Jun 2016 Financial News

Carib Glassworks' $200m upgrade...Last man standing

Jun 16, 2016

Despite tough competition from multinationals, Carib Glassworks Ltd’s new $200 million glass container-producing furnace is an example of the company’s faith in T&T’s economy, says David Hadeed, managing director, Carib Glassworks Ltd.

“The decision to make the investment to increase our capacity was made in a different macro-economic environment than the one we find ourselves in now. This challenge is compounded by the increasing trend to cheaper alternative packaging, as well as the consolidation of the global glass industry that the group chairman referenced. So, why make the investment? It is simple: our customers’ demand it,” he said last week at the inauguration of the company’s new furnace at Carib Glassworks Ltd, Easter Main Road, Champ Fleurs.

Hadeed said the Carib Glassworks Ltd is a local company owned by the ANSA McAL Group and they have succeeded and are expanding despite competition from much larger multinationals.

“Much like our parent group, Carib Glassworks is Trinidadian by birth but a truly Caribbean organisation. As the only glass container manufacturer in the entire region, we have seen our home market fall victim to the shrinking global marketplace. Breweries in Jamaica, Barbados, Haiti, St Lucia, Suriname, St Vincent, Dominica, Bahamas, Cuba and the Dominican Republic, as well as distilleries in Barbados, Jamaica and Cuba are all selling some of the most iconic brands to originate from this part of the world and are now all owned by multinationals.”

During the launch, the Prime Minister Dr Keith Rowley toured the plant with ANSA McAL chairman, Norman Sabga.

Sabga, who also spoke at the ceremony, said the $200 million investment is to keep Carib Glassworks Ltd competitive in a world where large multinationals are increasingly dominating the glass-manufacturing market.

“Carib Glassworks remains one of the small handful of companies that is an independent glass manufacturer. This follows the closure of plants in Jamaica, the Dominican Republic, Puerto Rico and Panama. Our competition is now from very large, well capitalised multinationals,” he said.

Hadeed added that all of these factors make Carib Glassworks more competitive.

“These global organisations place great demands on our systems, procedures and internal standards. A challenge we welcome and readily accept, as it helps drive us to become a truly world-class packaging supplier.”

He said the plant, designed to meet first-world safety standards, is capable of producing up to 20 million bottles per month. It includes world-class inspection machines, the flexibility to make broad-based bottles, the ability to do true lightweight containers, and is supported by a plant management system providing real-time production data to help in analysis and troubleshooting.

He added that the company will do its part to ensure everything it does is environmentally friendly.

He said since inception in 1948, Carib Glass has always been focused on the environment. Whether it be through forestry restoration at their sand plant in Matura, or leading the national recycling effort, Hadeed said the company continues to ensure that minimising the impact on the environment remains a priority.

“Last year, CGL sold 35,000 tonnes of glass in T&T, of which only 5,000 tonnes came back. This is substantially less than what we are able to collect from our smaller regional neighbours where legislation has been instituted to help in this regard. Despite our struggle to effectively promote the need to keep T&T beautiful, we would like to publicly assure the Prime Minister that our efforts will not stop,” he said.

Plant capacity

Cyril Coomansingh, technical director of Carib Glassworks Ltd, said the furnace would be able to produce 1.2 million units daily.

“We have three production lines and at anytime we could be producing up to three products simultaneously.”

He said the company services the entire T&T, Caribbean market and right now they want to expand into Cuba, the Dominican Republic and other countries.

When the Cuban vice minister of trade, Lleana Bárbara Nuñez Mordoche visited T&T two weeks ago, she met with Carib Glassworks as one of the companies that have shown strong interest in entering that market.

“We will be manufacturing about 30,000 tonnes annually for the local market but also the furnace output will be directed to the export market. The increased capacity allows us to look at new markets. The new technology allows us to go into markets that we were not able to because we could not make the types of bottles and the size of bottles,” he said.

He said the new equipment means a higher level of efficiency but that does not mean that employees will be retrenched because of new machinery.

Right now Carib Glassworks Ltd employ 300 employees.

“What we have done with this plant is bring a higher level of skilled employee because it is a very automated plant; different from many years ago when we had a very manual operation. We focus a lot on training as well. The chairman, Norman Sabga, did mention a technical agreement with Germany that brought with it training and development for the staff,” he said.

He said the new plant is expected to be in operation for another eight to ten years.

“The technology is new. It is a brand new plant from the civil works to the infrastructure.”

Andrew Sabga, who also spoke, said these are “challenging times” for T&T’s manufacturing sector.

“We are extremely aware of the fiercely competitive market in which we operate. However, we must press on if we are to create a new legacy. An enabling business environment is crucial. It is an established fact that productivity and growth is key to competitiveness, job growth and ultimately our living standards. So we need a stable macro environment and the effective but not onerous regulations,” he said.

Prime Minister Rowley during his speech encouraged the private sector to search for new markets despite the country’s small size.

As he has done since assuming his position last year, Rowley called on the business community and other national sectors to stop relying on the Government and start generating their own wealth.

On June 5, there was a fire at Carib Glass works and Andrew Sabga, sector head of beverage of the ANSA McAL Group said that the affected area would be rebuilt by 2017.

“A few days ago we suffered the loss of the older furnace due to a leak. This will be rebuilt.”

 

Source:
RAPHAEL JOHN_LALL
raphael.lall@guardian.co.tt
Business Guardian BG4 and BG5
Thursday June 16, 2016