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After months of debate about whether or not the global financial crisis will affect T&T and

how serious will be that impact, the Business Guardian polled leading business executives about their view of the local economy over the next year or two. We asked them how their companies were positioned to survive whatever the global situation throws at them.


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The Lawrence Duprey-controlled CL Financial Group will be approaching the 2009 financial year “very cautiously,” said its finance director Michael Carballo.

Stating that one of the group’s strengths is its diversity in such areas as financial services, real estate, energy and spirits, Carballo said it has established those interests in T&T, Jamaica, the US and Europe.

“We are heavily diversified. We are looking at 2009 very cautiously. One of the main issues is that capital markets are shut out for us right now.

“However, there is a lot of interest being expressed. With a major diversified group like ourselves, bankers still want to talk to us. While (the capital markets) are shut, there are still opportunities for us,” Carballo said.

“Luckily, the group has not been impacted in any way via securities in any banks we have had to write down.”

He said while the group will have to assess how the global financial crisis will affect it, he doesn’t believe that people will be drinking less of its premium rum, 1919.

“The spirits business is kind of recession-proof: they drink in good times and drink in bad times. I think Angostura will do very well. I think we have a strong opportunity at Angostura to improve our performance locally and regionally.”

Carballo said he expected that if there’s any kind of financial belt tightening similar to the 1980s, people will likely shift from drinking premium spirits to local spirits.

As far as CL Financial’s energy interests were concerned, Carballo said the group had “tight contracts” and he didn’t expect any fallout.

“Insurance will continue to do okay. CL Financial has a 56 per cent (stake) in Republic Bank. I think Republic is one of the strongest banks in the region.”

Carballo said CL Financial, with $100 billion in assets, could weather any storm.

“We are not exposed in any one particular industry. That is our business model,” Carballo said.

CL Financial: $100 billion in assets can weather

any storm

Flavorite Foods maintains a hopeful outlook

Ice-cream is the last thing people buy. That

would impact on our

sales volumes.

We are trying to factor those things in 2009.


In preparing its 2009 budget last week, Flavorite Foods Ltd took a critical look at the Caribbean tourism market, which is one of its target markets.

Stock exchange-listed Flavorite Foods exports about 15 per cent of its ice-cream products to regional tourism destinations.

Accountant Bernard Malcolm last week said the company is looking at how the global financial challenges will affect the disposable income people in the regional markets have to purchase ice-cream.

It will also be looking at the effect of T&T’s 14.8 per cent inflation rate on consumers’ disposable income for the dessert.

“Ice-cream is the last thing people buy. That would impact on our sales volumes. We are trying to factor those things in 2009.”

He said Flavorite Foods opened a distribution location in Barbados and is set to open another in St Lucia.

Commenting on 2008 sales, Malcolm said Flavorite Foods’ half-year results showed a slight increase of five per cent, but that was below its projected ten per cent.

Asked how the San Juan-based company planned to treat with inflation and related volume sales, Malcolm said the company will be revisiting its sourcing of such raw materials as milk, stabilisers and containers.

“We’ll revisit our internal operations to see how cost effective they are to bring the numbers back in. Laying off staff is not on the horizon. We are hopeful for the next year.”

Watchful at Agostini’s


Watchful is the word Anthony Agostini, managing director of Agostini’s Ltd, used to describe the group’s approach to the next financial year.

Agostini said he fully expects the global financial situation will have some effect on T&T.

One company in the Agostini’s Ltd group, Agos Lighting, exports recessed light fixtures to the US.

Agostini says he’s already seeing a slowing down in exports to the US, which receives about 70 per cent of its products.

The group comprises:

n Agostini’s Marketing

n Agostini Pharmaceutical Ltd

n Agostini Industries (low-cost housing/townhouse development)

n Agos Manufacturing (lighting)

n Agostini’s Fastening Systems Ltd

n Rosco Petrovance (oilfield and hydraulic supply)

n Hand Arnold Trinidad Ltd

n Modern Lighting Company (based in Maryland, US/commercial lighting fixtures)

n Agos Lighting Ltd

Agostini said that with the US building industry experiencing a slowdown in the last six months, a slowing down locally is to be expected, but he doesn’t think it will be devastating.

“I think that companies that export to the region could be affected. Those companies that are more involved in exports are the first ones to come under some pressure.”

He said the drop in demand for products in the world is leading to prices of commodities that once escalated, such as soya oil, cheese and steel, coming down by as much as 15 per cent.

Agostini said it could take up to four months for those reduced prices to register on grocery shelves.

“This might actually help the poor. They are the ones buying staples and if those prices come down in three to four months’ time, they will be helped.

“We’re in a watchful state. We are not so naive to think that nothing will happen. Definitely, things will happen and change and we have to make sure we are on top of that to the extent that we can.”

This last year was good for Agostini’s Ltd.

“The nine-month results were very good. We recently had a rights issue. It went alright. We can’t comment on it until next month. We haven’t done anything significant. We bought Hand Arnold on August 1 for $120 million. That will increase sales of the group by 40 per cent. That is a big swallow for us.”

We’re in a watchful state. We are not so naive to think that nothing will happen. Definitely, things will happen and change and we have to make sure we are on top of that to the extent that we can.

Bleak forecast for some…

—Furness Trinidad foresees gloomy 2009

—Prestige Holdings expects labour shortages

Raphael John-Lall

Videsh Praim, finance director, Furness Trinidad Ltd, expects 2009 to be a gloomy year but said that given an uncertain environment abroad and in T&T, the full impact is left to be seen.

He said the group had not seen the impact of the international financial meltdown as yet would be analysing the financial environment and taking precautions.

He said high interest rates would affect the Furness Group and described high interest rates as an “additional cost.”

For this reason he said the group would have to pay out its loans within a shorter period of time.

“Next year planning we’ll try to collect our monies faster and pay off loans to save interest,” he said.

He thinks that another possible impact the current financial environment could have on the Furness Group could be less business for car rentals from the group for 2009.

He said if energy prices continue to drop and foreign multinationals in T&T are affected, then the business they do with the group may be reduced.

“The oil and gas companies here in Trinidad may be renting less cars from our subsidiaries if there is less business for them,” he said.

Praim said that inflation is a problem and it would affect households in 2009.

He said the inflation rate would lead to less buying power for consumers which will impact negatively on the economy.

Praim disagreed with the Government’s view that the country’s economy would not be affected by the drop in oil prices and the international financial meltdown.

He said he would like to see the Minister of Finance and the Government revisit the budget given the downward movement in the price of oil.

“It would be a gloomy year for 2009 given the drop in oil prices and the high cost of living,” he said.


Although Prestige Holdings Ltd is still in the process of completing its financial plan for 2009, Marlon Danglade, chief financial officer, believes that the company could face a labour shortage next year.

“Labour could be a problem for the fast food restaurant industry. As long as there is CEPEP, people would rather work there for more money than in a fast-food restaurant,” he said.

Danglade said while there could be layoffs in other industries, Prestige Holdings would need more workers.

He said low-skilled workers have other opportunities and alternatives in the economy.

“Who wants to stand up in a kitchen in a fast food restaurant all day when they could get a job in Cepep for more money and less work,” he said.

Danglade predicts that there would be a “brain drain reverse” next year. He said he expects to see Trinidadian nationals coming back to the Caribbean seeking jobs.

“I already know Trinidadians in the United States who want to apply for jobs here. Because of the financial situation abroad you will see more people like that applying for jobs here,” he said.

He said an increase in the price of raw materials could also affect Prestige Holdings in 2009.

“In areas like fries, shortening, chicken, we expect the cost of these to go up,” he said.

Danglade said Prestige Holdings will be focusing on efficiency in 2009 so as to avoid passing on the costs to customers.

“We are looking at efficiency improvement which would decrease cost. Customers should not pay the price for inefficiency,” he said.

Danglade said the full impact of the international financial crisis has not hit T&T as yet but there are already signs that it is coming closer to home.

He said Prestige Holdings is already seeing the effects of the international financial meltdown in Barbados.

“We have a TGI Fridays branch in Barbados. We have seen a decline in transactions in our branch in that country. There has been less tourist arrivals in Barbados and I think that they have already been affected,” he said.

Danglade said Jamaica had already seen a rise in commodity prices and that country would also be affected.

He disagreed with the Finance Minster that T&T is immune from the international financial meltdown.

“What makes us so special that we won’t be affected? I don’t agree with the Minister of Finance’s statement at all that T&T is immune. We will eventually be affected like everyone else,” he said.

It will be a gloomy year for 2009

given the drop in oil prices and the high cost of living






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