High cost, but small price to pay

Jamaica Gleaner - - ENTERTAINMENT - Neville Gra­ham Busi­ness Re­porter neville.gra­ham@glean­erjm.com

Busi­nesses tout wis­dom of hur­ri­cane prepa­ra­tion de­spite near miss

THE SOUNDS of com­merce re-emerged Tues­day morn­ing af­ter a day of lock­down in an­tic­i­pa­tion of a storm that failed to show.

The fi­nan­cial mar­kets also came back to life. And, as if mak­ing up for lost time, the stock mar­ket climbed by more than 2,200 points.

Still the lull in busi­ness would have come at a price for com­pa­nies – both to ramp down op­er­a­tions and then to ramp them back up af­ter a lost day of pro­duc­tion or ser­vice de­liv­ery.

On Tues­day, how­ever, the cap­tains of in­dus­try to whom Gleaner Busi­ness reached out for com­ment, while ac­knowl­edg­ing that the cost of prepa­ra­tion for a nat­u­ral dis­as­ter, though high, said it was a small price to pay.

Man­ag­ing Di­rec­tor of bev­er­age com­pany Wisynco, Wil­liam Mah­food, re­ferred to the cost of prepa­ra­tion as an in­vest­ment – a safe­guard against the like­li­hood of a fall­out.

“Yes, the ad­vent of a hur­ri­cane and the at­ten­dant prepa­ra­tion rep­re­sents a loss to busi­nesses and Ja­maica on a whole, but it’s a small price to pay for what could have been a mas­sive loss,” said Mah­food, whose com­pany was re­cently rocked by another dis­as­ter – a fire at the St Cather­ine-based plant in May.

Hur­ri­cane Matthew, which at one point strength­ened to Cat­e­gory 5 sta­tus, even­tu­ally skirted Ja­maica. But that was al­most in­ci­den­tal.

“If you don’t pre­pare and you do get hit, then po­ten­tially, your losses could be much greater, and your start-up time could be far longer,” said Mah­food.

“You have to en­sure that you pro­tect your elec­tri­cal equip­ment be­cause you can get power surges, and so on, that Mark My­ers, man­ag­ing di­rec­tor of Restaurants of Ja­maica Limited, op­er­a­tors of KFC Ja­maica and Pizza Hut Ja­maica.

could do se­vere dam­age,” he said while tick­ing off a list.

HIGHLY VUL­NER­A­BLE

Jef­frey Hall, the man­ag­ing di­rec­tor of Ja­maica Pro­duc­ers Group, runs an op­er­a­tion that in­cludes farm­ing and pro­duces a crop highly vul­ner­a­ble to the el­e­ments – ba­nanas.

“Our prod­uct is very sen­si­tive to hur­ri­cane, and a di­rect hit would mean that Ja­maica would be out of the prod­uct for some time,” Hall said.

The man who runs JP Farms, Dr Damian ‘Damo’ Gra­ham, puts the po­ten­tial loss for Ja­maica Pro­duc­ers at “close to $1 billion in the event of Ja­maica Pro­duc­ers Group CEO, Jef­frey Hall.

flooded fields and wind dam­age”.

Hall said the com­pany had a plan that worked.

“We have a pro­to­col, which was ac­ti­vated. This would have seen us pre­har­vest­ing fruit. We sought to do those ac­tiv­i­ties that would have put us in a po­si­tion to im­me­di­ately de­liver that harvest to the mar­ket in the posthur­ri­cane phase,” he said.

Gra­ham said his team worked over­time in se­cur­ing farm as­sets.

“We en­sured that all our drains were cleared so that there would be an easy tran­si­tion to start-up. The pre­lim­i­nary as­sess­ment is that there was very lit­tle dam­age, and we are do­ing the Wil­liam Mah­food, man­ag­ing di­rec­tor of Wisynco Group.

nec­es­sary field san­i­ta­tion and dis­in­fec­tion in a bid to do har­vest­ing on Wed­nes­day (to­day),” he said.

The re­sult is that JP has 18 pal­lets of ba­nanas and another eight tonnes of pineap­ple pack­aged and ready to be re­leased into the trade the day af­ter while they pre­pare for busi­ness as usual with nor­mal har­vest­ing ac­tiv­i­ties.

On the ser­vices side of busi­ness op­er­a­tions, one of the most re­lied on com­pa­nies for sus­te­nance is KFC, which rolls out chicken meals from more than 30 restaurants na­tion­wide. That’s why the com­pany tries “to be the last to close and the first to open”, says Mark My­ers, the man­ag­ing di­rec­tor of Restaurants of Ja­maica Limited, the op­er­a­tor of 34 KFC and 10 Pizza Hut stores in Ja­maica. This puts the res­tau­rant chain in a hard place since it means bal­anc­ing the needs of two key stake­hold­ers.

“There are our cus­tomers who rely on us to pro­vide a hot, safe meal dur­ing any sort of times of cri­sis. Just as im­por­tantly, we have a com­mit­ment to our team mem­bers to en­sure that un­der these cir­cum­stances, they get home safely,” My­ers said, while not­ing that “to close a res­tau­rant, ... there is ob­vi­ously the lost sales op­por­tu­nity”.

IN­ESCAPABLE COSTS

Not all of those con­tacted could give ab­so­lute num­bers on the cost to ramp down and then ramp back up op­er­a­tions in a short pe­riod, but all said there were cer­tain in­escapable costs that are part of ex­e­cut­ing a pre­pared­ness plan.

“Our fac­to­ries run 24 hours, so we would have lost in that we had to shut down to give em­ploy­ees am­ple time to also make their own per­sonal prepa­ra­tions. This means about three days’ pro­duc­tion, and then we will prob­a­bly lose another half a day to­day in start­ing back up. We would also have lost about a day and a half to two days in de­liv­er­ies to our cus­tomers,” Mah­food said.

Some KFC and Pizza Hut lo­ca­tions re­mained open for busi­ness up to Sunday, which My­ers said added to the cost of ex­e­cut­ing the dis­as­ter pre­pared­ness plan.

“We go through the added cost of pre-po­si­tion­ing and pre­par­ing added in­ven­tory in key strate­gic lo­ca­tions. Then, in those in­stances where we shut down, we had to take on the added re­spon­si­bil­ity of mak­ing sure our team mem­bers got home safely,” he said.

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