Page 15 - Neal and Massy Holdings Annual Report 2012

13 forward focused
IVE OFFICE
The Group has emerged from the economic and financial crises
of 2009 with a strategy for future growth, a strong balance sheet
and a resilient group of core companies to fuel that growth. Cash
Flow from operating activities increased from $522 million to $698
million and the Group’s Cash position increased from $1.1 billion
to $1.3 billion.
Strategic Outlook
Strategic Initiatives
All Business Units in the Group are forward focused on the growth
objectives and Force For Good vision of the Group. Significant
progress was made against the Group’s strategic plan in 2012:
• The introduction of the Group Customer Service Management
System has worked very well for Hi-Lo and Neal & Massy
Automotive Ltd. Both companies have improved their customer
service measures significantly, resulting in increased supermarket
transactions and new vehicle sales.
• The strength of the Group’s pan-Caribbean distribution network
was reflected in new lines from principals coming over to Neal
& Massy. In addition, the Group acquired the Valrico brand
of contract-manufactured, high quality food products for
distribution throughout the region.
• Plans for new retail formats continued and the opening of the
expanded Hi-Lo supermarket in north-west Trinidad provided an
indication of the new look for new store locations coming in
South and Central Trinidad, Guyana and in south-east Barbados.
• We also increased our shareholding in the St. Lucia-based
supermarket chain, Gablewoods Supermart Limited, to expand
our retail operations in the region.
• The Automotive & Industrial Equipment Business Unit launched
the National and Alamo car rental business with locations in
Trinidad and Tobago. Roll-out to other Caribbean islands is
underway.
• United Insurance has exited the unprofitable inward re-insurance
business and has renewed its focus on its core Caribbean
markets.
• The Prime Minister of the Republic of Trinidad and Tobago recently
announced the Government’s approval of a Methanol to Di-
Methyl Ether (DME) project for the energy sector in Trinidad and
Tobago, which is a joint venture between Mitsubishi Corporation,
Mitsubishi Gas Chemical Company Inc. of Japan, Neal & Massy
and Texas-based Integrated Chemicals Company Limited. The
first stage of the project is projected to produce 750,000 MT
per year of Methanol and 100,000 MT per year of DME. It is
estimated that for the first stage, 100 MMSCFD of natural gas
will be consumed in the production of the Methanol and DME.
The production of DME could be used as a blending stock for
LPG and as a replacement for diesel, and can therefore help
to ease the Government’s subsidy removal on these products.
Phase two of the project will produce Mono Ethylene Glycol
(MEG) from Syngas and/or Ethane extraction. MEG could be used
to develop additional downstream manufacturing operations,
such as automotive coolants, polyester fibre and PET resin. Initial
investments are projected to be approximately USD$850 million
and will generate approximately 180 permanent jobs but peak
employment during construction could be as high as 3,000.
Additional phases of the project also include the production
of Acetic Acid and Acrylonitrile, which could lead to further
downstream industries in plastics manufacturing.
• The Information Technology and Communications (ITC) Group
made further strides in the managed services area with a major
contract being negotiated, which will be the largest ATM
managed services contract ever awarded in Jamaica. The Business
Unit also launched the leading credit bureau service in Jamaica
in conjunction with its joint venture partner, CRIF.
• The growth of the Guyana group continues to outpace the
growth in the economy. Improvements in efficiency and
investments in expanding and modernizing the plant for all
Guyana companies is allowing the Group to add new products
and services to its portfolio and thus fuelling growth.