business@tribunemedia.net
WEDNESDAY, FEBRUARY 26, 2020
$4.52 DPM: New GB Power charge is ‘unavoidable’
K PETER TURNQUEST By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE deputy prime minister yesterday described Grand Bahama Power Company’s (GBPC) new Dorian recovery levy as “unavoidable” if electricity supply is to be restored to the entire island. Arguing that this “comes at a cost”, K Peter Turnquest, said: “Obviously any increase in any utility cost or tax is a concern to us as representatives as well as to the government. This, unfortunately, is one of those costs that I think is unavoidable. “The fact of the matter is we need to restore services to the entire island and that comes at a cost. We have had conversations with the power company since the storm as to how we facilitate this restoration and, unfortunately, this seems to be the only option that is available to us to ensure an efficient restoration of power. “It is important that we extend those power lines out to the east, because there are projects that are waiting right now to get started and to begin reconstructing and expanding in some instances. Again, while it is certainly regrettable, unfortunately it is necessary.” Mr Turnquest spoke out after GB Power unveiled the Storm Recovery and Stabilisation Charge that will be added to all customer bills with effect from April 1, 2020, as it seeks to recover the $15.6m cost associated with restoration of its uninsured transmission and distribution (T&D) infrastructure. Dave McGregor, the utility’s chief executive, argued that the additional levy on consumers was the most transparent and “fairest way” to achieve its objectives since it will act as a ‘pass through’, much like the fuel charge, from which GB Power will not earn a single cent in profits. “We don’t profit from this,” Mr McGregor told Tribune Business of the new charge. “This will be a direct pass through like the fuel charge is. The only alternative is to build this into the rates, but when there is no hurricane we end up making money. “We feel this is by far the fairest way for customers to pay for the hurricane. The hurricane needs to be paid for, and the best way is to pay through the customer. It will be a separate line on the bill, a separate charge.”
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Correction YESTERDAY, we published a story headlined “Treasury holds event for accounting officers”, which included a picture of assistant treasurer Donna Delancey. It was incorrectly captioned Mary Mitchell, who is the treasurer. We apologise for the error.
$4.54
$4.45
‘Holding the bag’ on 50% sales fall
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A BAHAMIAN plastics product supplier yesterday said pleas for government assistance have not been answered as it prepares to terminate more staff following a 50 percent sales slump. Louise Munroe, owner of Plastic Property Ltd, told Tribune Business her business is in “a total mess” due to the 25 cents to $1 per bag charge imposed on consumers who purchase single-use plastics prior to the full ban taking effect from July 1, 2020. With Bahamians having emphatically rejected the fee, she explained that the wholesale company has literally been left “holding the bag” because retailers
• Plastic supplier’s pleas get no answer • Bag fee leaves business ‘in total mess’ • New staff cuts loom; call for taxes return
are refusing to order any from her given virtually zero demand. As a result, Ms Munroe said the loss of her previously “number one product line” has already caused the termination of two staff from Plastic Property’s ten-strong workforce, with a further two lay-offs imminent. With her calls for the removal of the plastic bag fee seemingly falling on deaf ears, she added that “the worst thing” about the company’s situation is that it has already paid VAT and import tariffs to bring in inventory that it cannot move. While acknowledging
the need to safeguard The Bahamas’ environment, Ms Munroe argued that other countries - such as the UK and Canada - had introduced the single-use plastics ban gradually and in such a way that it gave companies in the sector sufficient time to adjust. She asserted, though, that Plastic Property Ltd was being asked to “change a 22 year-old business model in just 12 months” - something she described as “just ridiculous”. Despite urging Romauld Ferreira, minister of the environment, to eliminate the minimum 25 cent per plastic bag fee during a Rotary
A FORMER Immigration minister yesterday argued that many Bahamians simply fail to take advantage of available employment opportunities because “their work ethic is bad”. Branville McCartney, the ex-Democratic National Alliance’s (DNA) leader, told Tribune Business that the prime minister’s floated solution for better skills/knowledge transfer between expatriate hires and Bahamian understudies was “good in theory, but very difficult in practice”. Responding after Dr Hubert Minnis suggested that expatriate workers should be replaced by other foreign hires should they fail to properly train a Bahamian replacement before their visa expires, so as to prevent them establishing long-term “roots” in this nation, Mr
BRANVILLE MCCARTNEY McCartney reiterated that any “understudy” policy should be applied on a caseby-case basis rather than across-the-board. Pointing to numerous “intricacies”, not least the cost to Bahamian employers from having to cover two salaries and uncertainty over whether understudies will
Labour specialist: to discuss ‘good understudy ideas’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
see them for one week, they get paid, and then you don’t see them because they call on sick or they’re in Miami. “The work ethic is, and has been, for Bahamians simply bad. I am a proponent of Bahamians first, Bahamians having opportunities, but we also have to be realistic about the situation, where we are, and you hardly get anything done in your business or profession depending on what your call is, when you have Bahamians who don’t want to work,” he continued. “They want a job, they want to get paid, but they don’t want to work. I am involved in many businesses, and see it every day. What the prime minister is saying is
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meeting last month, Ms Munroe told this newspaper: “I have not received any relief at all. No one has been in contact with me. I’m now trying to figure out what to do. This is quite a big issue and challenge for my business that I’m going through. It’s very bad.” Revealing that Plastic Property Ltd is currently holding 200,000 single-use plastic bags it cannot move, she added that she has not counted the other banned products also held in inventory - such as styrofoam plates and cups. Despite reducing orders
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• Not enough exploiting job opportunities • Understudy plan can’t be ‘hard and fast’ • But review expat permit holder businesses “stick it out” through their probationary periods, the former immigration minister under the last Ingraham administration warned a “hard and fast” application could unduly burden the private sector. “The main reason persons are hiring foreigners is because we don’t have persons here to do the job. Let’s be real,” Mr McCartney told Tribune Business. “It also applies to the likes of gardeners and handymen. I understand what the prime minister is saying about giving Bahamians opportunities but unfortunately they don’t take the opportunity. “They don’t want to be handymen, they don’t want to be gardeners and they don’t want to be housemaids. You
PETER GOUDIE
THE Chamber of Commerce’s top workforce specialist yesterday said he plans to discuss “some good ideas” for solving the government’s understudy issues when he meets its labour chief next month. Peter Goudie told Tribune Business he wanted to create “dialogue” with John Pinder, the director of labour, on ways to resolve the training of Bahamians to take over from expatriate workers through the transfer of knowledge and skills. The initiative was given further impetus by the prime minister’s closing mid-year budget address on Monday, during which he suggested that expatriate workers who failed to adequately train Bahamian understudies to replace them before their permits expire should be replaced by new foreign workers to prevent them establishing long-term roots in this nation. “I’m having a meeting with John Pinder soon about all this and some ideas I have,” Mr Goudie said. “I want to have a dialogue with him. We need to talk about this stuff. There are other ways to do things. One opinion is not necessarily the right one, which is why I want to have dialogue with the director of labour. The minister [Dion Foulkes] knows I’m going to talk to John. “I think we’ve got some good ideas about how to solve the issue of understudies. I have some ideas and I think they’ll like them. It’s something that I think is more palatable and achievable.” Mr Goudie said his meeting with Mr Pinder, which is scheduled for the second week in March, comes after the understudy issue was discussed at the last meeting of the National Tripartite Council, the joint
Bran: Bahamian ‘work ethic is bad’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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Activists blast GB Power’s storm levy ‘total disregard’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ACTIVISTS yesterday blasted the addition of a Dorian restoration charge to all Grand Bahama residents’ electricity bills as showing “complete disregard and great insensitivity” for the island’s plight. Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC), told Tribune Business that storm-battered consumers and businesses “cannot bear” the additional levy that Grand Bahama Power Company has described as essential to recovering $15.6m worth of post-Dorian infrastructure repairs. The utility monopoly reiterated yesterday that the Storm Recovery and Stabilisation Charge will only increase consumer bills by an average one cent ($0.01) per kilowatt hour, but Pastor Victor said this would be of little comfort to residents given that energy costs were already high prior to Dorian. Given that Grand Bahama residents and businesses did not own the
• Consumers, businesses ‘cannot bear’ fee • Argue utility, Emera should foot $15.6m bill • Renew call for URCA to take on regulation transmission and distribution (T&D) infrastructure whose rebuilding will be financed by new charge, he argued that GB Power and its 100 percent owner, Canadian utility giant, Emera, should instead take responsibility for funding the repairs - particularly given the latter’s deep pockets. Pastor Victor also slammed the seeming rush to introduce the new charge, which will be added to all Grand Bahama consumers’ bills from April 1, without undertaking a full public consultation exercise to obtain feedback from residents and the private sector on the likely impact. He added that the episode further highlighted the need for the Utilities Regulation and Competition Authority (URCA) to take over supervision of GB Power and all other Freeport-based utilities from the Grand Bahama Port Authority (GBPA), along with the introduction
of energy sector competition - especially in the island’s west and east, and outside the Port area. “It is absolutely - I don’t know if I should use the word unconscionable - for an increase to be put on an island still recovering, and which will probably be recovering for several years,” Pastor Victor told this newspaper of GB Power’s action, which has been approved by the GBPA as its regulator. “It just shows great insensitivity to the economic situation in Grand Bahama. We’re, the coalition, totally against it. There should have been a way to deal with this apart from increasing customer bills. Those bills are already high, and now they’re going to put an increase on the population? It is completely not right. “I can safely say the population of Grand Bahama is against it. Even as a pastor, I work with a network of 140
pastors on this island, and they’re all totally against it. It just brings to bear the need for an independent regulator, such as URCA, to be active on the island.” Dave McGregor, GB Power’s chief executive, admitted in an interview with Tribune Business that the additional consumer charge would “not be an easy sell” amid the slow post-Dorian recovery but argued that it was “the fairest way for customers to pay” for the damage inflicted upon its uninsured transmission and distribution network. He explained that the new levy will act as a pass through, much like the fuel charge, and that GB Power will not earn one cent in profit from it. This, Mr McGregor, would not be the case if the fee was incorporated in GB Power’s existing tariff structure, as it would add to the utility’s bottom line in years when
no hurricane occurs. Explaining that the fee had been calculated to spread the $15.6m Dorian cost recovery over five years, thereby minimising the rate impact for Grand Bahama residents and businesses, Mr McGregor said the reliability and price predictability that GB Power has created since 2013 “needs to be paid for” - especially when the $27.5m repairs from Hurricane Matthew are factored in. Pastor Victor, though, yesterday questioned why GB Power was seemingly in such a rush to introduce the levy just seven months after Dorian hit the island. He also queried why it had not given customers more advanced warning and a full explanation. “It shows complete disregard for the economic condition on the island,” he slammed. “The other side of this is that they’re saying the cost of living is going to increase further on the island. We already have a high cost of living on this island, and they’re increasing it more.
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THE TRIBUNE
REALTOR HAILS END TO SECTOR’S ‘PRIVATE CLUB-LIKE ATMOSPHERE’ A TEN-time Bahamas Realty top performer has praised the firm’s former chairman for driving a solution that broke up “the private club-like atmosphere” in the industry to the benefit of all. Stuart Halbert, who has attained that honour ten times in the last 18 years, said Larry Roberts’ consistent advocacy for the Multiple Listing Service (MLS) has helped transform
the real estate sector and create the platform for himself and other agents/brokers to thrive. “It is an honour to be named number one in a dynamic company like Bahamas Realty for the 10th time in 20 years, but the real honours in real estate should go to Larry Roberts (now retired) who fought for so many years to introduce the MLS (Multiple Listing Service) that revolutionised
the industry as a whole,” Mr Halbert said. “Before MLS, associates and brokers would battle for exclusives, keeping information about a listing from being publicly viewed easily... It was Roberts who, in effect, knew that the future of real estate in this country would be better served by breaking up the private club-like atmosphere of a few firms. He had to battle tooth and nail
with some, but today no one would turn back the clock. “So when I receive an award, I always think it is he who helped to make the current real estate environment in The Bahamas what it is, and who helped make Bahamas Realty one of the anchors of that environment.” The term “exclusive” in today’s real estate language refers to the right to market, stage and host events, but does not limit who can receive information. The MLS allows all licensed realtors and firms to post residential or commercial inventory listings as quickly as they come in to one agent or broker, enabling the industry to share information and better match buyers and sellers. Donnie Martinborough, Bahamas Realty’s chief executive, echoed Mr Halbert’s sentiments about the importance of a co-operative industry where co-broking - rather than hoarding - a listing is the accepted way of doing
business. “It is just like Stuart to turn the attention on someone else,” he added. “We are all so proud of his accomplishments. Part of the secret of his success is hard work, but a large part is his humility. He probably did not mention that about 70 percent of all his transactions are clients he has worked with before who have come to trust him and won’t look anywhere else.” Mr Halbert, also named top exclusive listing agent in 2019, said several factors are contributing to a buoyant Bahamian real estate market. “We are experiencing an upswing in the world’s largest economy, which sits 50 miles off the shore of The Bahamas,” he explained. “Locally we are enjoying competitive bank rates with more liquidity in the market. “Against that positive backdrop, the ability to market properties effectively with drone footage and Matterport tours is the best it has ever been. Despite the effects
ADVANCES in real estate marketing have created a more equitable playing field, says industry veteran Stuart Halbert, who has become Bahamas Realty’s top performer among non-directors at Bahamas Realty for the 10th time in a 20year career. of Hurricane Dorian that devastated two islands severely, The Bahamas remains one of the most highly desirable places to live, work and play in the world.” Mr Halbert also credited Baha Mar and The Pointe developments for revitalising high-end residential leases and sales. He added that if there is any real estate segment needing further development it is commercial, and every level - from warehousing to Class A office space.
SECURITY FIRM CHIEF CALLS FOR INCREASED VIGILANCE A PRIVATE security company’s chief executive is urging residents to increase their vigilance and minimise risk following a recent surge in break-ins impacting gated communities across Nassau. Elston Bain, a 16-year Royal Bahamas Police Force veteran, called on inhabitants of these communities to be aware of their surroundings following a series of thefts that have been reported in recent weeks. “Living in a gated community definitely adds a sense of security and comfort, particularly for families with young children who feel their young ones are safer playing outside, but those security gates are no guarantee against the criminal or criminals determined to do harm,” said Mr Bain. “It is a sad state of affairs, but when you combine certain factors including a breakdown in the social fabric and high youth unemployment, property crimes increase. As the fear of crime escalates, security gates at entry points of a community, and security cameras that capture activity around a residence, become less of a luxury and more of a standard expectation. “They are all integral to a sense of security, yet the single best weapon in anyone’s arsenal of personal protection is
ELSTON N BAIN, chief executive of Tactical Private Investigators. still utilisation of your senses, including common sense. First, always be aware of your surroundings, almost as if you had to take notes on it. Be alert and watch activity around you. Heed the advice of law enforcement. It may sound boring and old, but no tool has ever compared to your own two eyes.” Mr Bain, who worked in cyber and white collar crime for a large property after leaving the police force in 2012, said there are several practical tips that cannot be overlooked. “Even entering your car, wait until you are nearly ready to hop into the driver’s seat before clicking the key to open the door. It only takes a second for someone with the wrong intention to hear the sound, see the flash of headlight and slide into the back seat while you are still
COMMONWEALTH OF THE BAHAMAS IN THE SUPREME COURT Common Law & Equity Division BETWEEN
approaching the vehicle,” he said. He added that when driving through an electronic gate, pull forward and watch the gate close before proceeding to your residence. It is easy for a second car to follow on the sensor footprint you created. Most gates close in 20 seconds. Mr Bain, who is trained in weapons, fraud investigations, covert surveillance and risk assessments, opened Tactical Private Investigators to provide a range of services including personal security. He saw that as a growing need with most security firms focusing on staffing guard stations or after-hours property protection. “Nothing would give those of us in law enforcement, on the force (RBPF) or off, more pleasure than a world without criminal activity,” said Mr Bain. “Unfortunately, that is not the case, and everyone has a responsibility to observe, or to participate in, a neighbourhood watch group even on Whats App, and to call CrimeStoppers, 919 or your local police station when you see something suspicious. If everyone heeds the adage, ‘See something, say something’ we will all be part of the solution and reduce the fear of crime in The Bahamas.”
2019/CLE/qui/01383
IN THE MATTER of Quieting Titles Act, 1959 AND IN THE MATTER OF the Petition of Joseph Bain AND Schedule ALL THAT piece parcel or acreage of land containing 2.83 Acres and situate approximately 1,200 feet Northeastwardly of Behring Point Bridge in Behring Point in Andros one of the Islands of the Commonwealth of The Bahamas and which said piece parcel of land has such position boundaries markers and dimension shown on the Plan coloured Pink. NOTICE JOSEPH BAIN, the Petitioner claims to be the owner of the piece parcel or acreage of land hereinbefore described and has made application to the Supreme Court of the Commonwealth of The Bahamas under Section 3 of the Quieting Titles Act to have the title to the said piece parcel or acreage of land investigated and the nature and extent thereto determined and declared in a Certificate of Title to be granted by the Court in accordance with the provisions of the Act. Copies of the Plan showing the position boundaries and shape marks and dimensions of the said piece parcel or acreage of land may be inspected during normal working hours at the following places:(1) The Registry of the Supreme Court, British American Financial Building, George Street, Nassau, N.P., The Bahamas (2) The Office of the Administrator, Fresh Creek, Andros; and (3) Trinity Chambers, Norfolk House, Frederick Street, Nassau, N.P., The Bahamas. Notice is hereby given that any person or persons having a right of Dower or an adverse claim not recognized in the Petition shall within thirty (30) days after the appearance of the Notice herein file in the Registry of the Supreme Court in the City of Nassau aforesaid and serve on the Petitioner or the undersigned a statement of his claim in the prescribed form, verified by an Affidavit to be filed therewith. Failure of any such person to file and serve a Statement of Claim within (30) days herein will operate as a bar to such claim. Dated this 10th day of February, A.D., 2020 Trinity Chambers TRINITY CHAMBERS. 1st Floor, Norfolk House Frederick Street Nassau, N.P., The Bahamas Attorneys for the Petitioner
THE TRIBUNE
Wednesday, February 26, 2020, PAGE 3
INSURERS IN CALL FOR ‘LONG- JOBLESS BENEFITS SOUGHT BY 2,600 DORIAN VICTIMS TERM’ NHI FRAMEWORK By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net PRIVATE sector insurers yesterday urged the government to set out “a long-term framework” for a National Health Insurance (NHI) scheme that has had little impact on their business to-date. Sandy Morley, the Bahamas Insurance Association’s (BIA) deputy chairman, told Tribune Business: “As it stands now, as it’s structured now, there has been little to no impact on private insurers.” As to the future effects, he added: “I’m not sure. I think until we are clear on the direction that NHI is going we are not able to determine that. The last directive they outlined was the employer mandate. “Again, there could be some impact there but we are not sure whether that’s the same model that they are going to be coming with. So we are not in a position as an industry to determine the impact that would be felt in the near term.” The initial plan, as outlined by the NHI Authority’s website, called for “the establishment of an employer mandate that will require businesses and employees to share the cost of the standard health benefit (SHB) premium – with some exemptions outlined in a policy paper dedicated to it. “It is estimated that employees will pay two percent of their salary to a maximum of $42 per month, with the employer paying the remainder of the premium. The employer mandate will be phased in, starting in January 2021, for businesses with over 100 employees, then eventually will be expanded to include all employers over the coming years. Employers will be responsible for providing the SHB to full-time and part-time employees working over 15 hours per week.” The website added: “Under the new model, the NHI Authority will act
as the public payer, focused on helping those who do not fall under the employer mandate, including children, retirees, non-working spouses and unemployed persons. “Moving away from a single-payer model to a shared responsibility with a single pricing approach will make NHI Bahamas more affordable and sustainable, and aligns with the Government of The Bahamas’ commitment to fiscal responsibility.” Mr Morley yesterday called on the NHI Authority to “present a long-term framework for NHI,” something it has not done to-date. He added: “I think in the last press release they said they are putting a system in to track medical records, so they are doing some things I think to support NHI as it stands now. “They have about 70,000 persons registered. Those would not be our clients that are currently registered, so the impact now is negligible to none. Of course, until we are clear on the framework and the way forward, I am not sure we can determine what the impact is going to be.” The NHI Authority earlier this month unveiled its electronic health record (EHR) system. This is designed to move the scheme to paperless management of client treatments and records, along with service provider information, and also to ensure patient records can be seamlessly transferred between different doctors. Mr Morley said the “next step” for the NHI Authority is to “clearly outline for the nation at large” what its next steps are, and the respective timelines that are to be met. “The employer mandate was laid out about a yearand-a-half ago, and should come into effect in 2021. Based on what I understand, because of Hurricane Dorian funding was not provided, and so it was delayed. Until we are able to have that resolved we just don’t know,” he added.
BISX LISTING ‘MAJOR PART’ OF MUTUAL FUND OFFERING A BAHAMAS-based fund administrator, which has sponsored 45 percent of the funds listed on this nation’s stock exchange, says being able to provide this is “a key component of our offering”. Ivan Hooper, The Winterbotham Trust Company’s chief executive, highlighted the value created by the Bahamas International Securities Exchange (BISX) as his firm brought another investment fund listing to it. The BB Global Fund has been added to the roster of funds listed on the exchange after it completed BISX’s mutual fund listing process. The fund is an open-ended mutual fund with subscriptions and redemptions carried out by Winterbotham as the fund’s administrator. It is incorporated as a Bahamian International Business Company (IBC), and licensed under the Investment Funds Act 2003. “We continue from a very successful year, sponsoring close to 30 funds, with our first listing for 2020,” Mr Hooper said. “This time by sponsoring BB Global Fund, a fund with UCAP Bahamas as investment manager, and with the objective of seeking longterm capital appreciation. “This continues the importance managers are giving to listing their investment vehicles. UCAP Bahamas, is a great example of such a manager. As the largest fund administrator by number of funds in The Bahamas, and the largest sponsor of listed funds with over 45 percent of funds listed on BISX, listing with BISX has become a key component of our offering and a key enhancer in our ability to attract funds to The Bahamas.” Keith Davies, BISX’s chief executive,
KEITH DAVIES added: “Our goal for the exchange is the continued growth of our mutual fund facility. This goal, along with Winterbotham’s desire to offer value-added services to clients, is what allows BISX’s mutual fund facility to expand. “It is our pleasure to review, approve and list the mutual funds brought to us by Winterbotham and our other sponsor members. We encourage them to continue meeting their clients’ needs with value additive services such as fund listings on BISX.” The Winterbotham Trust Company served as the BISX sponsor member that brought the latest fund to the exchange. The Winterbotham Trust Company Limited has been appointed to serve as the administrator of the fund. The latest addition comes as BISX confirmed the delisting of five other investment funds. They are the UCAP Asia Fund Services LTD SAC; the Oil & Gas Opportunity Lending Fund; the Lewisham Investment Fund; the Joint Innovations Fund; and the 3PS Investment Fund IC.
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By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE government’s top labour official yesterday said 2,600 persons have claimed unemployment benefits due to Hurricane Dorian but that number has tapered off since year-end. John Pinder, pictured, director of labour, speaking to Tribune Business after the prime minister confirmed that an extra $11.4m is being allocated to
persons left jobless as a result of the storm, said the number of Abaco and Grand Bahama residents seeking such assistance is dwindling. “They are not coming in mass numbers any more,” he said. “There were about 2,600 persons in total, and we haven’t seen any added to that number since that closed-off at the end of the year. “Once they get an unemployment certificate, they
continue to get unemployment benefits until they find employment, and that is normally for 13 weeks. The government is now extending that an additional 13 weeks to 26 weeks.” Dr Hubert Minnis, in his presentation to Parliament on Monday, said: “My government also ensured that hurricane victims were able to access cash resources to begin restoring their lives. “One of the ways we accomplished this objective was by facilitating the expansion of the National Insurance Board (NIB) unemployment benefit
from 13 to 26 weeks.... The government’s allocation of an additional $11.4m toward this initiative means that eligible victims who lost their jobs as a result of the hurricane can continue to receive financial support for a longer period.” Mr Pinder, however, reiterated that the number of Dorian victims claiming unemployment benefits has decreased since last year. He said: “There was an approximate 2,600 persons that registered for the unemployment benefit through the Labour Department.”
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THE TRIBUNE
‘Holding the bag’ on 50% sales fall FROM PAGE ONE from overseas suppliers for the six-month transition period prior to the full ban’s implementation, Ms Munroe said she and the Bahamian merchants she supplies - the likes of Super Value, Budget Foods and Exuma Markets - had vastly over-estimated the willingness of consumers to pay the plastic bag fee. “People have totally rejected the 25 cents,” she added. “I shopped for groceries this week and no one is buying those bags. Budget Foods don’t even take my calls. They say they cannot order them because no one is buying. “I was probably the number one supplier of plastic bags on the island. Bags were my number one product. Because of the ban total sales in my business are down by 50 percent. I’ve already laid-off two staff and am about to lay-off two more because it’s really affecting the business. It’s quite bad to tell you the truth.” Ms Munroe said she was especially upset that Plastic Property had already paid significant import taxes on product it will likely be unable to sell. “The government has done nothing to assist,” she blasted.
“The worst thing about this is we have already paid all the duty and taxes on the product that is sitting there; 45 percent duty on bags that they increased six months prior to the transition period. They increased the biodegradable duty from five percent to 45 percent. “If you’re going to shut us down, give us the tax back. You’re squeezing me even more. Is it the government’s policy to not only shut us down but to take the money from us when we’ve paid duty and VAT on those products?” Ms Munroe continued. “They said they would give us six months to get rid of it, and they put 25 cents on it. How do you expect is to get rid of it if nobody is buying from us? It’s a total mess. Not good at all. This is just total inconsideration for someone in business for 22 years, and it’s not affecting just me but the end user. This is not the way to go.” Mr Ferreira could not be reached for comment yesterday. However, in responding to Ms Munroe’s complaints at last month’s Rotary meeting, he argued that more than-adequate warning had been given of the government’s intentions since its 2017 election manifesto pledged to ban
single-use plastics by 2020. He added that the first public meeting was held on the matter in July 2018, and an “aggressive marketing” campaign had been waged ever since through billboards and other mechanisms to allow Bahamians to “get your house in order”. However, Ms Munroe argued that while the environment was important The Bahamas is facing “far more serious issues in this country than plastic bags”. She added that other countries had eliminated single-use plastics through a much more gradual phase-out approach lasting three years. “We accept the environment is important and we need to cut back,” she told Tribune Business, “but this is not the way to handle the situation. It’s poor on the government’s part. It’s like a slap in the face and I’m so disappointed in this government. It’s like almost saying: ‘Give up on your dreams, we don’t care’. “They’ve just shattered someone in business for 22 years. They’re asking me to change a business model in 12 months after 22 years of building it up. This is just ridiculous. It’s not been done properly. He who knows it, feels it, and I am feeling it. That’s very sad.”
DPM: New GB Power charge is ‘unavoidable’ FROM PAGE ONE
“It will pay off Dorian’s $15.6m, and this will be paid off in five years assuming the load comes back the way we hope. “After that, subject to the approval of the Port Authority, we will continue with the charge at a slightly lesser rate so that we save for future storms. That’s the philosophy. It’s not an easy sell. It’s tough times for all of us. But we spent the money and need to get it back.” The charge for GB Power’s three customer categories will be: • Residential - $0.013 cents per kilowatt hour (kWh) or 1.3 cents
Labour specialist: to discuss ‘good understudy ideas’ FROM PAGE ONE
private sector-union-government body that deals with all labour-related matters in The Bahamas. The chamber’s labour head declined to detail what he plans to discuss with Mr Pinder, but in a previous Tribune Business interview said he had been working up ideas centred around Bahamians going to other countries to train. “I found when I was the head of human resources for a major regional bank that Bahamians are very reluctant to move overseas, and that is how you really get expertise; not just by understudying someone,” he told Tribune Business. “We need to go
• Commercial - $0.008 per kWh or 0.8 cents • GSL (industrials) $0.010 per kWh or one cent It will represent an increase of less than $7 per month for the “average” residential customer, and $24 for the “average” business customer, in a bid to soften the upcoming blow and any consumer push back/fall-out. Mr Turnquest, meanwhile, said the government and private sector needed to examine “risk mitigation strategies” and “ensure that we spread this risk over a period ,and not just after an event.” He added: “That we build more resilient so that we can deal with these storms that are predicted to be everincreasing and frequent and, again, spread the risk a little bit more so it doesn’t become such a burden after an event, particularly when people are suffering as we know.”
When asked how GB Power’s extra charge will be monitored, Mr Turnquest said: “The Power Company in its statement has said that this is specifically for hurricane recovery costs, so we certainly will expect and hold them accountable to that statement. This is not a profit-making fee; this is to recover the cost of reconstruction. So we will hold them to that as we go forward. “I fully anticipate that once they have gotten the recovery estimate that they said was about $15m or so, once they have accounted for that they will in fact roll back that fee. That $15m is not only covering the cost of the extension or reconstruction of power lines to the east, but also the restoration that had to happen within the city of Freeport, which was also significantly damaged.”
forth into the world to learn. That’s how a lot of expatriates who are here got their expertise, and Bahamians are reluctant to do that. “We’ve put together a proposal where the understudy needs to go to other countries to gain experience. It took me years and years to get the experience I did when I headed up human resources for the region. You’re going to give me someone in three years’ time who has my experience? It’s not going to work. “We’re going to propose a plan to get Bahamians to go overseas and gain that type of experience, and then come back and take over. That’s the gist of it. It’s much deeper than that. But you can’t just learn from somebody; you have to experience that yourself, and you can’t get that by staying home” Mr Pinder has previously said that work permit approvals will be directly linked to
the employer identifying a Bahamian understudy and putting in place an appropriate training programme to enable them to replace the expatriate hire. It has always been the policy that Bahamian employers needed to name an “understudy” to take over from an expatriate hire when applying for a work permit, but this has never been fully enforced as the government simply lacked the necessary manpower to do so. However, the initiative was given fresh impetus this week by Dr Hubert Minnis who hit out at expatriate work permit holders who failed to train Bahamians to replace them, yet remained in this nation for years, taking jobs away from locals. He said employers would have to bring in fresh expatriate hires if work permit holders failed to train Bahamian replacements by the time their visa expires.
THE TRIBUNE
Wednesday, February 26, 2020, PAGE 5
Bran: Bahamian ‘work ethic is bad’ FROM PAGE ONE excellent, very good in theory, but very difficult in practice to put into place. It has to be done on an individual, case-by-case basis.” Mr McCartney’s remarks are likely to cause controversy, especially among Bahamian workers who allege that they have been overlooked for a position they are qualified to fill because expatriate labour is considered cheaper. University and college graduates, too, returning home from overseas often argue that they find it difficult to land an appropriate job because they are deemed to be “over-qualified”. Some observers will also argue that understudy initiatives in other countries have worked well, and there is no reason why The Bahamas cannot follow suit. Dr Minnis’ comments were a variation of the theme recently voiced by John Pinder, director of labour, who said work permits will not be issued unless employers have identified a Bahamian understudy and are providing the necessary training. The “understudy” idea has always been a government policy but it has rarely been enforced. Many Bahamians will likely be watching closely to see whether the prime minister’s House of Assembly rhetoric translates into action or is just part of election campaign talk, with online response on this newspaper’s website currently veering towards the latter. And Mr McCartney’s comments will also strike
a chord with the view that many Bahamians see jobs such as gardeners, handymen and maids as ill-paid and beneath them, resulting in them refusing to take the work even if it is available and they need it. The vast majority of work permits issued by the Department of Immigration are for such posts. “The thought of having that policy is good,” the ex-DNA leader said of Dr Minnis’ assertion, “because we want Bahamians to have opportunities to take advantage of certain circumstances, but the reality is that it has to be done on a case-by-case basis. “The suggestion of having an understudy has been around for some time, but to put it into practice very difficult. Not only difficult but expensive. It calls for Bahamians who are willing to understudy, and to stick with it and work, and be committed to it. “It also calls for the employer to be in position not only to hire the expatriate but an understudy. That calls for two salaries. In addition to that, there’s no telling whether or not the Bahamian will continue beyond the understudy period. The intricacies are very difficult, very technical. It can be another burden to the businessman.” Mr McCartney said the retail pharmacy business, in which has family is invested, has struggled with a shortage of trained Bahamian pharmacists for years. Work permits for expatriate hires now stand at $9,500 per annum, and implementation of the understudy policy would create the need for an extra Bahamian
worker in addition to the salary and benefits they will demand. “It cannot work straight across the board,” the ex-Immigration minister reiterated. “That’s what the Immigration Board is for: To consider each case individually. We cannot be so hard and fast, determined to say this is the policy and no exceptions. “A lot of these Immigration matters and policies are very good in theory, but when they are implemented in practice you’ll see there are intricacies to each one and we have to look at them on a case-by-case basis.” Mr McCartney, though, said the prime minister’s concerns about expatriates who entered The Bahamas on work permits or as subcontractors, only to establish their own businesses here some of which are in sectors reserved for Bahamian ownership only by the National Investment Policy - was a different matter. He said such ventures should be judged on their economic and employment impact, and whether they were needed for national growth and development or not. “That’s something slightly different and to be looked into,” Mr McCartney added. “If the business is something we need in this country, it must be considered. “We’ve seen that over the years in the construction industry, directly or indirectly. They come over, work on these hotels and then start owning their own construction business. It’s a question of whether it’s something we need or are trying to develop. That’s how countries grow. If it’s something we don’t need it must be reviewed.”
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PAGE 6, Wednesday, February 26, 2020
THE TRIBUNE
Activists blast GB Power’s storm levy ‘total disregard’ FROM PAGE ONE “Our position is that no increase is what is needed because the island cannot bear it now. You’re going to bring what you say is a modest increase when we cannot bear the prices as they are now.” Pastor Victor added that he was personally without power for three weeks last
September post-Dorian. Yet he said his bill for that month was “higher than for other months” after GB Power estimated consumption. Arguing that “this makes no sense”, the Coalition chief said Emera and GB Power - rather than their customers - should be responsible for financing the repairs. “We’re totally against
any increase. Period. The economy cannot bear it, the people cannot bear it,” Pastor Victor said. “The owner needs to bear the cost. The T&D infrastructure is not owned by the public; it is owned by a private corporation that is not Bahamian. “It’s a foreign company that owns the infrastructure on our island. Therefore
they are providing a service and are responsible for their equipment. To say we must foot the bill for repairs should mean we own the infrastructure but we don’t. As a private company they should absorb all the expenses to ensure their infrastructure holds up.” Pastor Victor said the current situation could be traced back to the early
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ALL SHARE INDEX: CLOSE: 2,205.34 | CHG: 3.46 | %CHG: 0.16 | YTD: -26.26 | YTD%: -1.18 BISX LISTED & TRADED SECURITIES 52WK HI 4.45 22.65 7.00 6.70 2.60 2.00 5.47 12.77 6.17 4.50 10.84 3.64 5.10 10.88 8.00 16.99 9.40 3.80 15.20
52WK LOW 3.35 20.91 5.50 5.38 1.77 0.67 2.00 9.91 5.60 3.95 6.10 2.53 1.76 8.00 6.40 14.00 6.80 3.01 13.85
SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Class A Focol Class B
CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
PREFERENCE SHARES
1.00 10.00 1.00
1.00 10.00 1.00
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
SECURITY Fidelity Bank Note 22 (Series B) +
SYMBOL FBB22
Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y
BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
LAST CLOSE 3.50 17.43 6.00 6.68 2.10 1.62 3.53 11.61 6.00 4.33 6.10 3.60 5.06 11.09 8.00 15.05 9.33 3.50 15.20
CLOSE 3.50 17.43 6.00 6.68 2.10 1.62 3.21 11.61 6.00 4.33 6.10 3.49 5.08 10.97 8.00 15.08 9.33 3.70 15.20
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 -0.32 0.00 0.00 0.00 0.00 -0.11 0.02 -0.12 0.00 0.03 0.00 0.20 0.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
CLOSE 100.00
CHANGE 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
LAST SALE 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
VOLUME
1,000
1,000 5,000 100,000
VOLUME
EPS$ 0.239 0.932 1.760 0.369 0.070 0.000 -0.438 0.722 0.449 0.184 0.140 0.102 0.467 0.646 0.728 0.816 0.939 0.203 0.631
DIV$ 0.170 1.260 0.000 0.260 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.434 0.060 0.328 0.240 0.540 0.200 0.120 0.610
P/E 14.6 18.7 N/M 18.1 N/M N/M -7.3 16.1 13.4 23.5 43.6 34.2 10.9 17.0 11.0 18.5 9.9 18.2 24.1
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.0 0.0 0.0 0.0 0.0 0.0 0.0
YIELD 4.86% 7.23% 0.00% 3.89% 0.00% 1.23% 0.00% 6.20% 3.67% 2.77% 0.00% 12.44% 1.18% 2.99% 3.00% 3.58% 2.14% 3.24% 4.01% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75%
MATURITY 19-Oct-2022
6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%
20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022
YTD% 12 MTH% 3.73% 3.73% 2.93% 2.93% 2.67% 2.71% 5.76% 5.76% 12.81% 12.81% 0.58% 4.04% -1.09% 5.26% 0.22% 4.45% 2.29% 9.61% 11.57% 11.57% 18.35% 18.35% 5.17% 5.17% 15.86% 15.86% 5.67% 5.67% 3.40% 3.40% N/A N/A 10.80% 2.60% 10.40% -4.00%
NAV Date 31-Dec-2019 31-Dec-2019 27-Dec-2019 31-Dec-2019 31-Dec-2019 31-Jan-2020 31-Jan-2020 31-Jan-2020 31-Jan-2020 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019
to mid-1990s, when the GBPA’s late owners, Sir Jack Hayward and Edward St George, were permitted to split the energy utility away from Freeport’s quasi-governmental authority. This enabled the duo, and their heirs, to sell their ownership stakes in what today is GB Power for multi-million dollar profits. Majority ownership and management control has subsequently passed to Southern Energy (Mirant), the short-lived Marubeni/Taqa consortium and now to Emera, which has bought out all remaining Bahamian shareholders. While some of the latter have traded their holdings for shares in Emera, Pastor Victor said this had changed GB Power from a “municipality” focused company, concerned primarily for the interests of its customers, to one that was now shareholder and profit driven. “We need a municipality model because we are dealing with a city that has been through the most destructive hurricane in the history of the Commonwealth of The Bahamas,” he said, adding that the situation further exposed the need for the Coalition to keep pushing on two causes dear to its heart. “We need to have competition on this island when it comes to power generation, especially in the east and west, and we must have URCA regulating GB Power,” Pastor Victor continued. “The present regulatory regime is not working in the interests of people on the island. There has to be some protection for utility company consumers. URCA is the best choice we have.” Acknowledging that permitting URCA to regulate Freeport-based utilities may conflict with provisions of the Hawksbill Creek Agreement, he suggested that a similar body operating “in conjunction” with the Nassau-based regulator be set up if such concerns proved overwhelming. Other Freeport-based residents and businesses, speaking on condition of anonymity, seemed more resigned to their fate. One said of GB Power’s new fee: “It’s ridiculous really, but what are you going to do? The whole Freeport thing is coming to a grinding halt.” Another added: “I suppose it had to come, but no one can afford the bill as it is now. That’s the problem. Emera have done a good job except on the bills. I suppose they’d better do it because if another hurricane comes the cannot spend that money again.” The storm levy for GB
Power’s three customer categories will be: • Residential - $0.013 cents per kilowatt hour (kWh) or 1.3 cents • Commercial - $0.008 per kWh or 0.8 cents • GSL (industrials) $0.010 per kWh or one cent The GBPA added that this will represent an increase of less than $7 per month for the “average” residential customer, and $24 for the “average” business customer, in a bid to soften the upcoming blow and any consumer push back/fall-out. The charge will appear as a separate line item on customer bills to provide complete transparency on their electricity bills. “We have received the go-ahead from the GBPA to recover the costs of Hurricane Dorian restoration through the Storm Recovery and Stabilisation charge,” Mr McGregor confirmed. “On average, the impact of the charge is one cent per kilowatt hour. “For residential customers, the rate is 1.3 cents per kilowatt hour. For commercials, it’s point eight of a cent and, for industrials, the rate is one cent per kilowatt hour. It’s important to understand that, because the charge is tied to consumption and not a flat rate, customers can impact the charge – and their overall bill – through prudent energy use.” He added: “In most regions, including the Caribbean, insurance is not available for transmission and distribution networks, so costs to repair hurricane damage cannot be recouped in that way. “We know we’re not the only ones rebuilding. It’s a challenging time for so many, and we continue to work with customers to help them manage their electricity costs. Building back quickly and efficiently after an event like Dorian is critical to the health of the island’s economy and is important to our customers, and we remain fully committed to Grand Bahama’s recovery.” Nikita Mullings, GB Power’s director of customer operations, said: “We know that we still have work ahead of us to complete restoration to all Grand Bahama communities. “With the help of contract crews and equipment, our hard-working team is rebuilding 35 miles of transmission line to east Grand Bahama and restoring service to East End communities. We are working efficiently and safely, and estimate that full restoration of Grand Bahama will be achieved by May 2020.”
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MUTUAL FUNDS 52WK HI 2.29 4.37 2.09 195.13 166.73 1.67 1.83 1.76 1.23 8.34 10.26 6.94 12.01 12.35 10.74 10.00 8.98 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.67 1.83 1.76 1.23 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Preferred Income Fund Leno Growth Fund Leno Diversified Fund Leno Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
NAV 2.29 4.37 2.09 195.13 166.73 1.67 1.83 1.76 1.23 8.34 10.23 6.94 12.01 12.35 10.73 N/A 8.98 11.40
MARKET TERMS
BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
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THE TRIBUNE
Wednesday, February 26, 2020, PAGE 7
China struggles to revive manufacturing amid virus outbreak BEIJING Associated Press FACTORIES that make the world’s smartphones, toys and other goods are struggling to reopen after a virus outbreak idled China’s economy. But even with the ruling Communist Party promising help, companies and economists say it may be months before production is back to normal. The problem is supply chains — the thousands of companies that provide components, from auto parts to zippers to microchips. China’s are famously nimble and resourceful, but they lack raw materials and workers after the most intensive anti-disease measures ever imposed closed factories, cut off most access to cities with more than 60 million people and imposed travel curbs. In smartphones, an industry that relies on China to assemble almost all its handsets, some components suppliers say production is as low as 10% of normal levels, according to Nicole Peng of Canalys, a research firm. “The bad news is that there will be further impact, and the impact is worse than a lot of people initially expected,” said Peng. Travel and retail businesses that need Chinese customers have suffered the most so far from the partial shutdown of the second largest economy. But brands including Apple Inc say it is starting to disrupt their supplies. Analysts warn the longer that disruption lasts, the more damage will spread to wider industries and other economies. Global brands have used low-cost Chinese labour to assemble goods for three decades. Now, they increasingly depend on China to supply auto, computer and other components. Disruptions can make this country a bottleneck, choking off their sales. The most optimistic forecasts call for bringing the virus under control by March, allowing manufacturing to rebound. Gloomier outlooks say the outbreak might last until mid-May or later. Or, as the World Health Organization warned this week, authorities might fail to stop its global spread. Automakers and other factories are reopening, but analysts say they won’t restore normal production until at least mid-March. “If factory work does not spike in the coming weeks, a global parts shortage would likely emerge,” Taimur Baig and Samuel Tse of DBS said in a report. There is no indication yet of an impact on consumers abroad, but retailers are starting to warn some products might be
late or unavailable. China also is a major supplier of chemicals for the global pharmaceutical industry. The outbreak has prompted concern supplies might be disrupted but there is no indication that drug production has been affected. President Xi Jinping has put his personal authority behind reviving industry. Beijing is promising tax cuts, though economists say financial help will have limited impact when antidisease controls still in effect are still keeping workers away from factories and disrupting the movement of goods. On Sunday, Xi said “lowrisk areas” should change disease-control measures to fully restore production while high-risk areas focus on fighting the epidemic, according to the official Xinhua News Agency. Manufacturers face a shortage of workers after millions who visited their hometowns for the Lunar New Year holiday were stranded there by the suspension of plane, train and bus services. Officials must “unblock transportation channels,” Xinhua cited Xi as saying. The government of Yiwu, a southeastern city known for its thousands of suppliers of buttons, doorknobs and other components to export manufacturers, says it arranged planes and trains to help their employees get back to work. China accounts for about one-quarter of global manufacturing when measured by the value added in its factories. But it is the final assembly point for more than 80% of the world’s smartphones, more than half of TVs and a big share of other consumer goods. Apple, which has most of its iPhones and other products assembled by contractors in China, rattled stock markets when it warned Feb 17 that revenue would suffer due to supply disruptions. “We would certainly expect to see more news like that,” said Simon Weston of AXA Investment Managers in Hong Kong. Other global companies that need Chinese plastics, chemicals, steel and high-tech components also “face reduced production”, according to Kaho Yu of Verisk Maplecroft, a consulting firm. Yu said that is likely to last through the quarter ending in September. The American Chamber of Commerce in Shanghai said last week half of the 109 companies that responded to a survey reported their global operations already are affected. It said 78% reported they lacked sufficient staff to run
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production lines. Some companies including Ralph Lauren Corp already were moving out of China due to rising costs and US tariff hikes in a fight over Beijing’s technology ambitions and trade surplus. But many still depend on China for components or some stages of manufacturing. Samsung is “feeling the heat” because it shifted smartphone assembly to
Vietnam but needs experienced Chinese managers to run those factories, Peng said. She said they visited China for the Lunar New Year and are blocked from returning to their jobs. Other companies including global automakers that rely increasingly on the Chinese market are restarting production but say the pace depends on whether they can get components. China accounts for about
one-quarter of global auto production and according to UBS provides 8% of global exports of auto components. Many use “just in time” manufacturing, delivering components when needed. Those factories have limited stockpiles to ride out disruptions. Volkswagen, the country’s biggest-selling auto brand, said on Monday its challenges include “slow national supply chain and logistics ramp-up”.
In China, factory production in export-oriented coastal provinces is back above 70% of normal levels, according to Cong Liang, the general secretary of the Cabinet’s planning agency, the National Development and Reform Commission. “Companies are working overtime,” Cong said at a news conference. He insisted the epidemic’s impact is “short-term and generally controllable”.