Page 11 - Neal and Massy Holdings Annual Report 2012

9 forward focused
Our businesses in Barbados continue to grapple with the effects of
a protracted period of economic stagnation. The Barbados economy
grew by 0.2 percent for the first nine months in 2012. Not since
2007 has the Barbados economy grown by more than one percent.
Tourism, the sector on which Barbados is most reliant, experienced
another year of weak performance and tourism value-added for
the first three quarters of 2012 is estimated to have declined by
3.7 percent. The 12-month rate of inflation stood at 7.8 percent as
at the end of July, a decline of two percent from the prior period.
The growth rate in food prices stood at 3.1 percent, a decline of
0.6 percent from the prior period. Though a small decline, this is a
hopeful sign for our retail business in Barbados.
In Guyana, real GDP growth of 2.8 percent was reported for the
first half of 2012, and is projected to be 3.8 percent for the full
calendar year. Mining and quarrying, one of the leading growth
sectors in recent years, experienced a 16.4 percent growth rate for
the first six months of 2012. Once again our Guyana results were
correlated to the positive economic growth. Through the strong
management of the Executive Team in Guyana, the organisation has
consistently delivered double-digit growth for the company. Inflation
stood at 1.8 percent for the year ending June 2012, with food prices
registering an increase of 4.5 percent. This is encouraging for our
plans to extend our Retail Lines of Business in Guyana in the short
to medium term.
The Jamaican economy continues to stagnate. GDP growth for
the first two quarters of 2012 was weak, recording -0.1 percent to
-0.2 percent respectively. Since January 2011 when the agreement
with the IMF stalled over the payment of back wages to public sector
workers, the IMF has curtailed disbursements to the Government of
Jamaica (GOJ). Other multilateral institutions; i.e., World Bank, IDB
and the European Union have also followed the IMF in curtailing
disbursements to the GOJ, leaving the GOJ with little capital to spend
on much-needed infrastructure, health and education investments.
Without these investments to stimulate activity, the Jamaica
economy has continued to reflect the impact of weak domestic
demand. The unemployment rate is expected to reach a record high
of over 13 percent, with inflation around 6.9 percent. Our businesses
in Jamaica, which operate in the distribution, industrial gases and
information, technology and communication sectors, continue to
remain prudent, committed to maintaining and improving cost
efficiencies to stay competitive in Jamaica’s tight economy. Despite
its discouraging economic outlook, the tourism sector grew with
stop-over visitors increasing by approximately 10 percent in the
first nine months of the year. The hotel and restaurant sector also
grew by 0.8 percent in the first quarter and by 3.8 percent in the
second quarter of 2012. The Group continues to embark on new
investments in Jamaica. This year, through our subsidiary Illuminat
(Jamaica) Limited, we finalised an agreement with CRIF to form a
joint-venture credit bureau. The business will be hinged on a new
data centre which will provide credit reports to at least 60 percent
of annual credit applicants. In 2012, Gas Products Limited also made
a major capital investment to expand LPG storage capacity at its
import terminal in Montego Bay.
With the exception of Guyana and Suriname, predictions for
the coming year for the Caricom countries remain cautious. The
performance of these countries over the past year continues to
reinforce our need to seek opportunities outside our traditional
Caribbean home markets. The Group has become quite dominant
in the sectors in which it participates in the major Caricom countries
and to support its growth objectives, the Group will need to expand
its operations beyond its traditional territories. In the last year
the Group’s management dedicated some time to exploring and
examining opportunities in Latin and Central America as well as in
West Africa. The Group has now narrowed its focus to a few select
countries for market entry.
In closing, I would like to thank Gervase Warner, President
and Group CEO and his team of Executives for their astute and
practical leadership. They have piloted the Group through a
difficult economic period and through the requisite restructuring
to assure the continued strength of the Group’s core operations.
The Executive Team has created a bold vision that is being fully
embraced throughout the organization; i.e., to be A Force for Good
– the Most Responsible and Profitable Investment Holding/
Management Company in the Caribbean Basin. The Executive