourism and foreign direct investments. The overhang from the economic crisis continues to impede growth and by extension has negatively affected our results. Loan loss provisions this quarter were higher than normal and include an increase in the collective allowance. The Bank is focused on pursuing risk-controlled growth and has taken considerable steps during the year toward the goal of becoming a lower risk bank.”
Contrasting Fortunes For 2013 “The largest economies of the English Speaking Caribbean had contrasting fortunes for 2013. Guyana led the list with a growth rate of 4.3%. Trinidad’s performance in comparison was 2.5%. The worst performing were Jamaica at 0.8% and Barbados whose economy contracted by 0.5%. The performances of the regional economies in 2014 are expected to pretty much mirror 2013, but with small changes. Guyana will have a projected growth of 4.0%, Trinidad 2.6% and Jamaica 1.8%. The Barbados economy is projected to contract by another 0.4%.” Ian R. H. Atherly Chairman Point Lisas Industrial Port Development Corporation Limited
Rik Parkhill Chief Executive Officer CIBC FirstCaribbean
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CARICOM Economies Did Not Fare As Well - Low And Modest Growth “In 2013, the CARICOM economies did not fare as well with low and modest growth, if at all. More particularly, Barbados having not fully recovered from the 2008 crisis fell back into recession in 2013 and Jamaica, with its highly leveraged economy, continued to record negative growth.” Anthony E Phillip Chairman West Indian Tobacco
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Published Annually In December
Even with mounting research from respected universities and think tanks that suggest women by nature are equipped to be better leaders than men (if you don’t believe me Google this for yourself), and interestingly enough, the number crunchers report that company profits are higher when a woman is at the helm, females continue to encounter a slippery slope as they work to journey from the backroom to the boardroom.”
“Globally, while as women we have made some strides as leaders, we still face tremendous challenges. Typically, when people think of a leader, the organizational CEO, what immediately still comes to mind is “he” not “she.”
Who Are The Top 50 Women In Jamaican Business For 2014?
The Businessuite Magazine
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Caribbean Public Companies
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Bottom 50 Caribbean Companies
R ank 2014 511 522
3 4 54 5 55 6 56 7 57 8 58 9 59 10 60 11 61 12 53
The Businessuite Magazine Top 100 Caribbean
62 13
Public Companies
63 14 64 15
16 65 17 66 18 67
The Bottom 50 By US$ Revenue
19 68 20 69 21 70
22 23 72 24 73 25 74 26 75 27 76 28 77 29 71
78 30 79 31 80 32 81 33
34 82 35 83 36 84 37 85 38 86 39 87 40 88 41 89 42 90 43 91 44 92 45 93 46 94 47 95 48 96 49 97 50 98 99 100
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Businessuite Top 100 Caribbean Companies
T otal R evenue T otal R even COMP ANY GraceKennedy Limited Gleaner Company National Commercial Bank Jamaica Ltd.
Guyana Bank for Trade & Industry Ltd. Scotia Group Jamaica Ltd. Barbados Dairy Industries Limited Sagicor Group Jamaica Limited Readymix (West Indies) Limited Supreme Ventures Limited West India Biscuit Compant Limited Jamaica Broilers Group Limited Flavorite Cable andFoods WirelessLimited Jamaica - LIME The West Indies Rum Distillery Limited Seprod Limited Pan-Jamaican Trust Limited Jamaica MoneyInvestment Market Brokers J.P.Desnoes Santos&&Geddes Company Ltd. Limited Scotia Investments Carreras Limited Jamaica Ltd. Caribbean Cement Company Limited Radio Jamaica Limited LascoDistributors Sterling Products Limited Ltd. Producers Group Limited LJJamaica Williams Limited Caribbean Producers Jamaica Ltd. * Berger Paints Jamaica Limited Sagicor Investments Jamaica Limited Dolphin Cove Limited Hardware & Lumber Limited Citizens Bank Guyana Inc. Derrimon Trading Company Limited Proven Investments Jamaica Limited * General Accident Insurance CoJa Mayberry Investments Limited Kingston Wharves Limited Demerara Bank Ltd. LascoManufacturing Limited Jamaican Teas Limited Gleaner Company Blue Power Group Limited Pan-Jamaican Investment Trust Berger Paints Trinidad Limited Scotia Investments Jamaica Ltd. Guardian Media Limited RadioJamaica Limited Palace BergerAmusement Paints JamaicaCompany Limited (1921) Limited Access Financial Services Ltd. Dolphin Cove Limited Cave Shepherd & Company Limited Proven Investments Jamaica Limited * Honey BunInvestments (1982) Limited Mayberry Limited Bico Industries Limited Jamaican Teas Limited Blue PowerCream Group Limited Caribbean Limited Palace Amusement Company (1921) Limited Consolidated Bakeries Jamaica Limited Access Financial Services Ltd. Paramount Trading (Jamaica) Limited Honey Bun (1982) Limited Salada Foods Jamaica Limited Caribbean Container Cream Limited Caribbean Inc. Consolidated BakeriesLimited Jamaica Limited Barita Investments Paramount Trading (Jamaica) Limited Lasco Financial Services Limited Salada Foods Jamaica Limited AMG Packaging & Paper Company Barita Investments Limited KLE Group Limited LascoFinancial Services Limited Jamaica Stock Exchange Limited AMG Packaging & Paper Company Pulse Investments Limited KLE Group Limited Cargo Handlers LimitedLimited Jamaica Stock E xchange Kingston Properties Limited Pulse Investments Limited Eppley LimitedLimited CargoHandlers Montego Ice Co.Limited Limited KingstonBay Properties Humphrey & Company Ltd. E ppley Limited Rupununi Development MontegoBay Ice Co. LimitedCompany Ltd. City Jewelers and Pawnbrokers Ltd. C2W Music Limited * C2W Music Limited * Ciboney Group Limited Ciboney T otal Group Limited Property Holdings Inc.Dollars US$ * Quoted in United States Almond Resorts Incorporated I
october 2014
JA$ 000 67,257,502 31,643 48,941,802
31,364
44,453,718 30,571 42,356,165
27,359 26,861 26,522,970 25,455 19,075,407 22,712 13,921,759 20,902 13,601,445 19,108 12,732,391 18,998 12,241,512 12,089,484 17,704 8,255,354 17,260 7,753,863 15,994 6,990,219 15,959 6,816,959 14,907 6,810,599 14,593 5,255,523 14,419 4,479,755 13,830 4,232,408 13,278 3,659,094 12,171 3,188,709 10,369 2,106,271 9,995 1,914,403 9,170 1,783,997 8,559 1,608,216 7,557 1,502,209 7,382 1,453,003 6,964 1,393,675 6,933 1,226,435 1,044,905 6,705 862,474 6,678 761,541 6,372 701,712 6,296 675,708 5,336 672,945 5,088 642,129 4,642 634,434 4,411 512,700 3,313 467,730 2,933 444,468 2,579 333,875 1,563 295,554 908 259,912 648 157,489 178 91,470 72 65,292 68 17,979 34 1,874 19 0 0 $ 4 26, 4 09, 302 0 0 34,140,265
US$ 000
667,43 485,67
441,140 420,32
338,79
263,20 189,29
138,15 134,97
126,3 121,48
119,97 81,92
76,94
69,36 67,64
67,58
52,15 44,45
42,00 36,3
31,64 20,90 18,99
17,70
15,95 14,90 14,41
13,83 12,17 10,36 8,55 7,55 6,96
6,70 6,6 6,37 6,29 5,0 4,64 4,41 3,31 2,93 2,57
1,56 9 64
1
$ 4 , 231, 5
R ank 2014 1
51 522 3 53 4 54 5 55 6 56 7 57 8 58 9 59 10 60 11 61 12 62 13 63 14 64 15 65 16 66 17 67 18 68 19 69 20 70 21 71 22 72 23 73 24 74 25 75 26 76 27 77 28 78 29 79 30 80 31 81 32 82 33 83 34 84 35 85 36 86 37 87 38 88 39 89 40 90 41 91 42 92 43 93 44 94 45 95 46 96 47 97 48 98 49 99 50 100 101 102
T otal R evenue T otal R evenue C OMP ANY
JA$ 000
GraceKennedy Limited
Dolphin Cove Limited National Commercial Bank Jamaica Ltd. Caribbean Producers Jamaica Ltd. * Scotia Group Jamaica Ltd. Banks Holdings Limited Sagicor Group Jamaica Limited Access Financial Services Ltd. Supreme Ventures Limited Jamaica Producers Group Limited Jamaica Broilers Group Limited LJ Williams Limited Cable and Wireless Jamaica - LIME Lasco Financial Services Limited Seprod Limited West India Biscuit Compant Limited Jamaica Money Market Brokers Limited Pulse Investments Limited Desnoes & Geddes Limited Caribbean Cement Company Limited Carreras Limited Guyana Stockfeeds Inc. Caribbean Cement Company Limited Blue Power Group Limited LascoDistributors Limited Mayberry Investments Limited Jamaica Producers Group Limited Jamaican Teas Limited Caribbean Producers Jamaica Ltd. * J.P. Santos & Company Ltd. Sagicor Investments Jamaica Limited Salada Foods Jamaica Limited Hardware & Lumber Limited Sterling Products Ltd. Derrimon Trading Company Limited Gleaner Company General Accident Insurance CoJa Cargo Handlers Limited Kingston Wharves Limited Paramount Trading (Jamaica) Limited LascoManufacturing Limited Barita Investments Limited Gleaner Company Kingston Properties Limited Pan-Jamaican Investment Trust Derrimon Trading Company Limited Scotia Investments Jamaica Ltd. AMG Packaging & Paper Company RadioJamaica Limited Eppley Limited Berger Paints Jamaica Limited Honey Bun (1982) Limited Dolphin Cove Limited Berger Paints Jamaica Limited Proven Investments Jamaica Limited * Consolidated Bakeries Jamaica Limited Mayberry Investments Limited Bico Industries Limited Jamaican Teas Limited Palace Amusement Company (1921) Limited Blue Power Group Limited Caribbean Cream Limited Palace Amusement Company (1921) Limited Fortress Caribbean Property Fund Access Financial Services Ltd. Caribbean Container Inc. Honey Bun (1982) Limited Montego Bay Ice Co. Limited Caribbean Cream Limited Jamaica Stock Exchange Limited Consolidated Bakeries Jamaica Limited Humphrey & Company Ltd. Paramount Trading (Jamaica) Limited City Jewelers Pawnbrokers Ltd. Salada Foodsand Jamaica Limited Barbados Farms Limited Barita Investments Limited Property Holdings Inc. Limited LascoFinancial Services Rupununi Development Company AMG Packaging & Paper CompanyLtd. Ciboney GroupLimited Limited KLE Group Almond Resorts Jamaica Stock EIncorporated xchange Limited Flavorite Foods Limited Pulse Investments Limited Readymix (West Indies) CargoHandlers Limited Limited Radio Jamaica LimitedLimited Kingston Properties KLE Group Limited E ppley Limited C2W MusicBay Limited Montego Ice Co.*Limited The West Indies Rum Distillery Limited C2WMusic Limited * Barbados Dairy Industries Limited Ciboney Group Limited Cave Shepherd & Company Limited T otal First Caribbean International Limited * Quoted in United States Dollars US$ Cable and Wireless Jamaica - LIME
october 2014
US$ 000
67,257,502 3,196 48,941,802
3,193 2,733 42,356,165 2,680 34,140,265 2,679 26,522,970 2,055 19,075,407 1,626 13,921,759 1,502 13,601,445 1,269 12,732,391 1,131 12,241,512 1,064 12,089,484 1,032 8,255,354 1,016 7,753,863 929 6,990,219 899 6,816,959 898 6,810,599 876 5,255,523 852 4,479,755 843 4,232,408 728 3,659,094 697 3,188,709 521 2,106,271 495 1,914,403 491 1,783,997 387 1,608,216 350 1,502,209 338 1,453,003 329 1,393,675 189 1,226,435 138 1,044,905 138 862,474 98 761,541 97 701,712 86 675,708 71 672,945 13 642,129 634,4346 512,7000 467,7300 (3) 444,468 (32) 333,875 (85) 295,554 (188) 259,912 (247) 157,489 (361) 91,470 (554) 65,292 (620) 17,979 (1,741) 1,874 (2,385) 0 (3,943) $ 4 26, 4 09, 302 (27,493) (48,815) 44,453,718
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667,436 485,678
Bottom 50 Caribbean Companies
441,140
The
420,325 338,794
Businessuite
263,203 189,296 138,154 134,975
Magazine Top
126,351 121,480
100 Caribbean
119,971 81,923
Public
76,946 69,368 67,649
Companies
67,586 52,154 44,455 42,001 36,311 31,643 20,902 18,998
The Bottom
50 By Profit 17,704 15,959 14,907 14,419
After Tax
13,830 12,171 10,369 8,559 7,557 6,964 6,705 6,678 6,372 6,296 5,088 4,642 4,411 3,313 2,933 2,579 1,563 908 648 178 19 0 $ 4 , 231, 510
Businessuite Top 100 Caribbean Companies
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Bottom 50 Caribbean Companies
The Businessuite Magazine Top 100 Caribbean Public Companies
The Bottom 50 By Capitalization
R ank 2014
T otal R evenue T otal R eve C OMP ANY
Businessuite Top 100 Caribbean Companies
US$ 000
1 2
GraceKennedy Limited National Commercial Bank Jamaica Ltd.
67,257,502 48,941,802
667,4 485,6
3 4
Scotia Group Jamaica Ltd. Sagicor Group Jamaica Limited
44,453,718 42,356,165
441,14 420,3
5
Supreme Ventures Limited
34,140,265
338,79
6 7
Jamaica Broilers Group Limited Cable and Wireless Jamaica - LIME
26,522,970 19,075,407
263,2 189,2
Seprod Limited
13,921,759 13,601,445
138,15 134,9
12,732,391 12,241,512
126,3 121,4
12,089,484 8,255,354
119,9 81,9
8 9 10 11
Jamaica Money Market Brokers Limited Desnoes & Geddes Limited Carreras Limited
12 13
Caribbean Cement Company Limited LascoDistributors Limited
14
Jamaica Producers Group Limited
7,753,863
76,9
15 16
Caribbean Producers Jamaica Ltd. * Sagicor Investments Jamaica Limited
6,990,219 6,816,959
69,3 67,6
17
Hardware & Lumber Limited
6,810,599
67,5
18 19
Derrimon Trading Company Limited General Accident Insurance CoJa
5,255,523 4,479,755
52,1 44,45
20 21 22 23 24
Kingston Wharves Limited LascoManufacturing Limited Gleaner Company Pan-Jamaican Investment Trust Scotia Investments Jamaica Ltd.
4,232,408 3,659,094 3,188,709 2,106,271 1,914,403
42,0 36,3 31,6 20,9 18,9
25 26
RadioJamaica Limited Berger Paints Jamaica Limited
1,783,997
17,70
27 28
Dolphin Cove Limited Proven Investments Jamaica Limited *
1,608,216 1,502,209 1,453,003
15,9 14,9 14,4
29 30 31 32 33 34 35
Mayberry Investments Limited Jamaican Teas Limited Blue Power Group Limited Palace Amusement Company (1921) Limited Access Financial Services Ltd. Honey Bun (1982) Limited Caribbean Cream Limited
1,393,675 1,226,435 1,044,905 862,474 761,541 701,712 675,708
13,8 12,1 10,3 8,5 7,5 6,9
36 37 38 39 40 41 42 43 44 45
Consolidated Bakeries Jamaica Limited Paramount Trading (Jamaica) Limited Salada Foods Jamaica Limited Barita Investments Limited LascoFinancial Services Limited AMG Packaging & Paper Company KLE Group Limited Jamaica Stock E xchange Limited Pulse Investments Limited CargoHandlers Limited
46 47 48 49
C2WMusic Limited *
50
Ciboney Group Limited T otal
672,945 642,129 634,434 512,700 467,730 444,468 333,875 295,554 259,912
6,7 6,6 6,3 6,2 5,0 4,6 4,4 3,3 2,9 2,5
Kingston Properties Limited E ppley Limited
157,489 91,470 65,292
1,5 9 6
MontegoBay Ice Co. Limited
17,979
* Quoted in United States Dollars US$
32
JA$ 000
I
october 2014
1,874 0 $ 4 26, 4 09, 302
$ 4 , 231,
T H E C ARIBBEAN RE G ION
Special Report
Unlocking Opportunities For Competitiveness And Growth: The Role Of Energy
M
r. Chairman, we recognise that Guyana, a founding member of CDB, is not being left behind in the continent’s economic awakening. Indeed, in recent times, Guyana has recorded consistently high economic growth rates and impressive improvements in many of its key indicators of social and economic performance. For these reasons, this occasion represents an ideal setting for us to examine the nexus between competitiveness and economic growth, and the role that energy plays in this mix. As CDB’s borrowing member countries (BMCs) move to strengthen trade with South America, Guyana occupies a strategic position as a gateway to this great continent. Guyana occupies a strategic position as a gateway to this great continent.
Dr. Wm. Warren Smith, President, Caribbean Development Bank.
But, if our aspiration to end poverty in our Region and to provide high quality jobs for our young people is to be realised; and if the dream of our founding fathers for a just and prosperous Caribbean is to be fulfilled, then our industries must be equipped and facilitated to compete in South and North America. They must be equally prepared to take advantage of the opportunities being offered through the European Economic Partnership
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Agreement; the hopefully imminent Caribbean-Canada Trade Agreement; and the burgeoning markets of the middle and far eastern countries. When we see new export-focused industries taking firm root in our economies, then, and only then, can we be assured that the right foundation for the sustainable prosperity of our people has been laid. Recently, we have been talking a lot about economic growth, which is an essential element in the prosperity puzzle. But for economic growth to be sustainable, it must be undergirded by competitiveness, which has to be global in its outlook and in its reach. Three Propositions In Relation To Competitiveness This morning, I invite you to consider three propositions in relation to competitiveness. First, Caribbean countries have a competitiveness problem; and it is at the root of our difficulty in achieving the high rates of economic growth which we need to be able to provide the standard of living to which our people aspire. Second, the high price of electricity is a major source of our region’s uncompetitiveness, and of our vulnerability to external shocks.
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T H E C ARIBBEAN RE G ION Third, we can increase our energy independence substantially; reduce the cost of energy; and in the process, create a whole new industry based on a new paradigm.
The rankings confirm that our BMCs will have difficulty maintaining existing markets and penetrating new ones unless there is radical transformation in the way we do business. Importantly, the two surveys highlight several areas which we need to address. These include inadequate transportation, telecommunication and logistics infrastructure; insufficient access to affordable credit; bureaucratic red-tape; low productivity; and high energy costs. So, the inability to compete stands out as a major challenge for our Region.
Lack Of Competitiveness Constrains Growth I will not detain you for too long, on my first proposition that lack of competitiveness is our biggest constraint to growth.
Among the BMCs, the outliers are households in fossil-fuel-endowed Suriname and Trinidad and Tobago, where rates were under US 0.07 cents per kWh. These rates are approximately four times the average rates in North America. A similar situation obtains for commercial and industrial rates.
So, we are forced to ask, “Why are electricity prices in the Caribbean so high?”
Lack of competitiveness is our biggest constraint to growth. Our anemic growth performance is further manifested in widening fiscal imbalances; high debt ratios; and declining levels of foreign exchange reserves.
High Energy Prices And Reliance Primary Sources Of Uncompetitiveness And External Vulnerability
According to two reputable surveys with which most of you are familiar - The World Bank’s “Doing Business” Survey and the World Economic Forum’s Global Competitiveness Index – the Caribbean’s ranking does not compare well with other countries in the area of competitiveness.
We cannot transform the Caribbean’s competitiveness landscape without a frontal attack on energy costs and the generally poor state of our electricity infrastructure.
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Prices also vary significantly from country to country. Household tariffs in 2012 ranged from a high of approximately US 0.48 cents per kWh in Dominica and Montserrat to a low of US 0.25 cents per kWh in Belize where the energy mix includes some renewables, namely hydro and biomass.
An enterprise survey conducted by the World Bank in 2010 found that at least 30 (%) of Caribbean firms identified electricity costs as a major constraint to doing business.
High rates of economic growth have eluded the majority of CDB’s BMCs, for a long time. Our Region’s economic expansion of 2 percent (%) per annum over the past decade has been consistently below the global rate of 3.8%; lower than the 4% average for other Small Islands Developing States (SIDS); and way below the average of 6% for emerging and developing countries.
For example, out of 189 countries surveyed for the Doing Business index, the average ranking for the Caribbean is 100.
“Why are electricity prices in the Caribbean so high?”
This brings me to my second proposition.
Most people in this audience will agree that electricity costs in our region are very high. In general, households pay between US 0.30 cents and US 0.40 cents per kilowatt hour (kWh).
Businessuite Top 100 Caribbean Companies
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First, the combination of high diesel and heavy fuel oil costs and the inherent inefficiency of diesel technology, which accounts for the majority of the generation in BMCs, are the principal contributors to these high electricity prices. Further, these fuel prices are subject to the volatility of international oil markets, which are highly responsive to shifts in geo-politics. Second, small market size and the absence of economies of scale in the generation of electricity compound the problem. At least 30 (%) of Caribbean firms identified electricity costs as a major constraint to doing business. Third, most generation facilities in the Caribbean are approaching the end of their useful life, many being more than 20 years old. These facilities, therefore, do not benefit from the efficiencies inherent in the new technologies built into generators of more recent vintage.
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T H E C ARIBBEAN RE G ION
The macro-economic impact of the high cost of imported fuel and the consequential high electricity price are reflected in deteriorating performance indicators in most BMCs. High levels of debt to GDP and depletion of foreign reserves are directly related to this dependence on imported oil. High electricity prices erode the competitiveness of the regional economies and, therefore, their ability to earn the required foreign exchange to pay for imports, including oil. Unless, therefore, we can reduce our dependency on imported fossil fuels, and unless we can substantially reduce energy costs, we will not succeed in improving our competitiveness and reducing our vulnerability to external shocks.
energy prices could, potentially, also open the door for the emergence and growth of new nontraditional businesses that promote the use of energy efficiency technologies”
......................
.........................
. .. .. .. .. .. .. .. .. .. .. .. .. .. .. fight against high ......“Our
All of these renewable options have the potential to lower electricity costs, and increase foreign exchange reserves from reduced energy imports.
With our considerable potential to enhance regional energy security, save foreign exchange, improve the competitiveness of Caribbean economies; and with falling prices of renewables, including solar energy technologies, what prevents us from taking advantage of the opportunity to create a Shakespearian-type “sea-change” in the Caribbean’s energy landscape?
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
There has been a perception that Trinidad and Tobago is the only energy-rich country in the Caribbean.
Suriname. Additionally, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines have great potential to generate their entire base-load electricity requirements from geo-thermal sources. Although their domestic markets are quite small, technological advances in the development of undersea transmission cables would allow these countries to exploit their relatively large geo-thermal reserves for export to neighbouring countries. Evolving renewable energy technology and recent price reductions can potentially bring about a transformation in the energy landscape to the extent that all BMCs can now harness their available resources.
The Caribbean Is Not Energy Poor This brings me to my final proposition. There has been a perception that Trinidad and Tobago is the only energyrich country in the Caribbean. However, ladies and gentlemen, today we now know that our other BMCs are definitely not energy poor. Guyana alone has enough renewable energy potential, mainly in the form of hydro-power to meet all of its electricity requirements for the foreseeable future; supply all of the needs of immediate neighbours, Grenada and Trinidad and Tobago; and still have enough left over to sell to neighbouring Brazil. The situation is similar for
For example, Jamaica can meet up to 30% of its electricity needs from renewable sources such as wind, solar, mini-hydro and waste-to-energy. According to a study by the Worldwatch Institute in the USA, Jamaica’s annual average solar insulation ranges from 5 to 8 kilowatt hours per square meter per day. In comparison, Germany, the global leader in solar photovoltaic (PV), has only a few locations with a capacity in excess of 3 kilowatt hours per square meter per day. Jamaica’s situation is not unique. All BMCs boast similarly strong solar potential.
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It is my view that the legislative and regulatory environment is a major hindrance to the pursuit of a new energy paradigm for our Region. There are two priority areas for urgent government action. CARICOM energy ministers have already adopted “net-billing” as a feasible mechanism for “ensuring equitable pricing” One, we need to change the legislative framework, at the national level, in order to facilitate access for renewables by altering the monopoly on generation where this exists in BMCs. Revisions in the framework should ensure equitable pricing for supply from independent power providers or small, distributed renewable generators of electricity. It is noteworthy that CARICOM energy ministers have already adopted “netbilling” as a feasible mechanism for “ensuring equitable pricing”. As a matter of urgency then, all BMCs should follow the lead set by Barbados and Jamaica, which have already enacted the supporting legislation. Two, an appropriate regulatory framework needs to be established for each BMC to ensure that equitable tariffs and rules for optimal performance are in place and to make certain that the interests of consumers, investors and governments are balanced. Given
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T H E C ARIBBEAN RE G ION
the constraints of market size, and the availability and cost of specialised skills necessary for the effective administration of the regulatory function, it makes sense for a collective approach to be adopted. It is for this reason that CDB welcomes the Eastern Caribbean Energy Regulatory Authority initiative; applauds those OECS countries that have already committed; and looks forward to the full participation by other member countries. I would go so far as to say that such a supra-national regulatory body is critical for full and sustainable development of the geothermal potential in the sub-region, to encourage private investment in the sector, and to make interconnectivity a reality. The building of a new energy paradigm must give priority to energy efficiency, which is relatively low-cost and yields a high return on investment with a short payback period. A successful energy efficiency programme, incorporating appropriate tax incentives, would reduce household expenditure on electricity and other forms of energy, thereby increasing disposable incomes. Businesses, especially the critically important
36
micro, small and medium sizedenterprises (MSMEs), would also see improvements in their efficiency and their competitiveness.
1. We have a competitiveness problem, which is responsible for our relatively low rates of economic growth;
Our fight against high energy prices could, potentially, also open the door for the emergence and growth of new nontraditional businesses that promote the use of energy efficiency technologies and services to reduce energy consumption. The growth of industries producing and/or installing solar water heating systems are the most familiar of the new industries that have emerged in our region as a response to high energy prices.
2. The high price of electricity and our heavy reliance on imported fuels make us vulnerable and are the primary sources of our region’s uncompetitiveness; and
In the new energy paradigm, we should expect an expansion in new industries around a range of energy services, and the manufacture and installation of PV and other renewable energy systems and energy saving devices.
Role Of CDB
The new paradigm is integral to the “Green Economy” approach currently under consideration by some BMCs, and is consistent with the CDB’s Climate Resilience Strategy. This morning, I have put three basic propositions on the table:
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3. We can increase energy independence substantially; reduce the cost of energy; and create a whole new industry based on this new paradigm.
The inevitable question which you must be asking at this stage, ladies and gentlemen is, “What role does CDB play in helping the Region to address the competitiveness challenge and to make the transition to the new energy paradigm?” Promoting poverty reduction through inclusive and environmentally sustainable growth and building resilience to external shocks and natural hazard events underpin all of CDB’s development financing and technical
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T H E C ARIBBEAN RE G ION
assistance to its BMCs. Within that broad framework, the Bank has been intensifying its focus on renewable energy and energy efficiency. Our flagship programme, the Basic Needs Trust Fund (BNTF), has been a useful mechanism for encouraging the use of renewable energy at the community level. In Guyana, the largest beneficiary of this programme, we have used BNTF successfully to achieve this objective. With its extensive hinterland, its dispersed population, and the consequential challenge of electricity supply, Guyana is ideal for the continued roll-out of renewable energy solutions.
Project in Guyana has been including PV components, where relevant, in social infrastructure sub-projects. PV systems are often the solution of choice in remote areas where diesel is moved by river transport at relatively high cost. Under BNTF 6, ten sub-projects, which included PV systems, have been completed, for a total installed capacity of 7.3 kilowatts. It is estimated that these 10 sub-projects have changed the lives of nearly 5,000 citizens. I must share with you the story about the Kwatamang Village in Upper Essequibo, where there was no grid-connected electricity supply; and a couple of manual hand pumps provided the only access to water for residents.
Over the last three years, the BNTF CDB has been creatively using renewable energy solutions to improve the quality of life of the poor.
.........................................
We are very good at analysis; but we need to become excellent at praxis! We know what needs to be done; and we just need to do it!
With the inclusion of only 700 watts of PV-installed capacity in the sub-project design for the operation of a submersible pump, 408 persons – 220 males and 188 females, comprising 65 youth – are now the proud beneficiaries of regular water supply! We are replicating this work in the remaining nine BNTF beneficiary countries, where we have success stories similar to that of the Kwatamang Village. Through the BNTF, therefore, CDB has been creatively using renewable energy solutions to improve the quality of life of the poor. In the private sector, the Bank has also been working with MSMEs, mainly in the OECS countries, to improve their october 2014
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efficiency and their competitiveness. Drawing on the expertise of the Caribbean Technological Consultancy Services Network, we have been assisting MSMEs with the conduct of energy audits, which will inform retrofitting for financing by CDB through local financial intermediaries. The Bank has also implemented a USD1.5 million project through the OECS Secretariat to develop energy efficiency and energy awareness strategies and to support legislative reform in the Eastern Caribbean. Organisationally, a Renewable Energy/ Energy Efficiency Unit has been created, among other things, to prepare a new Energy Sector Policy and Strategy for CDB; develop new financing instruments; and champion the Bank’s interventions in the area. This Unit will benefit from specialist expertise provided by the Government of Germany. CDB has financed electricity generation, transmission and distribution facilities in its BMCs virtually since the Bank’s inception. We will continue to do so, including collaborating with development partners. Many of the generating plants are obsolete and need to be replaced by a mix of technologies comprising renewables and natural gas. It is estimated that as much as USD10 billion investment in new generation capacity could be required within the medium term if the region’s electric utilities are to benefit from efficiencies associated with the new technologies and for them to maintain adequate
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T H E C ARIBBEAN RE G ION
reliability. To radically transform the energy generation landscape, the investment requirements could exceed USD20 billion.
The majority of our BMCs are caught in a vortex of low growth and stagnant or declining living standards. Conclusion In closing, let me leave you with some final thoughts. The majority of our BMCs are caught in a vortex of low growth and stagnant or declining living standards. In contrast, many of the SIDS are out-performing us; and the newly emerging countries of Africa, Asia, and South America are either catching us or rapidly leaving us behind. 38
We are very good at analysis; but we need to become excellent at praxis! We know what needs to be done; and we just need to do it! The energy challenge is not a new one! We have known about it for at least 40 years, since the first oil shock in 1973. What is clearer today is that we do not need to continue as helpless victims of the vagaries of the international oil markets. Nor do we have to remain uncompetitive because electricity prices are like an albatross around our necks. Our leaders of the 1930s - 1960s fought tirelessly for our political independence. As today’s leaders, we must move to secure all aspects of our nationhood; and one critical area is energy security. We must take full responsibility and ownership by addressing decisively the competitiveness and energy handicaps which threaten us now. If they go unfixed, generations to come will be affected. It is not an impossible dream for small states like ours to compete successfully on the international stage. If you believe that I indulge in tiresome hubris, I urge you to speak to Grenada’s Kirani James;
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to Kim Collins of St. Kitts and Nevis; to Hasely Crawford and Wendell Mottley of Trinidad and Tobago; and to Usain Bolt and Shelley-Anne Fraser-Pryce of Jamaica. Indeed, speak to the vast number of Caribbean athletes, past and present, who have conquered the world of track and field by focusing on doing the things that make them world class! The Caribbean has faced, and it has overcome many obstacles in the past. If we are to triumph over today’s competitiveness and energy challenges, we would do well to heed the counsel of Saint Francis of Assisi to “start by doing what’s necessary; then do what’s possible; and suddenly, we are doing the impossible!” Mr. Chairman, I thank you! Extracted from a presentation entitled “Unlocking Opportunities For Competitiveness And Growth The Role Of Energy” by Dr. Wm. Warren Smith President Caribbean Development Bank at the Forty-Fourth Annual Meeting of The Board of Governors Guyana May 28 and 29, 2014
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Caribbean Business Leaders Country Reports Eastern Caribbean Area
Grenada
“Preliminary data show that, on average, the economy of the East Caribbean area expanded during the first half of 2013, with major sectors like construction, hotels and restaurants, and agriculture all recording increases in output. For the six-month period, total visitor arrivals declined by a significant 6.9%, compared to a decline of 4% in the same period of 2012. The IMF estimated that this region experienced a decline in GDP in 2012 of 0.2%, and 1% and 2% growth is projected in 2013 and 2014, respectively. Nyree D. Alfonso Chairperson First Citizens Group
The start of the Bank’s financial year in October 2012 saw the continuation of challenging circumstances for Grenada. The island’s economy contracted by 0.8 % in 2012 a reversal of the 1% growth of a year earlier. The decline was due largely to contractions in construction and tourism of 16% and 1.2% respectively, with agriculture being the only significant growth sector at 6%. The key tourism sector saw an almost 22% drop in cruise ship visitors along with a 1.4% decline in stay-over visitors as increases in US and Canadian tourists were not enough to offset lower numbers of UK visitors. This trend continued into 2013, with a 1% drop in air arrivals in the January -February period.
the fiscal deficit is projected at 6.9% for 2013 and unemployment was estimated to be over 40%. In this environment, not surprisingly, financial sector indicators remained weak. In March 2013, after the Government failed to make a payment on its US$193 million debt, the country’s local and foreign currency ratings were downgraded to Selected Default (SD) by Standard and Poor’s. The debts are currently in the process of being restructured. Economic conditions are expected to be challenging going forward, with the IMF projecting growth of 0.7% in 2013 and 1% in 2014. Ronald F. deC. Harford Chairman Republic Bank Group Limited
The country’s debt to GDP ratio stood at 108.2% of GDP in December; october 2014
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T H E C ARIBBEAN RE G ION
Caribbean Business Leaders Country Report
Fiscal, external and financial vulnerabilities remain significant. “In the Caribbean, fiscal, external and financial vulnerabilities remain significant in the tourism dependent economies. Barbados’ economic fundamentals continue to weaken, reflecting not only the tough global economy, but also reduced competitiveness and structural shortcomings. Barbados’ narrow and open economy continues to suffer from the 2008 global financial crisis. Results for the first half of 2013 show that Barbados has fallen back into recession after a very weak recovery in 2010-2012, with average annual real Gross Domestic Product (“GDP”) growth of just 0.4% in those years (slightly negative on a per capita basis). A decline in real GDP of about 0.5% in 2013 and a slow recovery in 20142015 have been projected.”
.............................................................. Mr. A. Charles Herbert
Pressure Placed On Country’s Foreign Reserves “As the global economic and financial crisis remained with us during fiscal 2013, Barbados continued to be severely affected by the issues experienced by its major trading partners. There was weak economic performance in the key export sectors together with significantly lower foreign capital inflows which constrained the prospects of economic growth in the country. As a direct result, pressure was placed on the country’s foreign reserves which necessitated significant policy adjustment as noted by the Central Bank of Barbados. This adjustment was described as fiscal consolidation and was reflected in increased taxation and expenditure controls. The domestic insurance market responded to the current economic environment with competitors seeking to gain market share with aggressive marketing and pricing strategies.
The Barbados economy continues to be confronted by the challenges of the global economic recession and contracted by 0.2% in 2013. There were declines in key industries, with tourism and construction contracting by 1% and 12% respectively. The inflation rate fell to 2% by October 2013 from 6.5% in 2012, while the unemployment rate averaged 11.2% for the first nine months of 2013. Decline in reserves from May 2013 onwards required fiscal contraction measures outlined by an 18-month fiscal adjustment package in August 2013, which includes job cuts equivalent to about 11% of the public sector workforce or 3,000 employees.”
................................................................... Ingrid Innes
Managing Director & Chief Executive Officer The Insurance Corporation of Barbados Limited Caribbean Business Leaders on The Caribbean Business Future Environment in 2014.
Chairman Goddard Enterprises Limited
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TOP 10
Barbados Public Companies
2014 Businessuite Top 10 Barbados Public Companies -
Ranked by 2013 US$ Revenue
Rank 2014 1 Sagicor Financial Corporation 2 First Caribbean International Limited 3 Goddard Enterprises Limited 4 Light & Power Holdings Limited 5 Cable & Wireless (Barbados) Limited 6 Banks Holdings Limited 7 Insurance Corporation Of B'DOS Limited 8 Barbados Dairy Industries Limited 9 West India Biscuit Compant Limited 10 The West Indies Rum Distillery Limited 11 Cave Shepherd & Company Limited 12 Bico Industries Limited 13 Almond Resorts Incorporated 14 Barbados Farms Limited Total
Businessuite Top 100 Caribbean Companies
Revenue (BB$'000)
Cur US $ US $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $
962,625 624,472 344,420 179,001 111,479 60,531 53,186 44,969 14,616 13,727 0
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Revenue (US$'000) 1,039,483 529,852 486,174 315,390 173,949 90,405 56,302 30,571 26,861 22,712 7,382 6,933 0 0 $2,786,014.32
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T H E C ARIBBEAN RE G ION
TOP 10
Barbados Public Companies
2014 Businessuite Top 10 Barbados Public Companies -
Ranked by 2013 US$ Profit After Tax
R ank 2014 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
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Cur Light & Power Holdings Limited Goddard Enterprises Limited Insurance Corporation Of B'DOS Limited Cable & Wireless (Barbados) Limited Sagicor Financial Corporation Banks Holdings Limited West India Biscuit Compant Limited Bico Industries Limited Fortress Caribbean Property Fund Barbados Farms Limited Almond Resorts Incorporated The West Indies Rum Distillery Limited Barbados Dairy Industries Limited Cave Shepherd & Company Limited First Caribbean International Limited T otal
Businessuite Top 100 Caribbean Companies
BDS $ BDS $ BDS $ BDS $ US $
BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ US $
I
Pr ofits ( B B $'000) 54,212 33,988 16,459 8,993 4,120 5,411 2,973 374 194
(169) (3,447) (4,722) (7,807) (27,493) $83,086.28
october 2014
Pr ofits ( US$'000) 27,380 17,166 8,313 4,542 4,120 2,733 1,502 189 98 0 (85) (1,741) (2,385) (3,943) (27,493) $30,394.32
T H E C ARIBBEAN RE G ION
TOP 10
Barbados Public Companies
2014 Businessuite Top 10 Barbados Public Companies -
Ranked by 2013 US$ Market Capitalization
Rank 2014 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Company First Caribbean International Limited Cable & Wireless (Barbados) Limited Light & Power Holdings Limited Goddard Enterprises Limited Sagicor Financial Corporation Banks Holdings Limited Insurance Corporation Of B'DOS Limited Cave Shepherd & Company Limited Fortress Caribbean Property Fund West India Biscuit Compant Limited The West Indies Rum Distillery Limited Almond Resorts Incorporated Barbados Dairy Industries Limited Barbados Farms Limited Bico Industries Limited Total
Businessuite Top 100 Caribbean Companies
Cur
US $ BDS $ BDS $ BDS $ US $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $ BDS $
Total Assets (BB$'000) 11,439,114 341,279 1,137,872 372,641 5,297,752 64,990 422,747 78,763 108,959 15,222 18,827 107,369 21,814
BDS $ BDS $
23,228 $19,450,576.57
Total Shareholders Equity (BB$'000) 1,554,580 158,181 797,624 461,301 512,097 303,241 155,696 99,554 75,338 43,202 25,524 4,234 25,158
Market Value (BDS $ Only)
4,699,741,819 709,324,730 443,544,761 369,766,837 340,387,062 196,506,893 101,878,514 49,677,481 36,174,299 30,315,715 21,924,320 18,066,261 14,073,282 10,303,647 14,729 4,168,568 $7,045,854,189.39
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Earnings per Share (in the respective currency) ($1.70) $0.06 $2.79 $35.20 ($0.13) $9.30 $0.38 ($0.45) $0.03 $1.21 ($1.01) ($0.30) ($1.01) $0.16
Market Value (USS $ Only) 2,373,606,979 358,244,813 224,012,505 186,750,928 171,912,658 99,245,905 51,453,795 25,089,637 18,269,848 15,310,967 11,072,889 9,124,374 7,107,718 5,203,862 2,105,337 $3,558,512,216.86
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Published Annually In November
“Multinationals with the ability to execute supported by the strength of their capital base, extensive human resources, physical infrastructure and the global strength of their head offices have for many years dominated in the Caribbean. Caribbean Business leaders are now pushing back and competing successfully with these multinationals on their home turf.”
Trinidad and Tobago, Barbados, Guyana and Jamaica
Who Are The Caribbean Top 100 CEO’s For 2014?
The Businessuite Magazine
Top 40
Caribbean Public Companies By US$ Profit After Tax
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TopCaribbean 40 Companies The Businessuite Magazine Top 100 Caribbean Public Companies
The TOP 40 By US$ Profit After Tax
R ank 2014 1 11 2
12 3 13 4 14 5 15 6 16 7 17 8 18 9 10 19 11 20 12 21 13 22 14 23 15 24 16 25 17 26 18 27 19 28 20 29 21 30 22 31 23 24 32 25 33 26 34 27 35 28 36 29 37 30 38 31 39 32 40 33 41 34 42 35 43 36 44 37 38 45 39 46 40 47 41 48 42
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46 47 48
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T otal R evenue T otal R evenue COMP ANY GraceKennedy Limited Sagicor Group Jamaica Limited National Commercial Bank Jamaica Ltd.
JA$ 000
The West Indian Tobacco Company Limited Scotia Group Jamaica Ltd. ANSA Merchant Bank Limited Sagicor Group Jamaica Limited Jamaica Money Market Brokers Limited Supreme Ventures Limited GraceKennedy Limited Jamaica Broilers Group Limited PLIPDECO Limited Cable and Wireless Jamaica*** - LIME National Enterprises Limited Seprod Limited Light Power Holdings Limited Jamaica&Money Market Brokers Limited Desnoes & Geddes Limited Pan-Jamaican Investment Trust CarrerasInvestments Limited Scotia Jamaica Ltd. Caribbean Cement Company Limited Goddard Enterprises Limited LascoDistributors Banks DIH Ltd.Limited Jamaica Producers Group Limited Desnoes & Geddes Limited Caribbean Producers Jamaica Ltd. * Sagicor Investments Jamaica Limited Sagicor Investments Jamaica Limited Republic Bank Guyana Ltd. Hardware & Lumber Limited One Caribbean Media Limited Derrimon Trading Company Limited Unilever Caribbean Limited General Accident Insurance CoJa Guyana Bank for Trade Kingston Wharves Limited & Industry Ltd. Trinidad Cement Limited Limited LascoManufacturing Jamaica Broilers Group Limited Gleaner Company Agostini's Pan-JamaicanLimited Investment Trust Scotia Investments Seprod LimitedJamaica Ltd. RadioJamaicaTobacco Limited Company Ltd. Demerara Berger Paints JamaicaLimited Limited Guardian Media Dolphin Cove Limited Limited Kingston Wharves Proven Investments Jamaica Limited * Insurance Corporation Of B'DOS Limited Mayberry Investments Limited Demerara Distillers Ltd. Jamaican Teas Limited Guardian Holdings Limited Blue Power Group Limited Lasco Manufacturing Limited Palace Amusement Company (1921) Limited Demerara Bank Ltd. Access Financial Services Ltd. Hardware & Lumber Honey Bun (1982) Limited Limited Prestige Holdings Limited Caribbean Cream Limited Lasco Distributors Limited Consolidated Bakeries Jamaica Limited Citizens Guyana ParamountBank Trading (Jamaica)Inc. Limited Salada FoodsVentures Jamaica Limited Limited Supreme Barita Investments Limited Cable & Wireless (Barbados) Limited LascoFinancial Services Limited Proven Investments Jamaica Limited * AMG Packaging & Paper Company Sagicor Financial Corporation KLE Group Limited National Flour Mills Limited Jamaica Stock Exchange Limited General Accident Insurance Co Ja Pulse Investments Limited CargoHandlers Limited
67,257,502 48,941,802 44,453,718 42,356,165 34,140,265 26,522,970 19,075,407 13,921,759 13,601,445 12,732,391 12,241,512 12,089,484 8,255,354 7,753,863 6,990,219 6,816,959 6,810,599 5,255,523 4,479,755 4,232,408 3,659,094 3,188,709 2,106,271 1,914,403 1,783,997 1,608,216 1,502,209 1,453,003 1,393,675 1,226,435 1,044,905 862,474 761,541 701,712 675,708 672,945 642,129 634,434 512,700 467,730 444,468 333,875 295,554 259,912
US$ 000 667,436
62,498 485,678 42,239 441,140 41,513 420,325 38,274 338,794 37,651 263,203 36,897 189,296 31,313 138,154 27,380 134,975 126,351 25,047 121,480 19,793 119,971 17,166 81,923 16,589 76,946 12,020 69,368 11,537 67,649 11,415 67,586 11,136 52,154 10,983 44,455 10,564 42,001 10,484 36,311 10,226 31,643 9,562 20,902 18,998 8,988 17,704 8,973 15,959 8,421 14,907 8,405 14,419 8,313 13,830 7,609 12,171 7,101 10,369 6,353 8,559 6,277 7,557 6,053 6,964 5,672 6,705 5,030 6,678 4,868 6,372 6,296 4,789 5,088 4,542 4,642 4,153 4,411 4,120 3,313
3,303 2,933 3,254 2,579
Kingston Properties Limited Eppley Limited
157,489 91,470 65,292
MontegoBay Ice Co. Limited
17,979
178
1,874
19
49
C2WMusic Limited *
50
Ciboney Group Limited T otal I october * Quoted in United States Dollars US$2014
0 $ 4 26, 4 09, 302
1,563 908 648
0 $ 4 , 231, 510
T H E C ARIBBEAN RE G ION
Caribbean Business Leaders Country Report Guyana’s Growth Critically Dependent On Price And Production Of Gold “Economic growth in Guyana was 3.9% for the half year ending June, 2013. The projected growth for the full year may be in the vicinity of 4.5% to 4.8%. Guyana’s growth is critically dependent on the price and production of gold. The plunge in international gold market had a unfavourable effect on Guyana’s economy in the first six months of 2013. The agricultural sector, particularly rice, recorded significant improvement. The sugar industry is facing technical, financial and management problems. Hopefully, the Government will work out a long term plan for the revival of the sugar industry.
Yesu Persaud,
Chairman Demerara Bank Limited
The Guyana economy has been one of the most resilient in the Caribbean Region during the global financial crisis and economic recession. In 2012, only Guyana and Belize had a GDP growth of above 4% in the Caribbean. The outlook of Guyana’s economy appears favourable, providing the politicians come together for better economic management. The global financial market outlook on Guyana will be negative if the Government fails to pass the Anti-Money Laundering/Countering the Financing of Terrorism Act.”
The liquidity position remained easy during 2012 and 2013. Banks have increased lending to the housing, retail and services sectors in 2013.
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T H E C ARIBBEAN RE G ION
TOP 10 Guyana Public Companies
2014 Businessuite Top 10 Guyana Public Companies
Ranked by 2013 US$ Revenue
48
Businessuite Top 100 Caribbean Companies
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T H E C ARIBBEAN RE G ION
TOP 10 Guyana Public Companies
2014 Businessuite Top 10 Guyana Public Companies
Ranked by 2013 US$ Profit After Tax
Rank 2014 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
COMPANY Banks DIH Ltd. Republic Bank Guyana Ltd. Guyana Bank for Trade & Industry Ltd. Demerara Tobacco Company Ltd. Demerara Distillers Ltd. Demerara Bank Ltd. Citizens Bank Guyana Inc. Guyana Stockfeeds Inc. J.P. Santos & Company Ltd. Sterling Products Ltd. Caribbean Container Inc. Humphrey & Company Ltd. City Jewelers and Pawnbrokers Ltd. Property Holdings Inc. Rupununi Development Company Ltd. T otal
Businessuite Top 100 Caribbean Companies
Pr ofit After T ax G$000 3,421,540 2,354,287 2,178,917 1,850,640 1,569,421 1,294,563 1,003,935 219,527 185,422 180,604 20,088 2,650 1,299 0 (585) $14,282,310
US$000 16,589 11,415 10,564 8,973 7,609 6,277 4,868 1,064 899 876 97 13 6 0 (3) $69,248
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TOP 10 Guyana
Public Companies
2014 Businessuite Top 10 Guyana Public Companies
Ranked by 2013 US$ Capitalization
Rank 2014 1
2 3 4 5 6
Republic Bank Guyana Ltd. Dem er ar a T obacco Com pany Ltd. Guyana Bank for T r ade & Industr y Ltd. Bank s DIH Ltd. Citizens Bank Guyana Inc. Dem er ar a Distiller s Ltd.
7
Dem er ar a Bank Ltd.
10
Car ibbean Container Inc.
8 9
11 12 13 14 15
50
Company
Ster ling Pr oducts Ltd. Guyana Stock feeds Inc. Pr oper ty Holdings Inc. Rupununi Developm ent Com pany Ltd. City Jeweler s and Pawnbr ok er s Ltd. Hum phr ey & Com pany Ltd. J.P. Santos & Com pany Ltd.
Total
Businessuite Top 100 Caribbean Companies
Com pany
Mar k et
No. of
T otal
Shar eholder
Value
Mk t. Cap.
Mk t. Cap.
Assets
E quity
per Shar e
shar es issued
$0 0 0
$0 0 0
G$
000
G'$0 0 0
US'$0 0 0
300,000 23,400 40,000 1,000,000 59,491 770,000 450,000 15,271 80,286 150,917 100000 368 28 267 19,004
37,500,000 25,737,660 24,000,000 20,000,000 19,334,575 14,322,000 13,500,000 1,985,230 1,605,720 1,509,170 820,000 184,000 -
132,535,496 1,539,231 95,387,906 67,451,691 40,685,497 28,726,954 49,766,631 3,084,853 2,501,543 2,237,350 N/A 94,257 21,766 74,244 2,204,289
12,179,453 636,312 10,173,681 23,833,252 5,625,315 16,058,647 6,492,754 2,439,221 1,931,965 2,045,376 N/A 77,197 16,147 67,034 1,465,244
I
125.0 1,099.9 600.0 20.0 325.0 18.6 30.0 130.0 20.0 10.0 8.2 500.0 -
october 2014
$160,498,355
181,818 124,789 116,364 96,970 93,743 69,440 65,455 9,625 7,785 7,317 3,976 892 0 0 0
$778,174
The Businessuite Magazine
Top 40
Caribbean Public Companies By US$ Capitalization
Businessuite Top 100 Caribbean Companies
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T H E C ARIBBEAN RE G ION
TOPCaribbean 40 Companies The Businessuite Magazine Top
R ank 2014 1
11 2 12 3 134 145
6 15 7
16 8
100 Caribbean
17 9 1810
Public
1912 2013
Companies
2114
11
2215
16
The top 40 By US$ Capitalization
2317 2418 2519 2620 21
2722 2823 2924 25 30 26
3127 3228 3329 30 34 31 3532 3633 3734 35 38
36
3937 4038
4139 40 42 41 4342 4443 4544 45
4646 4747 4848
4949 5050 52
Businessuite Top 100 Caribbean Companies
T otal R evenue T otal R eve C OMP ANY GraceKennedy Limited
Guardian Holdings Limited National Commercial Bank Jamaica Ltd. National Commercial Bank Jamaica Ltd. Scotia Group Jamaica Ltd. Sagicor Group JamaicaLimited Limited Angostura Holdings Supreme Ventures Limited Sagicor Group Jamaica Limited Jamaica Broilers Group Limited Cable & W ireless (Barbados) Limited Cable and Wireless Jamaica - LIME Unilever Caribbean Limited Seprod Limited Limited Jamaica Brokers Light & Money Power Market Holdings Limited Desnoes & Geddes Limited One Caribbean Media Limited Carreras Limited Goddard Enterprises Limited Caribbean Cement Company Limited Gracekennedy Ltd.Limited LascoDistributors Jamaica Producers Carreras Limited Group Limited Caribbean Producers Jamaica Ltd. * Sagicor Financial Corporation Sagicor Investments Jamaica Limited Agostini's HardwareLimited & Lumber Limited Desnoes & Trading GeddesCompany Limited Derrimon General Accident Insurance CoJa Guardian Media Limited Kingston Wharves Limited Jamaica Money Market Brokers Ltd LascoManufacturing Limited Pan-Jamaican Investment T rust Gleaner Company Pan-Jamaican Investment Trust Scotia Investments Jamaica Scotia Investments Jamaica Banks Holdings Limited Ltd. RadioJamaica Limited Prestige Holdings Limited Berger Paints Jamaica Limited Sagicor Real Estate X Fund Dolphin Cove Limited ProvenInvestments Investments Jamaica Limited * Sagicor Jamaica Limited Mayberry Investments Limited Kingston W harves Jamaican Teas Limited T rinidad Cement Limited Blue Power Group Limited Supreme VenturesCompany (1921) Limited Palace Amusement Access Broilers Financial Services Jamaica GroupLtd. HoneyLimited Bun (1982) Limited Seprod Caribbean Cream Limited Insurance Corporation Of B'DOS Limited Consolidated Bakeries Jamaica Limited Lasco Manufacturing LimitedLimited Paramount Trading (Jamaica) Salada Foods JamaicaLimited Limited Lasco Distributors Barita Investments Limited Readymix (W est Indies) Limited LascoFinancial Services Limited Proven Limited AMGInvestments Packaging & Paper Company Jamaica Producers Group KLE Group Limited JamaicaCove Stock Limited E xchange Limited Dolphin Pulse Investments Limited Access Financial Services Limited CargoHandlers Limited Caribbean KingstonCement PropertiesCo. Limited Caribbean Producers Ja Ltd E ppley Limited Montego Bayireless Ice Co.Jamaica Limited - LIME Cable and W C2W Music Limited * Cave Shepherd & Company Limited Ciboney Group Limited Mayberry Investments Ltd. T otal
* Quoted in United States Dollars US$
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october 2014
JA$ 000 67,257,502 48,941,802
505,890,022
US$ 00
667,4 485,6
400,968,295 44,453,718 42,356,165 400,816,823
441,14 420,3
34,140,265
338,7
26,522,970 358,244,813 19,075,407
263,2 189,2
229,821,640 13,921,759 13,601,445 224,012,505
138,1 134,9
12,732,391
126,3 121,4
379,570,174
190,879,789 12,241,512 186,750,928 12,089,484 182,923,581 8,255,354
119,9 81,9
7,753,863 173,952,946
76,9
171,912,658 6,816,959 162,488,097 6,810,599
6,990,219
69,3 67,6
142,173,002 5,255,523 4,479,755 121,540,763
52,1 44,4
1,783,997
17,7
1,453,003 87,668,289
15,9 14,9 14,4
4,232,408 121,356,991 3,659,094 112,149,398 3,188,709 2,106,271 105,704,200 1,914,403 99,245,905
91,522,889 1,608,216 90,073,376 1,502,209 1,393,675 86,007,834 1,226,435 85,621,307 1,044,905 72,755,470 862,474 761,541 53,912,098 701,712 53,807,464 675,708
51,453,795 672,945 50,293,157 642,129
634,434 43,429,200 512,700 41,118,175 467,730
38,343,745 444,468 35,263,036 333,875 295,554 32,789,819 259,912 32,689,472 157,489
29,562,152 91,470 29,473,057 65,292
67,5
42,0 36, 31,6 20,9 18,9
13,8 12, 10,3 8,5 7,5 6,9
6,7 6, 6,3 6,2 5, 4,6 4,4 3,3 2,9 2,5
1,5
6
17,979 26,702,296 1,874 25,089,637
23,839,4220
$ 4 26, 4 09, 302
$ 4 , 231,
TRENDS & DEVELOPMENTS
In The Pursuit Of Opportunities Outside Caricom As The Future for Caricom Companies is Outside of Caricom
C
aricom as a place for doing business is increasingly becoming challenging. The prospects for real growth for the bigger companies is dwindling. Not with standing these challenges Caribbean business leaders have refused to give up and throw in the towel. Instead they are pushing back. Hon. Michael Lee-Chin OJ Chairman, of Businessuite #8 Caribbean Ranked, National Commercial Bank Jamaica characterised the situation as follows in his 2013 report to shareholders. “As has been the case in the past, we have refused to let the headwinds that confronted us
during the past year curb our enthusiasm or optimism for the future. We have risen to the challenge, producing strong growth in our core business segments as was reflected in increases in our loan and funding portfolios.” Going through the 2013 annual reports for companies on the Businessuite Top 100 we are increasingly seeing a trend among Caribbean business leaders. They are focusing their company’s resources on strengthening their home markets as a launch pad for growing their international footprint. They are specifically targeting such markets as the USA, Canada, South and Central
Businessuite Top 100 Caribbean Companies
America, the United Kingdom and new markets in Western Africa and Continental Europe. Goddard Enterprises Limited, Businessuite #7 Caribbean Ranked Company for example already has an extensive network of businesses operating throughout the Caribbean and Central and South America. Multinationals with the ability to execute based on the strength of their capital base, extensive human resources, physical infrastructure supported by the global strength of head office have for many years operated and dominated
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TRENDS & DEVELOPMENTS in the Caribbean. Caribbean Business leaders are now pushing back seeking to compete with these multinationals on their home turf. In an interview earlier this year with the Trinidad Guardian Newspaper, Massy’s Group CEO Gervase Warner commenting on the company major rebranding said the process of arriving at the decision began in 2011, when the group did two things that led to the rebranding: First, it crafted a new vision statement that stated that it would be “a force for good: the most responsible and profitable investment holding/ management company in the Caribbean Basin.” That vision statement he said set the company an aspiration for growth that was beyond the shores of the Englishspeaking Caricom countries to the region’s Latin American neighbours. In the same article Warner highlighted that the Massy Group currently generates 75% of its profits from the Trinidad economy. Clearly making the case for the Group to reduce its dependence on the Trinidad market and as he said go beyond the shores of the English-speaking Caricom to the regions of Latin America for growth and profit diversification. Arthur Lok Jack Chairman of Businessuite #1 Caribbean Ranked Company for 2014, The Massy Group, made the following comment
54
in his 2013 report to shareholders. “The Group continues to approach business in CARICOM with cautious optimism, giving due consideration to opportunities outside our traditional markets. To extend our Automotive and Information, Technology & Communication portfolios, we are pursuing investments in Central and South America. We have appointed a Country Manager for Suriname who has started exploring opportunities there, particularly in the energy sector.” Hon. Gordon V. Shirley, OJ Chairman of Businessuite #4 Caribbean Ranked Company GraceKennedy Limited in his report to shareholders remarked “We are excited about 2014 and launched the year under the theme “Investing for Growth, Delivering on our Promise.” We are focused on the growth of our international business, strengthening and maintaining our domestic businesses, improved efficiency and better capital management.” Ronald F. deC. Harford Chairman Businessuite #5 Caribbean Ranked Company, Republic Bank Group Limited reported to his shareholders that they have formed a partnership with HFC Bank (Ghana) Limited in Ghana, West Africa, and during the last year built up a 40% shareholding. “We are excited about this opportunity to work with HFC Bank (Ghana) Limited as we seek to build a strong portfolio of business in the
Businessuite Top 100 Caribbean Companies
I
African continent.” Mr. R. Geoffrey Cave, Chairman Businessuite #76 Caribbean Ranked Company, Cave Shepherd and Company Limited in his report to shareholders indicated that “As is well documented, economic conditions in Barbados and the other neighbouring territories in which we operate are very difficult, and we do not expect to see any rapid improvement in their fortunes. Indeed there is likely to be increased pressure on those businesses that rely on the domestic market.” The stark reality is that for companies in the top tier of the Businessuite Top 100 to generate real US dollar growth each year they are not going to find it in Caricom. Such growth can however easily be found and secured in the markets to the north and west, Europe and of course Africa. Charles Herbert, Chairman the Goddard Group Businessuite #7 Caribbean Ranked Company said it well “As we look forward to 2014, we recognize that we will continue to operate in an uncertain economic environment but take the view that such uncertainty also presents many opportunities.” It’s very clear however that such opportunity for real growth and expansion lies outside of Caricom.BM
october 2014
T H E C ARIBBEAN RE G ION
Caribbean Business Leaders Country Report
“There are also some positive signs in construction as low interest rates have led to a rise in housing starts (up 219.6%), completions (37.4%) and the volume of mortgages (17.7%). However, downside risks remain, particularly in the Services Industry. Tourism will be affected by the subdued activity in source markets such as the US and Canada, while the Finance and Insurance segment will be affected by the lingering effects of the NDX and the shift to off-balance sheet activity by securities dealers. High unemployment is also a worrying sign and could restrict business and consumer investment and spending plans.” Patrick A. Hylton, CD Group Managing Director National Commercial Bank Jamaica Limited
........................................................................................
Some Positive Signs In Construction
Government Embarked On A Number Of Growth Initiatives Such As The Logistics Hub And Agro Parks Project.
E
arly in 2013, the Government of Jamaica signed a new 4-year Extended Fund Facility (EFF) agreement with the IMF which was supported by other lending agencies. The IMF agreement provided for a number of pre-conditionalities including: • A three-year wage restraint for public sector workers • A new waiver regime • The National Debt Exchange • Various new legislation, Debt Management Act, Fiscal rule, Omnibus Banking Act among other Bills • Various tax reform measures • Implementation of an Economic Programme Oversight Committee (EPOC) These measures have either been implemented or are well on the way to implementation. With the welcome success of the National Debt Exchange october 2014
I
in February and March 2013, interest costs for central government have been significantly lowered and financing pressures have been relieved by pushing out debt maturities by several years. The resulting substantial reduction in Government’s appetite for debt will channel more resources to private sector direct investment an important stimulus for economic growth. The new economic programme aimed to avert near-term fiscal deficiencies while creating the conditions for sustained growth and to provide a framework for critical steps and policy reforms to significantly enhance fiscal and debt sustainability and meaningful economic growth. Throughout 2013, EPOC monitored monthly performance and the IMF performed quarterly tests. Policy implementation and structural reforms progressed well and key quantitative
Businessuite Top 100 Caribbean Companies
55
T H E C ARIBBEAN RE G ION
economic indicators either met or surpassed budget. These include: • The primary balance of central government • Tax revenues • The balance of the public sector • Net international reserves The Government also embarked on a number of growth initiatives such as the Logistics Hub and Agro Parks project. On September 24th, Standard & Poor’s upgraded the long-term foreign and local currency rating of Jamaica debt from CCC+ to B-. The September quarter also showed GDP growth, albeit modest, of 0.8%, the first after six quarters of decline. The debtto-GDP ratio is moving down and some measures to reform the tax system and efficiency of the public sector are taking shape. However, while the IMF programme was being managed well, other challenges needed attention. There was tight Jamaican dollar liquidity, since the NDX programme, which restrained banks from extending credit. In addition, since August 2013, tax revenue consistently under-performed budget. By December the J$ declined 14% against the US$. Unemployment was at 15.3% and inflation 9.7%. Interest rates remained generally stable. While there was good fiscal reform progress during 2013, the economy remains burdened by high debt with little room to put resources towards economic growth. The underperformance of tax revenues remains a great concern. Much more work is therefore required to achieve the goals of sustained growth, increased employment and improved living standards.
www.blackslateholdings.com
Richard O. Byles President & CEO: Sagicor Group Jamaica Limited
56
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4. Maintaining our VLT market share in challenging economic conditions 5. Growing our Sports Betting business, which continued to be hindered by the delay in the implementation of Government’s Sports Betting Regulations?
Domestic Market Proved The Most Challenging “The domestic market proved to be the most challenging due to an accelerated devaluation of the Jamaican currency which resulted in increased costs in raw and packaging materials. These increases were exacerbated by the rise in fuel and related transportation costs. Our consumers were also negatively impacted by these factors leading to a decline in their disposable income and therefore changes in their purchasing decisions. Our value brand, ‘Caribbean Choice’, developed and positioned to meet this changing demand, grew significantly over prior year. Our domestic business grew by 6% during the year. Higher production costs resulted from the rapid devaluation of the Jamaican currency and costs associated with energy. GraceKennedy has embarked on an energy project in collaboration with The University of the West Indies with the objective of reducing these costs. Our conservation efforts resulted in Dairy Industries being given the JPS award by the Jamaica Manufacturing Association for best use of energy for the second year in a row.”
Challenges Faced In 2013 Materially Impacted Financial Results The challenges faced in 2013 which materially impacted the financial results included: 1. Coping with an increased tax burden imposed by the Government, that came into effect in March 2013 2. Managing our exposure to changes in Cash Pot prize liabilities 3. Managing our foreign currency risk exposure, given the rapid devaluation of the Jamaican dollar
Donald G. Wehby Group Chief Executive Officer GraceKennedy Limited
The lottery line of business performed well, in a market where disposable income was greatly limited by the implementation of additional tax measures by the Government in March 2013. These measures included increases in gaming taxes, BGLC fees, and a change in the structure for Good Causes Fees (CHASE) from lottery sales. In addition, the fifty percent (50%) share of unclaimed prizes that was previously retained by the company was required to be paid over to the BGLC. Previously, the Company’s share of unclaimed prizes was utilized for prize promotions, sponsorships and donation programmes. Additional tax measures introduced were: An increase in education taxes and stamp duty, tax on dividends, as well as new and increased taxes relating to workers in the VLT gaming lounges and lottery agents. Brian George President & CEO Supreme Ventures Limited
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TOP 10 Jamaica
T H E C ARIBBEAN RE G ION
Public Companies
R ank 2014
2014 Businessuite Top 10 Jamaica Public Companies
Ranked by 2013 US$ Revenue
T otal R evenue T otal R evenue COMP ANY
1
GraceKennedy Limited
JA$ 000 67,257,502
2 3
National Commercial Bank Jamaica Ltd. Scotia Group Jamaica Ltd.
48,941,802 44,453,718
485,678 441,140
4 5
Sagicor Group Jamaica Limited Supreme Ventures Limited
42,356,165 34,140,265
420,325 338,794
6 7
Jamaica Broilers Group Limited Cable and Wireless Jamaica - LIME
26,522,970 19,075,407
263,203 189,296
8 9 10
Seprod Limited Jamaica Money Market Brokers Limited Desnoes & Geddes Limited
13,921,759 13,601,445 12,732,391
138,154 134,975 126,351
11 12
Carreras Limited Caribbean Cement Company Limited
12,241,512 12,089,484
121,480 119,971
13 14
LascoDistributors Limited Jamaica Producers Group Limited
8,255,354 7,753,863
81,923 76,946
15 16
Caribbean Producers Jamaica Ltd. * Sagicor Investments Jamaica Limited
6,990,219 6,816,959
69,368 67,649
17
Hardware & Lumber Limited
18
Derrimon Trading Company Limited
6,810,599 5,255,523
67,586 52,154
19 20 21 22 23 24 25 26
General Accident Insurance CoJa Kingston Wharves Limited LascoManufacturing Limited Gleaner Company Pan-Jamaican Investment Trust Scotia Investments Jamaica Ltd. RadioJamaica Limited Berger Paints Jamaica Limited
4,479,755 4,232,408 3,659,094 3,188,709 2,106,271 1,914,403 1,783,997
44,455 42,001 36,311 31,643 20,902 18,998 17,704
27 28 29 30 31 32
Dolphin Cove Limited Proven Investments Jamaica Limited * Mayberry Investments Limited Jamaican Teas Limited Blue Power Group Limited Palace Amusement Company (1921) Limited
1,608,216 1,502,209 1,453,003 1,393,675 1,226,435 1,044,905 862,474
15,959 14,907 14,419 13,830 12,171 10,369 8,559
33 34 35
Access Financial Services Ltd. Honey Bun (1982) Limited Caribbean Cream Limited
761,541 701,712 675,708
7,557 6,964
36
Consolidated Bakeries Jamaica Limited
672,945
Businessuite Top 100 Caribbean Companies
6,705 6,678
37
Paramount Trading (Jamaica) Limited
642,129
6,372
38 39 40
Salada Foods Jamaica Limited Barita Investments Limited LascoFinancial Services Limited
634,434 512,700 467,730
6,296 5,088 4,642
41 42 43
AMG Packaging & Paper Company KLE Group Limited Jamaica Stock Exchange Limited
444,468 333,875 295,554
4,411 3,313 2,933
44 45
Pulse Investments Limited CargoHandlers Limited
259,912
2,579
157,489
1,563
46 47
Kingston Properties Limited Eppley Limited
91,470 65,292
908 648
48
MontegoBay Ice Co. Limited
17,979
178
49
C2WMusic Limited *
1,874
19
50
Ciboney Group Limited T otal * Quoted in United States Dollars US$
58
US$ 000 667,436
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0 $ 4 26, 4 09, 302
0 $ 4 , 231, 510
R ank 2014 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
COMPA NY Scotia Group Jamaica Ltd. N ational Commercial Bank Jamaica Ltd. Carreras Limited Sagicor Group Jamaica Limited Jamaica Money Market Brokers Limited GraceKennedy Limited Pan-Jamaican Investment Trust Scotia Investments Jamaica Ltd. Desnoes & Geddes Limited Sagicor Investments Jamaica Limited Jamaica Broilers Group Limited Seprod Limited Kingston Wharves Limited Lasco Manufacturing Limited Hardware & Lumber Limited Lasco Distributors Limited Supreme Ventures Limited Proven Investments Jamaica Limited * General Accident Insurance Co Ja Dolphin Cove Limited Caribbean Producers Jamaica Ltd. * Access Financial Services Ltd. Jamaica Producers Group Limited Lasco Financial Services Limited Pulse Investments Limited Caribbean Cement Company Limited Blue Power Group Limited Mayberry Investments Limited Jamaican Teas Limited Salada Foods Jamaica Limited Gleaner Company Cargo Handlers Limited Paramount Trading (Jamaica) Limited Barita Investments Limited Kingston Properties Limited Derrimon Trading Company Limited AMG Packaging & Paper Company E ppley Limited Honey Bun (1982) Limited Berger Paints Jamaica Limited Consolidated Bakeries Jamaica Limited Palace Amusement Company (1921) Limited Caribbean Cream Limited Montego Bay Ice Co. Limited Jamaica Stock E xchange Limited Ciboney Group Limited Radio Jamaica Limited KLE Group Limited C2W Music Limited * LIME T otal
JA $000 Pr ofit A fter T ax
11,517,195 8,549,831 6,538,244 6,297,935 3,856,863 3,794,064 2,524,025 1,994,535 1,211,244 1,162,613 1,030,477 905,753 846,974 640,220 609,963 506,833 482,569 418,498 327,914 322,060 321,759 270,112 269,960 163,899 127,899 113,921 103,980 102,343 93,593 90,486 85,842 84,947 73,348 70,278 52,496 49,927 49,432 38,985 35,317 34,083 33,115 13,950 13,941 8,695 7,190 (3,204) (36,375) (55,866) (62,483) (4,919,134)
TOP 10 Jamaica
US$000 Pr ofit A fter T ax
114,292 84,845 64,883 62,498 38,274 37,651 25,047 19,793 12,020 11,537 10,226 8,988 8,405 6,353 6,053 5,030 4,789 4,153 3,254 3,196 3,193 2,680 2,679 1,626 1,269 1,131 1,032 1,016 929 898 852 843 728 697 521 495 491 387 350 338 329 138 138 86 71 (32) (361) (554) (620) (48,815)
$50,770,246
Public Companies
2014 Businessuite Top 10 Jamaica Public Companies
Ranked by 2013 US$ Profit After Tax
$503,823
* Quoted in United States Dollars US$
Businessuite Top 100 Caribbean Companies
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TOP 10 Jamaica Public Companies
Rank 2014
2014
1
Businessuite
4
Top 10 Jamaica
2 3 5 6 7 8
Public Companies
9 10 11 12 13 14 15 16
Ranked by 2013 US$ Capitalization
17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53
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Issued Shares
C ompany Scotia Group Jamaica National Commercial BankJamaica Ltd. Sagicor Group Jamaica Limited* Gracekennedy Ltd. Carreras Limited Desnoes & Geddes Jamaica Money Market Brokers Ltd Pan-Jamaican Investment Trust Scotia Investments Jamaica Sagicor Real E state X Fund* Sagicor Investments Jamaica Limited Kingston Wharves Supreme Ventures Jamaica Broilers Group Seprod Limited Lasco Manufacturing Limited Lasco Distributors Limited Proven Investments Limited Jamaica Producers Group Dolphin Cove Limited Access Financial Services Limited Caribbean Cement Co. Caribbean Producers Ja Ltd Cable and Wireless Jamaica - LIME Mayberry Investments Ltd. General Accident Insurance Co Ltd Lasco Financial Services Limited Gleaner Company Barita Investments Salada Foods Jamaica Derrimon Trading Company Ltd Jamaican Teas Limited Medical Disposables & Supplies Ltd Blue Power Group Limited Cargo Handlers Limited Paramount Trading (Jamaica) Ltd Hardware & Lumber Radio Jamaica Berger Paints Ltd AMG Packaging & Paper Co Ltd Caribbean Cream Limited Kingston Properties Limited E ppley Limited Honey Bun (1982) Limited Consolidated Bakeries (Jamaica) Ltd Jamaica StockE xchange Ltd Pulse Invesments Ltd. Caribbean Flavours & Fragrances Ltd Palace Amusement C2W Music Limited Montego Bay Ice KLE Group Limited Ciboney Group Ltd T otal
Businessuite Top 100 Caribbean Companies
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3,111,572,984 2,466,762,828 3,760,991,782 334,723,248 485,440,000 2,809,171,264 1,630,552,530 213,231,978 423,194,765 1,495,336,750 552,145,844 1,430,199,578 2,637,254,926 1,199,276,400 516,397,918 4,087,130,170 3,366,431,150 294,951,884 187,024,006 392,426,376 274,509,840 851,136,591 1,100,000,000 16,817,439,741 1,201,149,291 1,031,250,000 1,228,102,990 1,211,243,827 445,001,824 103,883,290 273,336,067 168,708,365 263,157,895 56,499,000 41,625,000 154,246,708 80,842,023 357,476,991 214,322,393 102,378,857 378,568,115 68,800,102 796,249 94,253,390 222,709,171 140,250,000 271,789,674 89,920,033 1,437,028 400,000,000 6,161,510 100,000,000 546,000,000
october 2014
Price 20.15 16.38 10.17 55.07 36.11 5.10 7.50 53.00 25.17 6.07 16.00 6.06 2.78 4.53 10.50 1.24 1.30 0.1300 19.00 8.42 12.00 3.50 2.70 0.16 2.00 1.63 1.28 1.10 2.50 8.10 2.49 4.00 2.20 10.00 13.50 3.55 6.10 1.30 1.75 3.48 0.89 4.50 380.00 3.19 1.16 1.80 0.87 2.60 95.00 0.29 17.95 1.10 0.05
JS$ Market C apitalisation
US$ Market C apitalisation
62,698,195,628 40,405,575,123 38,249,286,423 18,433,209,267 17,529,238,400 14,326,773,446 12,229,143,975 11,301,294,834 10,651,812,235 9,076,694,073 8,834,333,504 8,667,009,443 7,331,568,694 5,432,722,092 5,422,178,139 5,068,041,411 4,376,360,495 38,343,745 3,553,456,114 3,304,230,086 3,294,118,080 2,978,978,069 2,970,000,000 2,690,790,359 2,402,298,582 1,680,937,500 1,571,971,827 1,332,368,210 1,112,504,560 841,454,649 680,606,807 674,833,460 578,947,369 564,990,000 561,937,500 547,575,813 493,136,340 464,720,088 375,064,188 356,278,422 336,925,622 309,600,459 302,574,620 300,668,314 258,342,638 252,450,000 236,457,016 233,792,086 136,517,660 116,000,000 110,599,105 110,000,000 27,300,000 $315,834,206,469
622,191,085 400,968,295 379,570,174 182,923,581 173,952,946 142,173,002 121,356,991 112,149,398 105,704,200 90,073,376 87,668,289 86,007,834 72,755,470 53,912,098 53,807,464 50,293,157 43,429,200 38,343,745 35,263,036 32,789,819 32,689,472 29,562,152 29,473,057 26,702,296 23,839,422 16,680,932 15,599,601 13,221,874 11,040,037 8,350,250 6,754,062 6,696,769 5,745,235 5,606,728 5,576,436 5,433,917 4,893,682 4,611,691 3,721,983 3,535,560 3,343,511 3,072,348 3,002,626 2,983,709 2,563,686 2,505,210 2,346,502 2,320,056 1,354,745 1,151,136 1,097,540 1,091,595 270,914 $3,172,171,895
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The Businessuite Magazine
Top 40
Caribbean Public Companies by Revenue
63
Caribbean Companies october 2014 I Businessuite Top 100
I october 2014 Businessuite Top 100 Caribbean Companies
63
TOPCaribbean 40 Companies
R ank 2014
The Businessuite Magazine Top 100 Caribbean Public Companies
The Top 40 By US$ Revenue
111 2 12 3 13 4 145 156 167 178 9 18 10 19 11 20 12 21 13 14 22 15 23 16 24 17 25 18 26 19 27 20 28 21 22 29 23 30 24 31 25 32 26 33 27 34 28 29 35 30 36 31 37 32 38 33 39 34 40 35 36 41 37 42 38 43 39 44 40 45 41 46 42 47 43 44 48 45 49 46 50 47 48 49 50
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Businessuite Top 100 Caribbean Companies
T otal R evenue T otal R e C OMP ANY GraceKennedy Limited
Supreme Ventures Limited National Commercial Bank Jamaica Ltd. Light & Power Holdings Limited Scotia Group Jamaica Ltd. Trinidad Cement Limited Sagicor Group Jamaica Limited Jamaica Broilers Group Supreme Ventures LimitedLimited Jamaica Broilers Group Limited First Citizens Group Limited Cable andHoldings Wireless Jamaica - LIME Guardian Limited Seprod Limited Scotiabank Trinidad & Tobago Limited Jamaica Money Market Brokers Limited Agostini's Limited Desnoes & Geddes Limited Cable andLimited Wireless Jamaica - LIME Carreras Cable & Wireless Limited Caribbean Cement(Barbados) Company Limited Lasco Distributors Limited Company Limited The West Indian Tobacco Jamaica Producers Group Limited Prestige Holdings Limited Caribbean Producers Jamaica Ltd. * Seprod Limited Sagicor Investments Jamaica Limited Jamaica Money Market Brokers Limited Hardware & Lumber Limited Banks DIHTrading Ltd. Company Limited Derrimon Desnoes & Geddes Limited General Accident Insurance CoJa Kingston W harves Limited Carreras Limited LascoManufacturing Limited Limited Caribbean Cement Company Gleaner Company Angostura Holdings Limited Pan-Jamaican Investment Trust Banks Holdings Limited Scotia Investments Jamaica Ltd. Unilever Caribbean RadioJamaica Limited Limited Demerara Distillers Ltd. Berger Paints Jamaica Limited One Caribbean Media Limited Dolphin Cove Limited Proven Investments Jamaica Limited * Lasco Distributors Limited Mayberry Investments Limited Jamaica Producers Group Limited Jamaican Teas Limited National Flour Mills Limited Blue Power Group Limited National Enterprises Limited Palace Amusement Company (1921) Limited Caribbean Producers Ltd. * Access Financial Services Jamaica Ltd. Sagicor Jamaica Limited Honey Investments Bun (1982) Limited Caribbean& Cream Limited Hardware Lumber Limited Consolidated Bakeries Jamaica LimitedLimited Insurance Corporation Of B'DOS Paramount Trading (Jamaica) Limited Derrimon Trading Company Limited Salada Foods Jamaica Limited ANSA Merchant Bank Limited Barita Investments Limited General Accident Insurance LascoFinancial Services LimitedCo Ja Kingston Wharves Limited AMG Packaging & Paper Company KLE GroupLimited Limited PLIPDECO Jamaica Stock xchange Limited Republic BankEGuyana Ltd. Pulse Investments Limited Guyana Stockfeeds Inc. CargoHandlers Limited
Lasco Manufacturing Limited Kingston Properties Limited Demerara Tobacco Company Ltd. E ppley Limited MontegoBay Ice Co. Limited
C2WMusic Limited *
Ciboney Group Limited T otal I in United october 2014 US$ * Quoted States Dollars
JA$ 000 67,257,502 338,794 48,941,802
315,390
US$ 0
66 48
44,453,718 302,457 42,356,165
441 420
263,203 34,140,265
33
13,921,759 216,424 13,601,445
13 134
173,949 12,089,484 8,255,354 147,219
11 8
26,522,970 254,576 19,075,407 223,958
26 189
12,732,391 189,296 12,241,512
12 12
212,386
7,753,863 140,577
6,990,219 138,154 6,816,959
134,975
6,810,599 128,470 5,255,523 126,351 4,479,755
4,232,408 121,480 3,659,094 119,971 3,188,709 103,345 2,106,271 90,405 1,914,403
90,279 1,783,997
86,876 1,608,216 85,969 1,502,209 1,453,003 81,923 1,393,675 76,946 1,226,435 71,350 1,044,905 69,537 862,474 69,368 761,541 67,649 701,712 675,708 67,586 672,945 56,302 642,129 52,154 634,434 45,527 512,700 44,455 467,730 42,001 444,468 333,875 41,190 295,554 40,893 259,912
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6 6
6 5 44
4 3 3 2 1
1
15 14 14 1 1 10
6
4
39,158 157,489
36,311 91,470 34,825 65,292 17,979
1,874
0 $ 4 26, 4 09, 302
$ 4 , 23
T H E C ARIBBEAN RE G ION
Caribbean Business Leaders Country Report
Non Energy Sector Continued To Show Positive Momentum On Track To Achieve Growth Of 1.5% “In 2013, the Trinidad and Tobago economy emerged from negative growth and is on track to achieve growth of 1.5%. This performance was achieved however, against the backdrop of record low interest rates and high levels of excess liquidity in the banking system, which could have potential long-term inflationary effects.” Sylvia D. Chrominska Chairperson Scotiabank Trinidad and Tobago Limited
“Overall, for the second quarter of 2013, GDP grew 2.1% (year-on-year) compared to 1.6% recorded in the previous quarter. The country’s non energy sector continued to show positive momentum, recording yet another quarter of expansion during the second quarter of 2013. This is the ninth consecutive quarter of expansion. Year-on-year, the nonenergy sector grew 2.4% in the second quarter of 2013–the same rate as the previous three months. The top three best performing sectors were finance (+5.3%), manufacturing (+3.8%) and construction (+3.5%). The energy sector posted growth of 1.6% in the second quarter of 2013, even as the petrochemicals subsector recorded a significant contraction of 9.3%. The Ministry of Finance and the Economy estimated that GDP would expand at a rate of 1.6% for the full year 2013, supported by the nonenergy sector. This projection is in line with the International Monetary Fund
Businessuite Top 100 Caribbean Companies
(IMF), which also forecast growth of 1.6% in 2013, with projected expansion by 2.3% in 2014. The performance is likely to be driven by the non-energy sector, particularly in the construction, finance and distribution sectors. Inflation for the 12 months to October 2013 decelerated to 2.7% from 3% in September, mainly due to the slowdown in core inflation which stood at 1.9% in October from 2.9% in September. As at the end of March 2013, the country’s total public sector debt stood at 54.3% of GDP–a decline from the 57% of GDP recorded at the end of September 2012. Contingent liabilities represented 17.4% of GDP at the end of March 2013, while external debt of central government was at a stable 6.3% of GDP.” Nyree D. Alfonso Chairperson First Citizens Group
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T H E C ARIBBEAN RE G ION
Growth In The Economy Depends On Developments In Both The Energy And Non-Energy Sectors “According to the Ministry of Finance, Trinidad and Tobago’s economy is projected to grow by 1.6% in 2013 after it expanded by 0.2% in 2012. The petroleum sector is projected to grow by 0.5% after declining by 1% in 2012. Oil output averaged 80,737 barrels per day (bpd) for the first seven months of the year, down from 82,991 bpd for the same period in 2012. The US Energy Information Administration forecasts oil prices to average US$98.59 per barrel this year compared with US$94.12 in 2012. Natural gas production averaged 4.3 billion cubic feet per day during the first seven months of 2013, higher than the 4.2 billion cubic feet per day for the same period in 2012. Natural gas prices have increased and are expected to average US$3.79 per MCF for the year, up from US$2.83 in 2012. Although prices have increased from 2012, output is predicted to fall for the rest of the year as the country’s two largest natural gas producers are planning significant maintenance activity. The non-energy sector is projected to drive growth in the economy in 2013, based on an estimated 2.5% expansion of the services sector supported by expected growth in finance (5.3%),
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distribution and restaurants (1.2%) and electricity and water (3.0%). Construction and quarrying, is expected to expand by 3.0%, a strong recovery after recording four consecutive quarters of decline. The manufacturing sector is projected to grow by 6.1% during 2013, marking a turnaround on the estimated 0.4% contraction recorded during 2012. The agriculture sector is expected to register a strong performance in 2013 with growth of 5.1%. This follows on contractions of 0.1% and 4.9% in 2011 and 2012 respectively. For the year thus far, inflation reached a high of 7.3% in January and moderated in the second quarter. In August 2013 headline inflation rose to 5.1%, after slowing to 3.8% in July due to a rise in food inflation, which increased to 7.7% in August 2013 from a low of 4.8% in the previous month. Lower global food prices and favourable weather conditions contributed to the slight slowing in food inflation in the first half of 2013. With overall inflation at manageable levels, the Central Bank held the “Repo” rate at 2.75% in its September 27 media release. In this environment, commercial banks’ basic prime lending rate remained at 7.5%.
Businessuite Top 100 Caribbean Companies
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Despite low interest rates, private sector credit grew by only 2.5% in the nine-month period from October 2012 to June 2013. Credit to consumers and the public sector, on the other hand, increased by 7.3% and 13.8%, respectively. Going forward, growth in the economy depends on developments in both the energy and non-energy sectors. Oil prices are expected to remain fairly stable for the rest of 2013. Non-energy output is likely to increase. Distribution is expected to increase in the fourth quarter of 2013, due to seasonal factors, while construction activity is also expected to gain momentum. The Government’s stated top priority going forward is to sustain growth and generate prosperity. Trinidad and Tobago’s economy is expected to grow by 2-3% in 2014 with stronger performances expected by both the energy and non energy sectors. Ronald F. deC. Harford Chairman Republic Bank Limited
october 2014
TOP 10 trinidad Public Companies
2014 Businessuite Top 10 Trinidad and Tobago Public Companies -
Ranked by 2013 US$ Revenue
R ank 2014
T otal R evenue T T $'000 3,437,265 9,391,521 1,633,764 1,388,922 6,217,660
T otal R evenue U S$'000 535,600 1,463,401 254,576 216,424 968,845
5
C OMPAN Y Republic Bank Limited Neal & Massy Holdings Limited First Citizens Group Limited Scotiabank Trinidad & Tobago Limited ANSA Mc Al Limited
6
National Enterprises Limited
446,263
69,537
7
The West Indian Tobacco Company Limited
944,790
147,219
8
Angostura Holdings Limited
663,227
103,345
9
Guardian Holdings Limited
1,437,270
223,958
10
PLIPDECO Limited
264,339
41,190
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21
ANSA Merchant Bank Limited Trinidad Cement Limited Agostini's Limited One Caribbean Media Limited Unilever Caribbean Limited Guardian Media Limited Prestige Holdings Limited National Flour Mills Limited LJ Williams Limited Readymix (West Indies) Limited Berger Paints Trinidad Limited
292,176 1,941,049 1,363,011 551,713 579,372 58,849 902,167 457,897 102,642 175,580 64,146
45,527 302,457 212,386 85,969 90,279 9,170 140,577 71,350 15,994 27,359 9,995
22
Flavorite Foods Limited
163,360
25,455
$32,476,983
$5,060,612
1
2 3 4
12 13 14 15 16 17 18 19 20
T otal
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TOP 10 Trinidad Public Companies
2014 Businessuite Top 10 Trinidad and Tobago Public Companies -
Ranked by 2013 US$ Profit After Tax
R ank 2014 1
C OMPAN Y
Pr ofit After T ax U S$'000 188,630 136,281 130,482 95,132 94,512
2
Republic Bank Limited ANSA Mc Al Limited
3 4
BergerPaints Trinidad Limited Neal & Massy Holdings Limited
5
FirstCitizens Bank Limited
6
Scotiabank Trinidad & TobagoLimited
561,195
87,446
7
Angostura Holdings Limited
411,071
64,054
8
The WestIndian TobaccoCompany Limited
271,076
42,239
9
ANSA MerchantBank Limited
266,414
41,513
10
PLIPDECO Limited
236,788
36,897
11
National Enterprises Limited
12
One Caribbean Media Limited
13 14
UnileverCaribbean Limited Trinidad CementLimited
15 16
Agostini's Limited Guardian Media Limited
17 18
Guardian Holdings Limited Prestige Holdings Limited
19 20
National FlourMills Limited LJWilliams Limited
21
Flavorite Foods Limited
200,956 71,467 70,485 67,281 61,368 54,045 45,569 36,400 21,197 13,187 (1,208)
31,313 11,136 10,983 10,484 9,562 8,421 7,101 5,672 3,303 2,055 (188)
22
Readymix (WestIndies) Limited
(1,586)
(247)
$6,525,294
$1,016,781
T otal
68
Pr ofit After T ax T T $'000 1,210,549 874,598 837,384 610,518 606,540
Businessuite Top 100 Caribbean Companies
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october 2014
TOP 10 trinidad Public Companies
2014 Businessuite Top 10 Trinidad and Tobago Public Companies -
Ranked by 2013 US$ Capitalization R ank 2014
Company
I ssuedShare Capital
Capitalization ( TT $)
Financial Year End
Capitalization ( US$)
1 Republic BankLimited 2 ScotiabankTrinidad & Tobago Limited
161,169,865 176,343,750
18,669,917,162 12,793,739,063
30-Sep 31-Oct
2,909,174,327 1,993,539,495
3 ANSA Mc Al Limited 4 National EnterprisesLimited 5 First CitizensBankLimited
176,192,841 600,000,641 251,353,562
11,716,823,927 10,530,011,250 10,116,980,871
31-Dec 31-Mar 30-Sep
1,825,732,973 1,640,802,052 1,576,443,043
6 The West IndianTobacco Company Limited 7 Neal & Massy HoldingsLimited 8 ANSA Merchant BankLimited
84,240,000 96,639,017 85,605,263
10,108,800,000 5,799,307,410 3,304,363,152
31-Dec 30-Sep 31-Dec
1,575,168,287 903,656,727 514,890,793
9 GuardianHoldingsLimited 10 Angostura HoldingsLimited 11 Unilever CaribbeanLimited
231,899,986 206,277,630 26,243,832
3,246,599,804 2,572,282,046 1,474,903,358
31-Dec 31-Dec 31-Dec
505,890,022 400,816,823 229,821,640
12 One CaribbeanMedia Limited 13 Agostini'sLimited 14 GuardianMedia Limited
66,215,683 58,583,349 40,000,000
1,224,990,136 1,042,783,612 780,000,000
31-Dec 30-Sep 31-Dec
190,879,789 162,488,097 121,540,763
15 Prestige HoldingsLimited 16 Trinidad Cement Limited 17 Readymix(West Indies) Limited
62,154,211 249,765,136 12,000,000
587,357,294 549,483,299 263,880,000
30-Nov 31-Dec 31-Dec
91,522,889 85,621,307 41,118,175
18 PLIPDECO Limited 19 National Flour MillsLimited 20 Flavorite FoodsLimited
39,625,684 120,200,000 7,777,660
146,615,031 114,190,000 63,854,589
31-Dec 31-Dec 31-Dec
22,845,773 17,793,256 9,949,917
5,161,444 19,742,074
18,581,198 12,832,348
31-Mar 31-Mar
2,895,350 1,999,556
21 Berger PaintsTrinidad Limited 22 LJ WilliamsLimited Ordinary 'B'
Total
$95,138,295,550
Businessuite Top 100 Caribbean Companies
$14,824,591,054
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The Businessuite Magazine
Top 10
Caribbean Public Companies
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TOP 10 Caribbean Public Companies
The Businessuite Magazine Top 100 Caribbean Public Companies
The Top 10 By US$ Profit After Tax
R ank 2014 1 2 3 4 5 6 7 8 9 10
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COMPANY Republic Bank Limited ANSA Mc Al Limited Berger Paints Trinidad Limited Scotia Group Jamaica Ltd. Neal & Massy Holdings Limited First Citizens Bank Limited Scotiabank Trinidad & Tobago Limited National Commercial Bank Jamaica Ltd. Carreras Limited Angostura Holdings Limited
Businessuite Top 100 Caribbean Companies
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october 2014
US$000 2013 188,630 136,281 130,482 114,292 95,132 94,512 87,446 84,845 64,883 64,054
TOP 10 Caribbean Public Companies The Businessuite Magazine Top 100 Caribbean Public Companies
The Top 10 By US$ Capitalization
Rank 2014 1 2 3 4 5 6 7 8 9 10
US$ Mark et Capitalisation
Company
Republic Bank Limited Fir st C ar ibbean Inter national Limited Scotiabank T r inidad & T obago Limited ANSA Mc Al Limited National Enter pr ises Limited Fir st C itizens Bank Limited T he W est Indian T obacco C ompany Limited Neal & Massy Holdings Limited Scotia Gr oup Jamaica ANSA Mer chant Bank Limited
Businessuite Top 100 Caribbean Companies
2,909,174,327 2,373,606,979 1,993,539,495 1,825,732,973 1,640,802,052 1,576,443,043 1,575,168,287 903,656,727 622,191,085 514,890,793
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TOP 10 Caribbean Public Companies
Businessuite #10 Caribbean Ranked Public Company Sagicor Group Jamaica, Underpinning The Promise To Deliver Benefits To Customers Company Profile: Stock Exchange:
Jamaica
Company: Sagicor Group Jamaica Limited 2014 Rank: #10 Chairman: Dr. R.D. Williams, OJ President & CEO: Richard O. Byles Address: R. Danny Williams Building 28-48 Barbados Avenue, Kingston 5, Jamaica, W.I. Telephone: (876) 929-8920-9 Toll Free: 1-888-SAGICOR Fax No: (876) 929-4730 Email: infoja@sagicor.com Website: www.sagicorjamaica.com
S
agicor Group Jamaica Limited (SGJ or the Group), formerly Sagicor Life Group of companies, is a leading financial services group in Jamaica, commanding the largest market share in many of the lines of business it operates.
In December 2013, Sagicor Life Jamaica Limited (Sagicor Life) completed phase one of the reorganisation of the Sagicor Jamaica Group with the formation of an upstream holding company, Sagicor Group Jamaica Limited, which will eventually become the ultimate holding company, of all the Jamaican operations of the brand Sagicor when phase two is completed. This reorganisation will enable the Group to improve its management of capital and to align its organisational structure with the requirements of the new omnibus legislation for deposit-taking institutions.
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Businessuite Top 100 Caribbean Companies
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october 2014
TOP 10 Caribbean Public Companies JA$'000
2013 Key Financials:
Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
420,325 62,498 1,967,950 373,334
38,249,286
379,570
Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
14.87% 3.18% 16.74%
Ear nings Per Shar e Earnings Per Share
1.67
EPS % Change (from 2012): EPS (5 year annualized):
1.422
T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
US$'000
42,356,165 6,297,935 198,310,297 37,620,843
Market Cap. (annual report date)
Dr. The Hon. R.D. Williams Chairman
%
7.05%
0.01657
0.01411
18% 20.8
The following edited extract was taken from the company’s 2013 Annual Report to shareholders.
pay out another almost $10 billion annually.
Our Team delivered net profits of $6.3 billion, which is 7% above 2012 and our fourteenth consecutive year of profit growth. Revenues were $42.4 billion, an improvement of 19% over 2012. We provided $15.75 billion of insurance and annuity benefits to our customers and their families in 2013. In addition, we managed the GEASO and GPASO health business on behalf of the Government of Jamaica and the largest pool of pension funds in Jamaica. These are major businesses from which we
Underpinning our promise to deliver promised benefits to our customers is a strong balance sheet. In 2013 our assets grew 14% to $198 billion and capital improved by 9% to $35.9 billion after paying a dividend of $1.5 billion to our 8,312 shareholders. Regulated companies of the group continue to exceed the risk-adjusted capital required by our regulators.
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Our investment funds outperformed their respective benchmarks for the most part and some were the best performers in their asset class.
In 2013 we begun a group reorganization exercise to comply with
Businessuite Top 100 Caribbean Companies
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TOP 10 Caribbean Public Companies
the new Omnibus Banking Bill, which is expected to be passed in Parliament by June 2014. The first phase of the reorganisation involved the establishment of a group holding company, Sagicor Group Jamaica Ltd (SGJ), and the change of ownership of our two overseas subsidiaries in Cayman and Costa Rica from Sagicor Life Jamaica to the holding company, Sagicor Group Jamaica. All the shareholders of SLJ are now shareholders of SGJ. The second phase will see Sagicor Investments Ltd (SIJ) and Sagicor Bank Ltd (SBJ) also being transferred to the holding company SGJ. This will
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take place in May 2014. • Considerable progress towards a more competitive exchange rate.
Outlook for 2014 Jamaica has successfully completed the first three quarters of the fouryear IMF programme. In so doing several significant milestones were achieved, including: • A reformed tax system to improve the competitiveness of some sectors; • Considerable strengthening of the Fiscal Rule to enhance fiscal transparency and lock in fiscal gains; • Much-improved fiscal accounts;
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• This success has come at a cost to the Jamaican consumer and there is still a long way to go to stabilize the Jamaican economy. Notwithstanding the long journey ahead of us, at Sagicor, our confidence has been bolstered and that is why we have made the decision to invest through the acquisition of RBC Jamaica for our shareholders and in the hotel business for our pension clients. We look forward to 2014 with cautious optimism.BM
october 2014
TOP 10 Caribbean Public Companies
Businessuite #9 Caribbean Ranked Public Company Scotia Group Jamaica Ltd. “Breaking Through Barriers, Making Our Customers Financially Better Off.�
Company Profile: Stock Exchange: Jamaica Company: Scotia Group Jamaica Ltd. 2014 Rank:
#9
Chair: Sylvia Chrominska President & CEO: Jacqueline (Jackie) Sharp Address: Scotia Centre Cnr Duke and Port Royal Street Kingston Jamaica 1.888.4SCOTIA 1.888.472.6842 Website: www.scotiabank.com/jm
S
cotia Group Jamaica Limited (Scotia Group) has delivered 124 unbroken years of high quality financial services to Jamaica, supported by a network of 38 banking and investment branches, 231 Automated Teller Machines and 2,326 employees. Our parent company, The Bank of Nova Scotia is headquartered in Toronto, Canada.
We provide a broad range of financial services through our main subsidiaries to a wide base of personal, commercial, corporate and government clients across Jamaica.
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TOP 10 Caribbean Public Companies
2013 Key Financials:
JA$'000 Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
Market Cap. (annual report date) Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
441,140 114,292 3,863,311 690,613
62,698,195
622,191 25.91% 2.96% 16.55%
3.7
EPS % Change (from 2012): EPS (5 year annualized):
3.432
T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
I
0.0341
19.588
Scotia Group delivered Net Profit to common shareholders of $11.51 billion, with a strong return on average equity of 17.11%. These results, which translate to earnings per share of $3.70, up 13.5% over the previous year, were delivered as a result of our diversified business model, prudent risk management practices and our dynamic team of Scotiabankers who once again showed that our goal of making our customers financially better off is a winning one.
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13.50%
0.0367
17.11
The following edited extract was taken from the company’s 2013 Annual Report to shareholders.
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US$'000
44,453,718 11,517,195 389,305,805 69,593,038
Ear nings Per Shar e Earnings Per Share
Sylvia Chrominska Chair Scotia Group Jamaica Limited
%
The Group remains one of the largest banking and financial service organizations in Jamaica, with assets of $389 billion and deposits held by the public of $183 billion as at October 31, 2013. Our growth was largely achieved through retail lending, including mortgages and our commercial deposit portfolios. Our insurance business line continues to show growth in gross premium income, and the investment business line experienced strong growth in its unit trust and mutual funds as customers sought to diversify their portfolios. Our growth was achieved within our
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TOP 10 Caribbean Public Companies risk tolerance levels due to strong management and oversight. Our provision for credit losses as a percentage of total loan portfolio was stable, despite strong loan growth, as a result of increased focus on working with our customers through difficult times as well as strong collection and recovery activities. Scotia Group is committed to maintaining a solid capital base as we continue to exceed the regulatory capital requirement in all our business lines. We have reinvested 56.7% of our profit into the Group, growing our capital base by $5 billion during the year. This will ensure that we have a strong buffer to withstand market volatility, which gives our valued customers confidence that they are safe with us. A robust capital position also places us in a strategic position to take advantage of future opportunities. Our strategic priorities are the road map for our continued long-term success and are geared towards leveraging our team’s strengths to meet the complex and dynamic needs of our customers, while generating sustainable and profitable growth across all our
business lines. Over the course of the last year, we have continued to execute well on our four strategic pillars: 1. High Performance Culture Our high performance culture is a source of competitive advantage and a key driver of our longterm success. During the period, identification and development of our talent source pool continued to be core areas of focus. 2. Sustainable Revenue Growth The strength of our 2013 results demonstrates our commitment to delivering sustainable and profitable revenue growth. During the period, we continued to build market share in residential mortgages through targeted sales efforts and a series of well executed initiatives designed to increase our share of wallet in this segment. 3. Operational Efficiency
consolidation of key support functions across the Group and drive adoption of our alternative delivery channels which offer our clients more convenient, cost effective and secure ways of doing business with us. 4. Client Intimacy During the period, we enhanced our service offering to meet the distinct needs of our affluent customer segment through the launch of Premium Banking and laid the groundwork for empowering staff to respond to customer complaints at the initial point of contact. Our strategy is grounded in our robust risk management culture where risks must be understood, measured and managed. We are confident about our strategic direction and our ability to execute based on our committed team and infrastructure which is supported by the global strength of Scotiabank and the strength of our capital base.BM
We continued to execute our hub strategy to create centers of excellence through the
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Businessuite #8 Caribbean Ranked Public Company National Commercial Bank Is Structured To Deliver
Company Profile: Stock Exchange: Jamaica & Trinidad and Tobago Company: National Commercial Bank Jamaica Limited 2014 Rank: Chairman:
#8 Michael Lee-Chin OJ
Group Managing Director: Patrick Hylton Address: National Commercial Bank Limited 32 Trafalgar Road, Kingston 10 Jamaica, W.I. Telephone: United States, Canada and the English Speaking Caribbean: 1-866-622-3477 United Kingdom: 0-800-032-2973 Website: www.jncb.com
NCB is Jamaica’s largest banking and financial services group, based on consolidated total assets at September 30, 2013. This company provides individual consumers, small and medium-sized enterprises, (SMEs), large corporations and government institutions with a range of financial products and services Founded more than 175 years ago, NCB provides banking, insurance, investments, structured & trade finance, wealth management, pension fund management, life and general insurance and trust services through more than 40 branches and locations. The company also offers selected transactions such as bill payments, transfers, and enquiries at over 170 automated banking machines (ABMs), online (www.jncb.com) and via telephone banking. The National Commercial Bank Jamaica Limited trades under the symbol “NCBJ” on the Jamaica and Trinidad & Tobago Stock Exchanges. 80
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TOP 10 Caribbean Public Companies JA$'000
2013 Key Financials:
Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
446,575,055 72,456,501
485,678 84,845 4,431,627 719,028
40,405,575
400,968
8,549,831
Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
17.47% 1.91% 11.80%
Ear nings Per Shar e Earnings Per Share
$3.47
EPS % Change (from 2012): EPS (5 year annualized):
4.37
T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
21.21
“As has been the case in the past, we have refused to let the headwinds that confronted us during 2013 financial year curb our enthusiasm or optimism for the future. We have risen to the challenge, producing strong growth in our core business segments as was reflected in increases in our loan and funding portfolios. This was despite the fact that our business performance was significantly impacted by a weakened economic climate marked
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-14.95%
0.03443
12.32%
The following edited extract was taken from the company’s 2013 Annual Report to shareholders.
US$'000
48,941,802
Market Cap. (annual report date)
Michael Lee-Chin OJ Chairman
%
by losses incurred as a result of our participation in the national and private debt exchange programmes, increased operating costs and lower asset yields. Globally there is a sense of opportunity and much focus remains on approaching the new financial year with pragmatism. I am confident that the skill, agility, resilience and determination that resides in all of us here at the nation’s Bank, will continue to propel us forward so we may meet and conquer these challenges and deliver a stellar performance that surpasses the expectations of both our customers and our shareholders and redounds to the wellbeing of our nation.”
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Our Diversified Business Model And Strong Risk Discipline Will Keep Us On A Sustainable Growth Path. We recorded net profits of $8.5 billion for the financial year ended September 30, 2013, a decline of $1.5 billion or 15% from the previous financial year. The decrease in profitability was as a result of increased operating expenses, lower asset yields, and losses incurred on debt exchange transactions.
loans. Net interest income represented 62% of operating income for the 2013 financial year, compared with 63% for the 2012 financial year. Non-interest income of $14.4 billion for the 2013 financial year represented 38% of operating income, compared with $12.8 billion in the 2012 financial year (37% of operating income).
Operating income, the sum of net interest income and non-interest income, was $38.0 billion for the 2013 financial year, an increase of $3.4 billion, or 10%, over the 2012 financial year.
We continue to proactively manage our spreads and net interest margins, while upholding strong risk management practices. We believe our diversified business model and strong risk discipline will keep us on a sustainable growth path.
For the financial year ended September 30, 2013, net interest income of $23.6 billion, grew by $1.8 billion, or 8%, compared to the financial year ended September 30, 2012, mainly as a result of increased interest income from
Operating expenses for the 2013 financial year were $27.8 billion, a $5.5 billion, or 24%, increase over the 2012 financial year. The increase over 2012 reflected inflated operating costs driven by additional revenue sources
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from the general insurance segment and other costs associated with the postponed initial public offering and initiatives to improve efficiency, productivity and performance management, as well as maintain growth in our core business. Outlook We continue to pursue activities aligned to our strategy of being among the top five financial services institutions in the English and Spanish speaking Caribbean. Our focus will continue to be driven by the principle of continuous improvement focused on enhancing the customer experience through the use of technology, deepening customer relationships, improving sales and service productivity and establishing lean principles with an aim to reducing operating expenses through improved efficiencies.BM
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TOP 10 Caribbean Public Companies
Businessuite #7 Caribbean Ranked Public Company Goddard Enterprises….From The Ground Up: Taking The View That Uncertainty Presents Many Opportunities. Company Profile: Stock Exchange:
Barbados
Company: Goddard Enterprises Limited 2013 Rank: #7 Chairman: A. Charles Herbert CEO: Anthony H. Ali Address:
The Goddard Building, Haggatt Hall, St. Michael, Barbados. Tel: (246) 430-5700 Fax: (246) 436-8934 Email: gelinfo@thegelgroup.com Website: www.goddardenterprisesltd.com
Goddard Enterprises Limited (‘the Company’) is incorporated under the Laws of Barbados. The principal activities of the Company and its subsidiaries (together ‘the Group’) include airline, industrial and restaurant catering, ground handling services, general trading, meat processing, printing and print brokerage, baking, packaging, automobile and automotive parts sales, insurance, real estate, shipping agents and stevedoring, manufacturing of aerosols and liquid detergents, investments, rum distilling, water purification and bottling and island
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tours. Associated companies are involved in waste disposal, laundry services, financing, property rentals, investments, general insurance and hotel operations. The Group operates throughout the Caribbean and Central and South America. The Company is listed on the Barbados Stock Exchange. These consolidated financial statements have been approved for issue by the Board of Directors on December 16, 2013.
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2013 Key Financials:
BB$'000 Revenues: Profits After Tax: Total Assets: Total Shareholder Equity: Market Cap. (annual report date) Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
486,174 17,166 188,203 232,980
369,766
186,751 3.53% 9.12% 7.37%
35.2
EPS % Change (from 2012): EPS (5 year annualized):
28.58
T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
A. Charles Herbert Chairman
84
Charles Herbert became Chairman of the Goddard Group of Companies on February 5, 2013, following the retirement of Mr. Joseph N. Goddard. Mr. Herbert spent 15 years of his professional career with The Barbados Mutual Life Assurance Society, now Sagicor Life Inc. (“Sagicor”), and at the time of his resignation, was a member of its senior management team responsible for the Actuarial, Group Insurance and Pensions Departments.
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US$'000
962,625 33,988 372,641 461,301
Ear nings Per Shar e Earnings Per Share
Focused And Poised To Capitalize On Opportunities As They Arise.
%
-14.56%
17.78 14.43
4.60% 3.88%
The following edited extract was taken from the company’s 2013 Annual Report to shareholders. Output in the region is projected to expand by 2.75% in 2013, the lowest rate in four years, with domestic demand remaining the main driver. It is anticipated that growth will edge up to 3% in 2014 as external demand strengthens gradually, but this growth level would still be below the average growth rate of the last decade. For the financial year ended September 30, 2013, Group revenue decreased by 3.7% over the prior year to $962.6 million. This decrease generated a Gross Profit of $357.3 million, which was up over the prior year by 1.6%. Gross Profit expressed
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TOP 10 Caribbean Public Companies as a percentage of Sales was 37.1%, which was above the 35.2% achieved in 2012. This was accomplished despite an economic environment plagued by spiraling costs, increased competitive activity and high volatility in financial markets. Our selling, marketing and administrative expenses were $312.7 million, compared to $303.0 million in 2012, which represented an increase of 3.2%. These expenses were due to cost-of-living allowances and mandatory salary adjustments in some of the territories where we operate. They included restructuring costs and one-time charges of $3.4 million incurred on the implementation of a new Economic Profit (“EP”) Incentive Programme and the introduction of an Enterprise Resource Planning System. Profit from Operations before Other (losses)/gains – net decreased over prior year by 7.8% to $48.7 million. Other (losses)/gains – net increased by $0.6 million on a prior year loss of $1.6 million. This represented a 36.1% increase, which was attributable mainly to hyper-
inflationary adjustments made in our Venezuelan operations. Overall Net Income for the year of $34.0 million evidenced a marginal improvement of 0.2% over the prior year, despite a 6.4% decline in Income before Taxation. The overall reduction in the taxation charge of 24.2% was a result of reduced profits seen in our businesses in St. Lucia, a high tax jurisdiction in which we operate. Our share of Income after Taxation from our Associated Companies rose by $1.9 million to $9.8 million as a result of improved performance by Globe Finance Inc. as well as some of our Associated Companies within our Manufacturing Division. With regard to the Group Consolidated Balance Sheet, our working capital ratio at 1.49 was marginally below prior year’s ratio and reflected adequate management control over the number of days of inventories and trade receivables. The total assets of the Group’s business was financed by 37.7% debt, which was well within conservative financial guidelines and consistent with the previous year’s experience.
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Our Net Asset Value per share now stands at $7.67 compared to $7.57 in 2012, an increase of 10 cents per share, and our share price, which moved from $5.50 as at September 30, 2012 to $6.15 as at September 30, 2013, has shown some signs of recovery. As we look forward to 2014, we recognize that we will continue to operate in an uncertain economic environment but take the view that such uncertainty also presents many opportunities. During the coming year, we intend to focus on enhancing our efficiency, maximising our productivity and improving our cost control mechanisms to ensure that we are poised to capitalize on opportunities as they arise. We will continue to build on our core strengths but will also supplement them with innovation, investment in new technologies and information systems that enable growth.BM
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Businessuite #6 Caribbean Ranked Public Company CIBC First Caribbean International Bank “Restructuring Operations To Enhance Long Term Competitiveness For What Matters” Market/Stock Exchange:
Barbados Stock Exchange
Company:
CIBC First Caribbean International Bank
2014 Rank:
#6
Chairman: Michael Mansoor (Retired as the Bank’s Executive Chairman and Chairman of the Bank’s charitable foundation at the end of Fiscal Year.) Chief Executive Officer:
Rik Parkhill
Address: Website: www.cibcfcib.com
CIBC First Caribbean International Bank (FCIB)is a relationship bank offering a full range of market-leading financial services through its wholesale banking, retail & business banking and wealth management segments. CIBC/FCIB is located in seventeen (17) countries around the Caribbean, providing the banking services that matter to our customers through approximately 3,400 employees, in one hundred and two (102) branches, banking centres and offices. This bank is one of the largest regionally-listed financial services institutions in the English and Dutch speaking Caribbean, with over US$11.4 billion in assets and market capitalization of US$1.8 billion. The face of banking is changing 86
throughout the world and CIBC FCIB intends to lead these changes with the expertise, integrity and knowledge of banking that almost 250 years of combined experience in the Caribbean brings. The following edited extract was taken from the company’s 2013 Annual Report to shareholders. For the fiscal year ended October 31, 2013 the Bank generated $529.9 million in revenue and maintained strong capital levels with a Total Capital Ratio of 24%, which is well in excess of regulatory requirements. Our capital levels provide us with the strength to endure challenging times as well as to
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invest in the future. Results were affected by several items of note including $37.6 million ($35.5 million after-tax) of restructuring related expenses and an increase in the collective allowance for loan losses of $25.0 million ($21.6 million after-tax). This resulted in a reported net loss for the year of $27.5 million. Excluding these items, the Bank generated $29.6 million of net income for the year compared with $71.9 million in the prior year. During 2013 the Group approved and announced a plan to restructure its operations with the aim of enhancing its long term competitiveness through
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2013 Key Financials: (reported in US$)
% Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
529,852 (27,493) 11,439,114 785,141
Market Cap. (annual report date)
2,373,606
Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
-5.19% -0.24% -3.50%
Ear nings Per Shar e Earnings Per Share -cents
-1.70
EPS % Change (from 2012):
-270.00% 6.40
EPS (5 year annualized): T otal Retur n to Investor s
Michael Mansoor, LLD, Retired Chairman; reductions in costs, duplication and complexity in the years ahead. Implementation will achieve operational efficiencies and annual savings. The plan is estimated to cost $37.6 million before taxes and has been included in operating expenses for this year. Operating expenses increased year on year by $55 million (16%) primarily due to restructuring expenses and increased business taxes of $9 million. The costs of restructuring include severance benefits, curtailment gains and losses on retirement benefit and obligations and accelerated depreciation. The restructuring costs were the main driver of the increase to remuneration and benefits, property & equipment expenses and depreciation. The increase to business tax is caused by tax assessments and increased value added taxes on services to non-residents. Other expenses increased largely due to an increase in non-credit losses. Further contributing to the loss this year was the increase in loan loss impairment, declining net interest income and increased other operating expenses, the collective impact of which was partially offset by increased
Total Return to Investors: Total Return to Investors (5 year, annualized)
2.60% 3.36%
operating income. The region continues to face significant economic challenges and this is reflected in the protracted slowdown in business activity and increased rates of loan delinquency. The results for both periods were affected by certain significant items as follows: 2013 • $55 million increase in operating expenses which includes $37.6 million related to restructuring expenses • $31 million increase in loan loss impairment reflecting further deterioration of collateral and updates to key assumptions • $24 million decrease in net interest income largely due to sustained downward pressure on loan volumes and margins in key markets • $11 million increase in operating income driven by foreign exchange and securities gains 2012 • $33 million increase in loan loss impairment due to deterioration in october 2014
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US$'000
collateral values, new non-performing loans and updates to key assumptions/ input in arriving at the allowance. • $11 million increase in net income from the acquisition of CIBC Bank and Trust entities in Cayman and Bahamas. • $19 million decrease in interest expenses related to lower cost of funds and interest rate swap volumes Total revenue is down year on year by $13 million, due to lower net interest income of $24 million partially offset by increased operating income of $11 million. Total expenses increased year over year by $86 million due to increased operating expenses of $55 million and increase loan loss impairment of $31 million. We announced a final dividend for the year of $0.015 per share, bringing the total dividend to $0.030 for the year. Our dividend remains unchanged and reinforces our view that the future continues to be promising for our franchise and our commitment to the Caribbean region is resolute.BM
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Businessuite #5 Caribbean Ranked Public Company Republic Bank Group Limited “Above and Beyond: Looking to Build A Strong Portfolio Of Business On The African Continent.” Company Profile: Stock Exchange: Trinidad and Tobago Company: Republic Bank Group Limited 2014 Rank: #5 Chairman: Ronald F. deC. Harford CEO: David Dulal-Whiteway Address:
Republic House PO Box 1153 9-17 Park Street, Port of Spain Trinidad and Tobago, West Indies Tel: (868) 625-4411, 623-1056 Fax: (868) 624-1323 Email: email@republictt.com Website: www.republictt.com
Republic Bank Limited (the “Parent”) is incorporated in the Republic of Trinidad and Tobago and was continued under the provision of the Companies Act, 1995 on March 23, 1998. The Republic Bank Group (the “Group”) is a financial services group comprising 14 subsidiaries and four associated companies. The Group is engaged in a wide range of banking, financial and related activities in Trinidad and Tobago, the Caribbean and, since November 2012, in Ghana. A full listing of the Group’s subsidiary companies is detailed in Note 29 while associate companies are listed in Note 88
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6. Republic Bank Limited is listed on the Trinidad and Tobago Stock Exchange. Until October 31, 2012, the CL Financial Group held, through its various subsidiaries, 51.4% of the shares of Republic Bank Limited, of which Colonial Life Insurance Company (Trinidad) Limited (CLICO) and CLICO Investment Bank Limited (CIB) combined, held 51.1%. CLICO Investment Bank Limited (CIB) which together with its subsidiary First Company Limited owned 18.3% of the shareholding of Republic Bank
TOP 10 Caribbean Public Companies Limited, was on October 17, 2011 ordered by the High Court to be wound up by a Deposit Insurance Company appointed liquidator. Accordingly, this 18.3% shareholding is under the control of the Deposit Insurance Company. On November 1, 2012, 24.8% of Republic Bank formerly owned by CLICO was transferred into
2013 Key Financials:
an investment fund launched by the Government of the Republic of Trinidad and Tobago and called the CLICO Investment Fund (the Fund). The Trustee of the Fund is the CLICO Trust Corporation Limited which holds the 24.8% shareholding in Republic Bank Limited in trust solely for the benefit of subscribing Unit holders of the Fund. The Fund is as a consequence,
Republic Bank is A Diversified And Resilient Group
T T $'000
%
US$'000
Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
3,437,265 1,210,549 57,563,015 8,304,149
535,600 188,630 8,969,555 1,293,965
Market Cap. (annual report date)
18,669,917
2,909,174
Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
35.22% 2.10% 14.58%
Ear nings Per Shar e Earnings Per Share
$7.30
EPS % Change (from 2012): EPS (5 year annualized): T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
the largest shareholder in Republic Bank Limited. Effective November 1, 2012, the CL Financial Group is no longer considered a related party of Republic Bank Limited.
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$6.75
0.41%
$1.14
14.45% 15.506
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TOP 10 Caribbean Public Companies
a credible performance given the downturn in the tourismexposed economies in which we operate.
Ronald F. deC. Harford Chairman
The following edited extract was taken from the company’s 2013 Annual Report to shareholders. In the midst of a global economic slowdown, I am pleased to report that the Republic Bank Group recorded profit attributable to shareholders of $1.17 billion, an increase of $11.0 million or 1.0% over the prior year,
90
Difficult economic conditions persisted in the tourismdependent countries, with Barbados’s profitability declining by $23.3 million or 29.6% and losses being recorded in the Eastern Caribbean. The Group recorded a loss of $75.7 million on its investment in Eastern Caribbean Financial Holdings Limited, the parent company of Bank of Saint Lucia while impairment expenses of $53 million were booked as a result of the Government of Grenada defaulting on its indebtedness. This default contributed to our subsidiary in Grenada recording a loss of $18.2 million (RBL’s share $9.3 million). Despite this, improved performance in our commodity-exposed economies and other subsidiaries led to a marginal increase in profitability, which is reflective of the diversification and
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resilience of the Group. I am also pleased to report that we have formed a partnership with HFC Bank (Ghana) Limited in Ghana, West Africa, and during the last year built up a 40% shareholding. We are excited about this opportunity to work with HFC Bank (Ghana) Limited as we seek to build a strong portfolio of business on the African continent. Based on these results, the Board of Directors has declared a final dividend of $3.00 (2012: $3.00), which brings the total dividend for the fiscal year to $4.25, in line with 2012. This final dividend will be paid on December 2, 2013 to all shareholders of record at November 18, 2013. Notwithstanding the poor economic conditions which are expected to persist in the medium term, especially in the tourism-dependent economies in which we operate, the Group is expected to continue to perform satisfactorily. BM
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TOP 10 Caribbean Public Companies
Businessuite #4 Caribbean Ranked Public Company "GraceKennedy Is Investing For Growth & Delivery On Its Promise”
Company Profile: Stock Exchange:
Jamaica and Trinidad & Tobago
Company: GraceKennedy Limited 2013 Rank: #4 Chairman: Gordon V. Shirley, OJ Group Chief Executive Officer: Donald G. Wehby Address: 73 Harbour Street, Kingston, Jamaica Tel: 922-3440 Fax: 922-3664 Website: www.gracekennedy.com www.gracefoods.com
GraceKennedy Limited is publicly listed on the Jamaica and Trinidad & Tobago Stock Exchanges. The Company was launched on February 14, 1922. GraceKennedy Limited is the parent company of a Group of subsidiaries operating mainly in the food and financial services industries. The Group’s operations are structured as follows: • GraceKennedy Foods (GK Foods): GKFoods is involved in the business of food manufacturing through the company’s factories as well as through
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external suppliers, the distribution of Grace and Grace-owned brands internationally and domestically and the operation of retail outlets through the Hi-Lo Supermarket chain in Jamaica. The Group also manufactures and distributes third party brands internationally and domestically. GK Foods operates primarily in Jamaica, the Caribbean, Central America, North America, Europe and Africa. • GraceKennedy Financial Group (GKFG):
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Exchange engaged in the retailing and wholesaling of building material, home improvement supplies, household items and agricultural products. H&L operates within Jamaica with ten Rapid True Value locations and six Agro Grace Retail Centres located island wide. GraceKennedy owns 58.1% of the shares of H&L.
This comprises Commercial Banking, General Insurance, Insurance Brokerage, Securities, Remittance, Cambio and Payment Services businesses. GKFG presently operates within the English speaking Caribbean. • Hardware & Lumber Limited (H&L): H&L is a publicly listed subsidiary on the Jamaica Stock
2013 Key Financials:
JA$'000 Revenues: Profits After Tax: Total Assets: Total Shareholder Equity: Market Cap. (annual report date) Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
67,257,502 3,794,064 108,643,306 32,765,684
667,436 37,651 1,078,131 325,153
18,433,209
182,924
9.66
EPS % Change (from 2012): EPS (5 year annualized): T otal Retur n to Investor s Total Return to Investors: Total Return to Investors (5 year, annualized):
Businessuite Top 100 Caribbean Companies
US$'000
5.64% 3.49% 11.58%
Ear nings Per Shar e Earnings Per Share
92
%
-7.29% 8.612 10.20% 10.50
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0.09586
TOP 10 Caribbean Public Companies
Gordon V. Shirley, OJ Chairman
Strengthening Home Base & Building A Global Consumer Group The following edited extract was taken from the company’s 2013 Annual Report to shareholders. Due to the economic challenges facing Jamaica and the resultant National and Private Debt Exchange programmes in which our company participated, there was significant impact on GraceKennedy and on the local economy in general. A one-time loss of $293 million was recorded in the income statement arising from the exchange of instruments. Our Company decided that participation in both debt exchange programmes was in the best interest of our company and the right decision for Jamaica in the long-term. Group revenues for 2013 were $67.3 billion, representing a 9.6%
increase over the prior year. This revenue increase was accompanied by a 23.7% increase in pre-tax profits. In 2012 the corporate income tax rate for unregulated companies was reduced from 33 1/3% to 25% effective January 1, 2013. This resulted in a significantly lower tax charge in 2012 as a result of a one-off change in our deferred income tax. As a result of this one-off impact in 2012, despite the significant increase in pre-tax profits, 2013 net profits were flat when compared to 2012. Earnings per share declined by $0.76 to $9.66. Total assets grew by 4.3% to total $108.6 billion for 2013. This growth was financed largely by an increase in total equity of 7.4% to total $34.2 billion. In keeping with our objective to improve shareholder returns, the total dividends paid in 2013 was $2.18 per share, compared to $2.00 in 2012, an increase of 9%. The key areas of focus for our company during the year were strengthening our Jamaican businesses, growing our international footprint, specifically in the USA, Canada, the United Kingdom and our new markets in Western Africa and Continental
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Europe; improved capital management, and continued focus on our customers and our employees. These coupled with GraceKennedy Group’s commitment to good corporate citizenship drove our activities during 2013. We are excited about 2014 and launched the year under the theme “Investing for Growth, Delivering on our Promise.” We are focused on the growth of our international business, strengthening and maintaining our domestic businesses, improved efficiency and better capital management. We will be working assiduously towards creating the conditions that make those goals reality. We also aim to get closer to our customers and consumers across our various markets and serving them better. We have every confidence in our excellent team, and firmly believe that we have the right infrastructure, the appropriate risk mitigation and the strategies in place to achieve our goals. We thank you for your continued support on this journey. We sincerely appreciate it.BM
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We’ve been by your side, turning dreams into reality, transforming houses into homes and changing meals into memories. We’ll continue to deliver the quality products and services you deserve because you are the reason
we’re here.
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TOP 10 Caribbean Public Companies
Businessuite #3 Caribbean Ranked Public Company ANSA McAL: Setting Sights On The Next Horizon Company Profile: Stock Exchange:
Trinidad and Tobago
Company: ANSA McAL Limited 2013 Rank: #3 Chairman: A. Norman Sabga Chief Executive Officer: A. Norman Sabga Address:
9th – 11th Floors, TATIL Building 11 Maraval Road, Port of Spain, Trinidad , West Indies Phone: (868) 625-3670 to 5 Fax: (868) 624-8753 Website: www.ansamcal.com
The ANSA McAL Group of Companies is headquartered in Port of Spain, Trinidad and Tobago and has been doing business since 1881. The company is listed on the Trinidad and Tobago Stock Exchange (TTSE: AMCL) and is one of the largest conglomerates in the Caribbean. Today the strength of the Group is unparalleled and this is attributed to the commitment and dedication of its people. Through the years, the ANSA McAL Group has grown considerably with an asset base of TT$ 12.2 Billion, revenues of TT$ 6.2 Billion (TT$ 5.9 Billion – 2012) and profit before tax of TT$ 1.1
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Billion (TT$ 948 Million – 2012) at December 31, 2013. The Group’s business operations span 8 sectors with its tentacles extending through Trinidad and Tobago, Barbados, St. Kitts and Nevis, St. Lucia, Guyana, Grenada and the United States of America. The ANSA McAL Group is active in the automotive trade, beverages, distribution, financial services, manufacturing, media, retail and services. The group possesses a diverse workforce of approximately 6,000 employees.
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TOP 10 Caribbean Public Companies
T T $'000
2013 Key Financials:
Revenues: Profits After Tax: Total Assets: Total Shareholder Equity: Market Cap. (annual report date)
968,845 136,281 1,905,835 932,343
11,716,823
1,825,733 14.07% 7.15% 14.62%
Ear nings Per Shar e Earnings Per Share
4.31
EPS % Change (from 2012): EPS (5 year annualized):
3.682
T otal Retur n to Investor s
The following edited extract was taken from the company’s 2013 Annual Report to shareholders. “I am very happy to announce that in the year under review your Group has crossed the Billion Dollar PBT threshold. Even as we celebrate this landmark achievement, being true to our DNA we are already setting our sights on the next horizon. In 2013 your Group set another record in its 132nd year of operation and I would like, on your behalf to thank every one of the almost six thousand members in the ANSA McAL family, Businessuite Top 100 Caribbean Companies
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17.00%
0.672 0.574
10% per annum appr. based on 55% in five years.
Total Return to Investors (5 year, annualized):
96
US$'000
6,217,660 874,598 12,230,889 5,983,403
Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
A. Norman Sabga Chairman and Chief Executive Officer
%
from our Miami operation in the North to Guyana in the South for the effort and dedication it took to achieve this goal. This is a proud achievement for us all. Your Executive believes delivering consistent performance over the long term is key to building and maintaining stakeholder confidence. I am therefore pleased to report that for the fourth consecutive year, your Group has maintained a strong growth trajectory. Revenues of $6.2 billion have improved by 6% and a record PBT of $1.1billion is up on prior year by 21%. Earnings per Share (EPS) of $4.31 also improved by 17% over the previous period. Total assets are now at $12.3 B from $11.3B in 2012.
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TOP 10 Caribbean Public Companies At the time of reporting, your Group remains stronger and healthier than ever before, with our robust corporate governance structure infused in every facet of operations. In 2013, debt was further reduced by 53% and our gearing ratio is at 1.9%. Cash generation from operations was $985M which represents 68% of EBITDA: our debt capacity can comfortably support the investments that will fuel the growth of the Group in the years ahead. We constantly remind ourselves that growing the skills and capacity of our people is the key to unlocking the ingenuity that will keep us ‘steps’ ahead of our competition. I am indeed proud to report, where ever we operate regardless of the challenges, our Executive and Management teams’ commitment to ‘being the best’ is relentless. In 2013, the Group committed investments in the Manufacturing, Brewing, Media and Automotive Sectors of $285M in new business projects or in areas that either increased capacity or maintained and improved plant and process efficiency. Some of these initiatives are complete and are improving our domestic and export competiveness.”BM
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Businessuite #2 Caribbean Ranked Public Company Sagicor Financial Corporation Is Optimistic About Results For 2014
Company Profile: Stock Exchange: Barbados, Trinidad & Tobago and London Company: Sagicor Financial Corporation 2014 Rank: #2 Non-Executive Chairman: Stephen McNamara Group President and C.E.O: Dodridge Miller Address: Sagicor Corporate Centre Wildey, St. Michael, Barbados Phone: (246) 467-7500 Fax: (246) 436-8829 Email: info@sagicor.com Website: www.sagicor.com
Sagicor is synonymous with world-class financial services. The company’s vision is “To be a great company committed to improving the lives of the people in the communities in which we operate.” With a proud history dating back to 1840, Sagicor is a dynamic, indigenous Group which has been redefining financial services in the Caribbean, building a strong base from which it has expanded into the international financial services market. Sagicor now operates in 22 countries in
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the Caribbean, Latin America, the United Kingdom and the United States. In 2002, after 162 years as the Barbados Mutual Life Assurance Society, the company demutualised with the overwhelming support of its policyholders, and Sagicor Financial Corporation was formed as a publicly listed holding company. Sagicor, the new company name, means “wise judgment” and reflects a new vision for financial advice and services. For over 168 years, Sagicor has worked to help families by providing the assurance and peace of mind needed, especially during their most challenging times. This will never change.
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TOP 10 Caribbean Public Companies %
2013 Key Financials: (reported in US$)
US$'000 524,991 2,081 5,297,752 725,186
Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
171,913
Market Cap. (annual report date) Pr ofit After T ax as a % of Sales: Assets: Stockholders' Equity:
0.40% 0.04% 0.29%
Ear nings Per Shar e Earnings Per Share -cents EPS % Change (from 2012):
-27%
EPS 2012 only** T otal Retur n to Investor s Total Return to Investors: Total Return to Investors 2012only**
12.5 17.1
7.70% 9.80%
Editors Note The company’s financial statement refers to a profit of US$79.6M but the table above shows only US$2M. The US$79.6m we understand refers to net income from ongoing operations. They have as we further understand separated ongoing for discontinued operations and reported on them separately. The US2m is the net result of the two segments results as we understand the information. Debt impairment in Grenada Low interest rates across all countries General weak economic activity.
The following edited extract was taken from the company’s 2013 Annual Report to shareholders.
Stephen McNamara Non-Executive Chairman
Key factors which influenced 2013 performance:
Sale of Sagicor Europe Debt restructuring in Jamaica (NDX)
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The Sagicor Group’s operations comprising our businesses in the Caribbean and in the USA, continued to perform well. Net income from continuing operations of US$79.6 million was realised for the year ended December 31, 2013, (US$75.3 million for 2012) after accounting for capital losses of US$22.0 million through the Group’s participation
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in the Government of Jamaica National Debt Exchange (NDX), and impairment provisions on Government of Grenada bonds.
On July 29, 2013, the company entered into an agreement to sell Sagicor Europe (SEL) and its subsidiaries AmTrust Financial Services, Inc. (AmTrust), subject to regulatory approvals. Final regulatory approvals were obtained on December 23, 2013, on which date the sale was completed. The operations of the Sagicor Europe operating segments are presented as discontinued operations in the financial statements. The terms of the sale required Sagicor to retain an interest in the run-off of the 2011, 2012 and 2013 underwriting years of the account after the syndicate has been formally sold and is subject to a limit. The Sagicor Group’s experience during our ownership of Sagicor at Lloyds was particularly challenging. Weak operating results from this segment over the years and a protracted sales process combined to impact shareholders’ equity negatively. On the positive side, despite a challenging economic environment, the Caribbean and USA operations continue to grow and to produce positive results for shareholders.
signed a Sales and Purchase Agreement to acquire all of the issued shares of RBC Royal Bank (Jamaica) Limited and RBTT Securities Jamaica Limited (collectively “RBC Jamaica”) from Royal Bank of Canada. The acquisition is subject to regulatory approvals. At December 2013, RBC Jamaica had total assets of US$509 million.
Outlook for 2014 The Global economy is expected to continue to improve; Growth is forecasted at 3.6% Weak economic conditions in Caribbean economies (excluding Trinidad)are expected to continue through 2014; Jamaican economy is expected to experience further improvements Jamaica’s currency will depreciate but at a slower rate.
Sagicor will continue to restructure to reduce operating cost; Grow revenue; Remain positively exposed to rising interest rates; Optimistic about our results for 2014. BM
On January 29, 2014, Sagicor Group Jamaica Limited
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Businessuite #1 Caribbean Ranked Public Company The Massy Group, A Force For Good; A Very Responsible And Profitable Company In The Caribbean.
Company Profile: Market/Stock Exchange: Trinidad and Tobago Company: Massy Group 2014 Businessuite Rank: #1 Chairman: Mr. Arthur Lok Jack Deputy Chairman and Chairman Designate: Mr. Robert Bermudez, President & Group CEO:
Mr. E. Gervase Warner
Address: 63 Park Street, Port of Spain Trinidad, West Indies Telephone: (868) 625-3426 Facsimile: (868) 627-9061 E-mail: nmh@neal-and-massy.com Website: www.neal-and-massy.com
Neal & Massy Holdings Limited (the ‘Company’) was incorporated in the Republic of Trinidad and Tobago in 1923. The Company and its subsidiaries, (the Group) are engaged in trading, manufacturing, service industries and finance in Trinidad & Tobago and the wider Caribbean region. At September 30, 2013, the Group
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is organised into six main business segments: 1 -Automotive & Industrial Equipment Business Unit 2 -Energy & Industrial Gases Business Unit 3 -Integrated Retail Business Unit 4 -Information, Technology & Communications 5 -Insurance Business Unit 6 -Other Investments
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2013 Key Financials: T T $'000 Revenues: Profits After Tax: Total Assets: Total Shareholder Equity:
%
9,391,521 610,518 8,869,109 4,025,472
Market Cap. (annual report date)
1,463,401 95,132 1,381,998 627,255
5,799,307
%
Pr ofit A fter T ax as a % of Sales: Assets: Stockholders' Equity:
$5.73
$0.89 18.00%
EPS % Change (from 2012):
What They Believe And Committed To Achieve in The Pursuit Of Opportunities Outside CARICOM. Arthur Lok Jack Chairman
The following edited extract was taken from the company’s 2013 Annual Report to shareholders. Businessuite Top 100 Caribbean Companies
903,657
6.50% 6.88% 15.17%
Ear nings Per Shar e Earnings Per Share
102
US$'000
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2013 saw Neal & Massy marking its 90th anniversary, a journey that began in 1923. Ten years later in 1933, responding to dire world economic conditions resulting from the Great Depression, and the promptings of shrewd local bankers, two entities concluded an historic merger, to form the holding company – Neal & Massy Engineering Company Limited with two subsidiaries – Neal & Massy Limited, and Tractors and Machinery (Trinidad) Limited (TRACMAC). Remaining extremely conservative for several years, this prudence served Neal & Massy’s purpose and helped the company survive. But it was not until 1977 when Sidney Knox
TOP 10 Caribbean Public Companies assumed leadership of the Group, that Neal & Massy made bold moves, achieving significant growth through acquisitions and entry into new markets. Under Knox’s leadership which ended in 1995, the Group acquired scores of companies and expanded into Jamaica, Barbados, Guyana and Suriname, morphing into one of the largest and most renowned conglomerates in the Caribbean. In the late 80’s and 90’s, Trinidad experienced its longest recession during which many high profile public companies either entered bankruptcy or were acquired. Neal & Massy survived and re-engineered itself under the leadership of Jesus Pazos who was appointed CEO in 1995. Neal & Massy, illustrating its capabilities to adapt to the prevailing economic conditions, saw Pazos moving quickly to divest the Group of many of the loss making subsidiaries, reduce debt and substantially strengthening the Group’s Balance Sheet. During the first decade of the 2000s with the Trinidad and Tobago’s economy emerging from recession, the Group, under Bernard DulalWhiteway’s leadership, enjoyed substantial growth with the attendant increase in shareholder value, thereby setting the stage for the prospects of the present. For Current Chairman, Mr. Arthur Lok Jack, Neal & Massy’s 90th anniversary presents an opportunity to reflect on that journey from 1923, and on the lessons derived and to use those lessons to guide the company’s steps over the coming years. Arthur Lok Jack a Non-Executive Director, was elected to the Board in 1998 and was appointed Chairman in
June 2004. He is also the Executive Chairman of the Associated Brands Group of Companies, Chairman of Guardian Holdings Limited and serves on the boards of many other Caribbean companies. He delivered the following report (edited for space) to shareholders at the Group’s 2013 Annual General meeting. “Despite the economic tightening of regional economies, the Group delivered yet another year of commendable results by improving and leveraging the synergies of our existing businesses in the countries where we operate. Sluggish growth of Caribbean economies has, however, made it imperative to continue pursuit of opportunities outside the CARICOM region.
Our Group has continued on a positive growth trajectory, recording $843 million in Profit Before Tax (PBT) and third party revenue growth of 3 per cent. The Group’s overall Earnings Per Share (EPS) increased by 18 per cent to $5.73. Our Automotive & Industrial Equipment and Insurance Business Units, and our Retail Line of Business performed exceptionally. Our Group of Companies also performed very well in Guyana. This was a particularly good year for our Automotive & Industrial Equipment Business Unit. Based on its consistent growth, we are confident that the introduction of motor insurance offerings from
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United Insurance will redound to the benefit of both our customers and our shareholders. Energy operations in our Energy & Industrial Gases Business Unit experienced a challenging year, and plans are underway to recover the profits lost mainly on sales and servicebased operations in this Business Unit. Our downstream sector project, a natural gas-based petrochemical complex in La Brea, a joint endeavour, with Mitsubishi Corporation and Mitsubishi Gas Chemical Company Inc, is well underway and is further detailed in E. Gervase Warner President & Group Chief Executive Officer’s Report. Despite operating in a constrained economy, our Barbados businesses grew in profits. Neal & Massy remains committed to the Barbadian economy and is doing its part to help to stimulate growth through investment. The Group made a major investment in its Warrens Super Centre store to add the Dacosta Manning’s household products, including furniture, electronics and appliances, to an expanded store, creating the country’s first ever supercombination store format. Additionally, Neal & Massy submitted an Expression of Interest for a renewable energy project that is being considered by the Government of Barbados. Favourable output in services, manufacturing, mining and agriculture contributed to the improvement of Guyana’s economy. Our businesses there delivered excellent results in 2013. To widen its customer base, the Guyana Group has done a remarkable job in leveraging the distribution networks of all the companies. Construction has already begun on a centrally-located warehousing facility for our distribution business.
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Plans are underway to extend our Retail Line of Business. For the Group, Guyana’s growing economy continues to provide a focus of keen investment attention.
It’s Now The Massy Group
The profit contribution from our Jamaica-based businesses declined by 24%. This was largely driven by the currency devaluation and underperformance of the NMH Trading & Distribution Ltd. operation. The Group continues to approach business in CARICOM with cautious optimism, giving due consideration to opportunities outside our traditional markets. To extend our Automotive and Information, Technology & Communication portfolios, we are pursuing investments in Central and South America. We have appointed a Country Manager for Suriname who has started exploring opportunities there, particularly in the energy sector.” Arthur Lok Jack Chairman
As shown, the Neal & Massy Group from inception has adapted and shifted its focus to ensure its existence. This year the Group went through another major transformation creating the MASSY Group as part of a group wide rebranding and repositioning exercise. On June 29, 2014 The Neal and Massy Group announced that it had changed its name to Massy as part of a comprehensive rebranding exercise that unifies all subsidiary companies to create a strong, consistent corporate identity. Redefining the corporate brand strengthens cohesion and clearly communicates the advantages of choosing to do business with the Group. The rebranding maximises marketing efficacy by powerfully connecting the equity of strong subsidiary brands with the corporate brand and vice versa. The new brand conveys the promise of reliability and value throughout the Massy range of products and services. The Group’s new strategic direction focuses on activating existing synergies that connect products to relevant services, and creating more efficient and cost-effective value propositions for consumers. These synergies are defined as ecosystems in the context of the Group. BM Note: Gervase Warner, President & Group CEO of Massy in an interview with the Trinidad Guardian’s Business Editor, Anthony Wilson, shared the rationale for the Massy re-brand. http://digital.guardian.co.tt/?iid=96661&startpage=124#folio=124
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T H E C ARIBBEAN RE G ION
The 2014 Regional Outlook Prospects For The Region Are Inextricably Linked To The International Outlook.
reconstruction efforts required in the wake of the Christmas Eve 2013 trough system that produced severe flooding in St. Lucia, St. Vincent and the Grenadines and, to a lesser extent, Dominica, should also lead to increased construction activity in these countries but put added pressure on the fiscal accounts to cover these unplanned expenditures.
G
lobal growth is set to accelerate from 3% in 2013 to 3.6% in 2014, according to the IMF’s April 2014 World Economic Outlook. The acceleration is expected to be accompanied by a rebalancing of the uneven performance of previous years. A firming of advanced economies is anticipated, with faster growth in the US and a return to growth in the Euro Area, which had slipped back into recession in 2012.
expected to grow by around 2.3% on average in 2014. Led by Guyana, Haiti and Suriname, growth is expected for all 19 BMCs, with most again set to grow by 1% - 3%. The recovery in regional tourism is expected to strengthen with the anticipated faster growth in the US and a return to growth in the Euro Area as well as expectations of improved airlift and reduced fuel costs resulting from further declines in commodity prices.
Continued strong growth is expected for emerging and developing economies, despite projected slower growth in China. In addition, further declines in commodity prices are anticipated.
Prospects for the region are inextricably linked to the international outlook. The region is therefore expected to grow by around 2.3% on average in 2014.
Prospects for the region are inextricably linked to the international outlook. The region is therefore
This recovery, together with global FDI growth projected at around 10% in 2014 should have further spin-off benefits for construction and other real sector activity. The recovery and
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While continuing to dampen growth prospects for the region’s commodity exporters, the projected moderation in global commodity prices should also ease domestic inflationary pressures. However, unemployment is expected to remain high in many BMCs, reflecting labour market rigidities and, in some cases, fiscal consolidation leading to cutbacks in public sector spending. Towards year end, Barbados announced plans for public sector lay-offs and/ or hiring freezes as part of its adjustment efforts. Grenada also announced plans to restructure its debt within the framework of an IMF-sponsored homegrown adjustment programme.BM (Source CDB Annual Report 2013 – Volume One Our Caribbean Economies And Global Context)
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T H E C ARIBBEAN RE G ION
Future Outlook How Business Leaders See 2014 And Beyond Barbados
While BHL’s financial position has strengthened with improving local operations, the Group’s overall results have not yet advanced and we expect 2014 to be even more challenging than 2013 in the local market. We have limited control over our associates’ results and hence management will continue to effect the measures identified to both increase the output of our plants while becoming more cost efficient. The Group’s overall results can therefore become more influenced by our own operations. Mr. Anthony King Chairman Banks Holdings Limited
As is well documented, economic conditions in Barbados and the other neighbouring territories in which we operate are very difficult, and we do not expect to see any rapid improvement in their fortunes. Indeed there is likely to be increased pressure on those businesses that rely on the domestic market. However, the generally brighter picture in our source tourist markets does give reason to believe that we will see an upturn in our main duty free business in the near future. Certainly if this materializes it will make a positive impact to our Groups’ financial performance. Our investments in Healthcare and Renewable Energy are two such projects, and we will continue our search for other areas which can contribute to earnings. It is our belief that this approach is the best way of positioning the Company for balanced, sustainable and profitable growth in the years ahead. Mr. R. Geoffrey Cave Chairman: Cave Shepherd and Company Limited
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As we become a more connected society, the need for increased broadband capacity becomes more apparent and it also serves as the means to remaining viable in the market. In view of this, our parent company has indicated a willingness to provide a significant level of funding to the business in the coming year to invest in upgrading our network and expanding our Fibre-To-The-Home (FTTH) reach. In addition to the retail stores, other departments in the business were restructured during the year as part of the cost containment strategy. Further cost control measures including better utilisation of our properties and reductions in our energy costs will be implemented in the coming year. Sir Allan Fields, KCMG Chairman Cable & Wireless (Barbados) Limited
Guyana
Gold mining is expected to continue playing an important role in the economy as production increased by 27% despite uncertain prices. The mining and quarrying sector registered an 18% growth rate for the first six months of the year and this trend is expected to continue on the back of ongoing demands from the construction sector and requirements for domestic infrastructure. The services sector which includes construction activities, distributive trade and financial services, among others, grew by 2.7%. This sector will continue to benefit from ongoing construction and maintenance of the country’s infrastructure, including road works on the East Bank and East Coast of Demerara and building activities in the new residential housing and commercial zones. This trend is expected to continue to year end and should translate to ongoing growth in the services sector. Nigel M. Baptiste Chairman Republic Bank (Guyana) Limited
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T H E C ARIBBEAN RE G ION
Trinidad and Tobago Outlook
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Having curtailed our noncore activities, your Board and Management are now focussed on growing our strong Pan-Caribbean insurance franchises. Mr. Arthur Lok Jack Chairman Guardian Holdings Limited (GHL)
“The global economy is strengthening gradually. However, the outlook is still uncertain and growth is at a slower pace than before the financial crisis. The local economy is slowly improving, driven by Government stimulus and a rebound in the nonenergy sector. The financial sector remains sound and well capitalized. Monetary and fiscal policies remain geared towards stimulating private sector credit.” Larry Nath Group Chief Executive Officer The First Citizens Group
With our strong brand, robust capital levels and our ability to leverage Scotiabank’s international capabilities, we are well positioned to navigate the business environment. As we approach our sixtieth year of operations in Trinidad and Tobago, we are optimistic about the future and our continued role in the development of this beautiful twinisland republic. Sylvia D. Chrominska Chairperson
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T H E C ARIBBEAN RE G ION
The recently concluded Port Rationalisation Study that was initiated by the Ministry of Planning placed into context the need for development, thereby ensuring Trinidad and Tobago’s relevance as a regional subhub. The report did not do a comparative site analysis of the proposed location for a third port at La Brea, or existing locations at Point Lisas or Port of Spain. What was further highlighted is that such a comparison would require substantial infrastructural analyses. Taking all the preceding into context, the Corporation will be proceeding with plans for development, thereby ensuring shareholder value is continually maximised. This will include the implementation of value-added services, such as bunkering and establishment of a logistics zone. These would further serve to diversify the Corporation’s revenue base as part of its medium to long term plans. Ian R. H. Atherly Chairman Point Lisas Industrial Port Development Corporation Limited
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Jamaica
Jamaica has successfully completed the first three quarters of the four-year IMF programme. In so doing several significant milestones were achieved, including: • A reformed tax system to improve the competitiveness of some sectors; • Considerable strengthening of the Fiscal Rule to enhance fiscal transparency and lock in the fiscal gains; • Much-improved fiscal accounts; • Considerable progress towards a more competitive exchange rate.
This success has come at a cost to the Jamaican consumer and there is still a long way to go to stabilise the Jamaican economy. Notwithstanding the long journey ahead of us, at Sagicor, our confidence has been bolstered and that is why we have made the decision to invest through the acquisition of RBC Jamaica for our shareholders and in the hotel business for our pension clients. We look forward to 2014 with cautious optimism. Richard O. Byles President & CEO: Sagicor Group Jamaica Limited
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“The trend in the major economic indicators all point to headwinds for businesses and consumers alike. Economic output continues to contract and with low confidence, consumers and businesses have shelved spending and investment plans. The pace of depreciation in the local currency is a major concern given the impact on inflation which has hit double digits despite weak demand. The primary focus in the current year will remain on fiscal prudence as this is critical to the success of the new IMF agreement. The successful completion of the IMF programme is important as it should help to correct some of the structural impediments to growth in the economy. That said, the government will have to maintain its austere stance in order to meet these quantitative targets, while ensuring adherence to deadlines for the structural benchmarks. Considering weak consumer demand locally and slower growth in the economies of our major trading partners, this will be a difficult task and the operating environment will remain challenging. There are opportunities for growth, however, in the medium term as global growth gathers momentum. This should result in positive pass through effects on key industries such as Tourism and Mining & Quarrying and help to alleviate some of the challenges currently being faced.” Patrick A. Hylton, CD Group Managing Director National Commercial Bank Jamaica Limited
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C o mm e n t a r y
Excellence at Work? Why organizations must deliberately set out to avoid mediocrity.
W
e have come to accept that a wellrun organization is one with a clearly articulated vision into which employees buy in. Employees know what is required of them, they are evaluated fairly and they are rewarded consistent with their performance. Sounds great for a conventionally managed organization but it do not guarantee excellence, as is now the major goal of highly progressive organizations. When excellence is the goal of the organization, it must deliberately set out to avoid mediocrity. It is therefore not enough to accept the best performances from individual employees. To do so could be accommodating average performers who are peaking at the limit of their capacities. Step number one therefore is ensuring that only employees with the capacity to deliver at the standard of excellence are recruited and who will only survive at a consistent level of high output. In all likelihood, your organization is not now configured to deliver excellence. The challenge therefore is to transform what you have into one with a culture of excellence. It is not going to be an easy task as the entrenchment of mediocrity in organizations is consistent with the wider society’s acceptance for that level of performance. It stands to reason therefore that one should expect stiff resistance both from within and outside the organization to any attempt to reorient to a culture of excellence. What does a culture of excellence looks like? Employees are convinced
that what they are working on is meaningful, significant and purposebased. This establishes the clear distinction between mediocre employees and those who operate at the level of excellence. It hardly matters to a mediocre employee the purpose of the task he is asked to perform. On the other hand, employees that are inclined to excellence must be convinced that there is great purpose to their work.
communicated to all employees. This approach creates an environment that is intolerant of mediocrity and one that supports the efforts of high performers. Challenging targets are set and employees being constantly driven to break records and achieving unprecedented results. This creates excitement among employees who naturally operates as a team that is focused on achieving a common goal.
When an organization finds itself highly focused on problem solving it could very well be rewarding mediocrity. Managers must avoid empowering low performers by spending too much time solving their problems while ignoring high performers. This approach alienates high performers who invariable leave for organizations that are more likely to recognize and reward them for their generally above par performance. Companies with a culture of excellence have expectations of high performance organization-wide. Employees are encouraged and supported to become masters in their role and area of expertise. High performers are challenged, nurtured, rewarded, mentored and recognized. Average performers are coached to move into the high performance category. In such a culture, there is no place for low performers. They must either move up or move out. The critical path to achieving a culture of excellence is not to settle for mediocrity. Mediocre performance levels are highlighted and scornfully rejected. The negative consequences to the organization for delivering at mediocre levels are clearly october 2014
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Ronnie Sutherland Ronnie Sutherland is proven visionary and strategic thinker that successfully formulates and execute business strategies that yield targeted growth in market share and profits. An expert in enhancing profitability; developing employees motivational initiatives, and leading the development of new market segments. Very knowledgeable of broadcasting regulations, manufacturing processes, distribution logistics and marketing operation. Dedicated to maintaining a reputation built on quality, service, and uncompromising ethics.
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THE ONE PLACE WHER CARIBBEANS TOP B
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www.businessu
RE YOU WILL FIND THE BUSINESS LEADERS
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