business@tribunemedia.net
TUESDAY, APRIL 7, 2020
$3.89 Food supply chain in lockdown ‘strain’ By YOURI KEMP and NEIL HARTNELL Tribune Business Reporters A BAHAMIAN bread supplier yesterday revealed that the government’s total weekend lockdown had disrupted production to the extent that fulfilling orders by major retailers was impacted. Kimani Smith, Purity Bakery’s general manager, told Tribune Business: “When the prime minister shut down the country abruptly, and he did what he had to do, that basically disrupted our production schedule. “For example, we produce bread on Sunday for Monday distribution, so we weren’t able to get in the bakery on Sunday. We are making bread as of today [Monday] and we are going to be putting that out. “We are trying to adjust our schedules accordingly, but what is happening in the stores as you can imagine is everyone is a little panicked and afraid, so everyone is having a massive run on the inventory of bread. For example, if you are accustomed to purchasing two loaves you are now purchasing eight.” An e-mail sent yesterday by Purity Bakery to one of its customers, which has been seen by Tribune Business, warned that the late manufacturing start could postpone store deliveries until this morning. It said: “As you are aware we were all shut down this weekend. We normally produce bread on Sunday for Monday distribution, we were unable to do this and we are now in the process of producing. We normally start producing from 12am but had to start at 6am this morning. “Subsequently, bread may not be available to service your stores until Tuesday morning. Depending on the time the production run finishes we will do our best to supply before your stores close this evening. But certainly will service Tuesday morning.” Mr Smith, meanwhile, said bread demand was “impossible” to keep up with. He added: “Because it is not like baking bread at home, we have a whole process and a whole manufacturing plant. So it is
SEE PAGE 5
$3.89
$3.93
Bahamas ‘steepest’ faller in 3-week hotels wipe-out By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
T
HE Bahamas’ suffered “the steepest” COVID19 tourism decline of all Caribbean nations with its number one industry virtually wiped out in three weeks, new research suggests. Data from STR, formerly known as Smith’s Travel Research and a widely-used tourism information tool, reveals that Bahamian average hotel occupancies went from suffering a 19.4 percent year-over-year decline in March’s second week to a catastrophic 90.8 percent plunge compared to prior year levels as the mix of border closures, travel warnings and airline cancellations truly bit. And The Bahamas also suffered the “largest drop” in average daily room rates (ADRs) among Caribbean destinations across those three weeks, together with the sharpest plunge in another key hotel performance indicator - revenue per available room (REVPar). The REVPAR decline, which started at almost 40 percent in the week March 8-10, then accelerated to 78
• Occupancies plunged over 90% late March • With revenue per room hitting just $13 • Led Caribbean in race to COVID-19 bottom
BAHAMAR RESORT
NASSAU CRUISE PORT
percent the following week and then to a 95.2 percent plunge to a disastrous $12.99 in the week March 24-30. Average daily room rates for the latter week were also down 47.8 percent against prior year comparatives. The data shows precisely why properties such as Atlantis, Baha Mar, Sandals, the British Colonial Hilton and the RIU had no choice but to close their doors and temporarily layoff thousands of staff once the final guests had left. With zero revenues coming in, they had little choice but to drastically cut costs including their wage bill. The STR figures show that The Bahamas’ descent was quicker, and greater, than the rest of the Caribbean and the region’s average hotel indicators and metrics for the period. A month that typically represents the winter peak for local hotels, with occupancies often in the 90 percent range, was swiftly transformed into a rocky
SEE PAGE 5
Target ‘30-40%’ of food needs from local farmers By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN farmers would be able to “ramp up” production to supply 30-40 percent of this nation’s food needs within three years if the government provides the necessary funding and support. Caron Shepherd, president of the newly-formed Bahamas Agro Entrepreneurs Group, told Tribune Business yesterday that the COVID-19 crisis had highlighted the importance of domestic farming and the need to vastly improve this nation’s food security to counter potential import disruptions. Estimating that The Bahamas is meeting just three to five percent of its food needs from domestic sources, Ms Shephard said the pandemic had reinforced the case farmers had been trying to make to both the former Christie administration and its successor
• Agro Group chief: Can be done in 36 months • Sector supplies just 3-5% of national demand • Climate-controlled grow houses vital to revival for more financial support and other assistance. “This goes right back to 2016 when we had Matthew, and we went and agitated for the government to provide $60m,” she recalled. “Even if they had done 50 percent of that we would be in a much better position than we are now, and farmers would have been able to sow more crops and we would be able to sustain ourselves a little bit longer. “It comes back to what we were saying in 2017, 2018. I don’t want to be the one to say: ‘I told you so’, but it comes back to that dilemma.” Michael Pintard, minister of agriculture and marine resources, yesterday said The Bahamas has “adequate food stocks” in the short to medium-term.
However, he noted that several governments were mulling whether to reduce exports of particular foodstuffs their countries produce to conserve supplies for domestic consumption. There was also a slowdown in the harvesting, production and packaging of key staples due to the COVID-19 pandemic, with the UK and European governments already warning of a shortage of crop pickers for upcoming harvests. Mr Pintard warned that The Bahamas “must prepare for what may emerge in this fluid environment”. Ms Shephard, concurring, added: “This shows how important agriculture is to our society, and how important it is for us to diversify
our economy so that we can be able to sustain ourselves. “We can actually do it. We have a comprehensive plan we’d like to implement. What we’re doing is selecting certain farmers to grow certain crops to the best of their ability, and others to grow other crops to the best of their ability, so we can have a crop rotation system. Farmers would be producing an abundance of crops year-round.” To achieve this objective, Ms Shephard added that it was critical for The Bahamas to develop/acquire temperature-controlled grow houses to ensure crops can be nurtured during the hot May-August fourmonth summer period.
SEE PAGE 4
$3.99
BRENSIL ROLLE
NIB facing three times’ its annual claims volumes By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE National Insurance Board (NIB) has just days to process three times’ the number of benefits claims it receives in a typical year due to the COVID-19 crisis, a Cabinet minister said yesterday. Brensil Rolle, minister of the public service and national insurance, told the House of Assembly that the social security system had received almost 18,000 e-mailed claims forms and associated information in the aftermath of the economic shutdown produced by the pandemic. This volume, which dwarfs the 6,000-7000 benefits claims that NIB receives in an average year, has forced it to “innovate” by developing paperless systems for processing COVID-19 related applications and partnering with private sector employers to make payouts to eligible employees who have temporarily been laid-off. Mr Rolle added that NIB is now “bracing” to pay out $16m a month “above what it normally budgets” in benefits payments. This translates into an extra $192m annually which, depending on the pandemic’s economic impact and how long it lasts, will further strain a $1.7bn NIB reserve fund which was already set to come under ever-increasing pressure. While no audited financial statements for NIB have been released since 2016, Mr Rolle confirmed that benefits payouts have exceeded contributions ever since that year. And previous actuarial reports have warned that the $1.7bn reserve fund could be exhausted by early next decade unless major reforms are swiftly implemented. The minister alluded to this yesterday, referring to NIB’s five-year “strategic plan” and the fact that the COVID-19 crisis had made implementing several of the reforms it contains almost imperative to secure the social security system’s future sustainability.
SEE PAGE 4
‘Crème de la crème’ over Cayman deal By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A BAHAMIAN insurer is poised to become a “crème de la crème” operator, its chairman argued yesterday, after teaming with a Caribbean partner to pull-off a Cayman Islands acquisition. Sir Franklyn Wilson told Tribune Business that RoyalStar Assurance’s near-$5m investment in purchasing a 32.26 percent stake in Fidelity Insurance (Cayman), an insurance broker, would further diversify its revenue streams and help it “build capacity” to exploit further opportunities in both The Bahamas and wider region. RoyalStar teamed with Trinidad-based Guardian Holdings, which will own the remaining equity and be Fidelity Insurance’s majority shareholder, on the deal. Sir Franklyn, pointing out that Guardian Holdings has
• Bahamian insurer in JV broker purchase • RoyalStar ‘diversifies’ with one-third stake • ‘Builds capacity’ for future acquisitions
SIR FRANKLYN WILSON held 26 percent of RoyalStar ever since the latter was acquired from its former UK owners, said the Bahamian insurer planned to leverage this relationship to exploit further “opportunities”. He added that the Guardian Holdings tie-up had become even more fruitful following last year’s takeover of the Trinidadian
conglomerate by Jamaica’s National Commercial Bank (NCB), which is controlled by Jamaican-Canadian fund management tycoon, Michael Lee-Chin. This, Sir Franklyn argued, had placed RoyalStar in the company of two regional conglomerates that can “open a lot of doors” when it comes to the property and casualty underwriter’s growth in both The Bahamas and the region. The Fidelity Insurance purchase, which was completed on October 10 last year, closed before the COVID-19 pandemic ever emerged. The announcement was delayed due to Guardian Holdings being
a publicly traded company, but Sir Franklyn suggested that RoyalStar’s extra “capacity” would stand it in good stead should any growth prospects emerge in the post-crisis recovery. “We’re in good company here,” he told Tribune Business of RoyalStar’s further Cayman expansion. “The key point is that this is consistent with the idea of diversifying our revenue streams. We’re also deepening our relationship with the Guardian Group, which has been part of us ever since we bought out RoyalStar locally. “That relationship opens
SEE PAGE 4