Stories by KYRON REGIS
Although the two companies, the West Indian Tobacco Company (Witco) and Trinidad Cement Ltd (TCL) received special exemptions from the Government to resume operations, early during the “stay-at-home” period of the current pandemic, their financial results were strikingly dissimilar.
For the six months ended June 30, 2020, Witco’s net profit of $194 million represented a $16.14 million or 7.68 per cent decline, while TCL’s net profit of $10.4 million showed a $22.95 million or 68.74 per cent decrease.
In the directors report for TCL, Chairman David Inglefield and Managing Director Jose Seijo Gonzales said the arrival of COVID-19 adds to the challenges of the business that existed prior to the start of the pandemic in the region.
They continued: “These include weak economic growth in many of our local economies over the last few years and imports of cement into the region.”
Meanwhile, in his report, Witco Chairman Anthony E Phillip said that the company’s factory operations were closed for the month of April and this negatively impacted exports to Jamaica, Guyana and other Caribbean islands.
Additionally, he said that the distribution of products in the domestic market was severely disrupted by the “stay-at-home” measures and the closure of the entertainment channels.
In an interview with Guardian Media, Phillip explained: “We had a contractual obligation to the other markets and if Witco did not resume operations to supply the contracted markets, Witco would have had to purchase cigarettes from other sources with the same brand names and everything and send it to them.”
He likened it to taxi operator who has a contract with a client to take them to the airport.
Phillip noted that if the time for transporting the client arises and the taxi is not functional, the operator has to organise another taxi to take the client to the airport.
Witco’s chairman said this would have happened to the company had it been shut down for an extended period of time.
He said: “Because there is no other factory inside of Caricom it means that that manufacturer would have come from outside of Caricom to supply those markets.”
Moreover, Phillip said Witco would have been in breach of contract with the businesses with which they had partnered to keep them stocked. He said: “The implications are, that if their businesses shut down, they could have sued Witco.”
Based on the supply contract with Witco, Phillip said that these other businesses had shut down their factories. Phillip also noted that when Witco resumed supply to these markets, the stock levels of these businesses were very low because even during the various “stay-at-home” periods in different countries, stores continued to sell cigarettes.
In his report, Phillip said with the phased reopening of businesses there were positive changes to market processes, which should continue to drive efficiencies and ensure its products are available to all customers.