Business

The lessons of Sandy

BY SHAMILLE SCOTT Business reporter

Wednesday, October 31, 2012    

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HURRICANE Sandy brought damage to micro, small and medium sizedbusinesses. But she didn't leave without giving some business lessons.

“We live in the Caribbean, anything can happen,” said Michael Movery, managing director of Ratatoulle Limited. He and his wife Jennifer produce Coco Brown's Pepper Sauce. The company manufactures pepper sauces and gourmet Jamaican sauces.

Natural disasters aren't new to Jamaica and business owners must put a contingency plan in place, said Movery.

Small businesses have to think big, he said. To remain sustainable, every time he produces, he stocks up on supplies.

Though the farmers who supply him with peppers advised him that they will be out of peppers for the next few months, Movery has enough stock to last for two months. He therefore doesn't foresee any problems with supplying businesses with the sauces. He sells to gift shops in the Sangster and the Norman Manley international airports and Ocean's 11 at the Ocho Rios Cruise Ship Terminal.

The pepper sauce producer operates from St Mary and has suffered from a power outage. Movery uses the electricity from his parents business, one that is larger and has a generator.

Unlike Movery, some MSMEs are feeling the impact of Sandy's wrath.

Sandy hit Jamaica, uprooting trees, and downing utility poles with wind speeds exceeding 80 miles per hour.

Hairdressers, for example, and other businesses who cannot operate without electricity have been affected as 70% of the island lost electricity after the passage of the weather system.

“Many businesses' purchasing power have gone down,” said Rosalea Hamilton, president of the Micro, Small and Medium Enterprises (MSME) Alliance. Some businesses cannot operate without power, she added.

The Jamaica Public Service (JPS) said that it would take several more days to get power to customers who are still without electricity.

But the extent to which the businesses will bounce back is dependent on their capacity to store goods and their level of preparedness, Hamilton said.

Prior to Sandy, small businesses were having a hard time, she said.

“Some may have to start over, others will bounce back, Hamilton added.

Organic jewellery producer, James Edwards, in St Catherine was hit hard by the hurricane. He said Sandy affected 80 per cent of his business. “ I lost production time and raw materials, Edwards said. The shed, which he uses to make his jewellery, which includes, the earrings, necklaces, bracelets and souvenirs, was blown away.

A despondent Edwards told the Jamaica Observer that jewellery-making which he has been doing for more than three decades, is his only source of income.

“This is what I use to survive and send my children to school,” he said. Edwards distributes the items to craft shops in Ocho Rios and some gift shops.

In the meantime, he works without the machines that cut bullhorns, which he uses to make jewellery. Until the business returns to normalcy, he strings the beaded necklaces and bracelets by hand, and works with the materials that were not taken by the wind and rain.

The Jamaica Business Development Corporation (JBDC) said it doesn't have the capacity to give some loans to its clients. As to the way forward, CEO of the JBDC, Valerie Veira, said the company will have to re-emphasise the need to prepare for disasters.

Though she acknowledged that one cannot eliminate all the possible risks of a business. Veira said: “Include risk management in the business plans.” This, she said will limit the impact of natural disasters. “It has to be evangelical, it cannot just start and end at training sessions,” she added.

Some business owners who have felt the impact of the disaster can afford to wait.

Manufacturer of bay rum and black shoe dye Jacqueline Turner said her business Black Hawk Manufacturing Lab has not been severely impacted. Her only setback is that the sources of the glass and plastic bottles are unable to provide the containers.

She supplies variety stores and a pharmacy with her products. Though her production has been disrupted, Turner said her customers understand.

“Everyone knows that there are problems with electricity. It will take some time,” she said.

As is the case with disasters like hurricane, farmers have also been affected.

The agricultural sector, based on preliminary estimates, sustained losses of $750 million. That figure excludes the most adversely affected parishes of St Mary, Portland, parts of St Ann, and St Andrew. This estimated loss in crops could be in excess of $1 billion, affecting crops such as banana and plantain, coffee, sugar cane, breadfruit and cash crops (vegetables), said Senator Norman Grant, president of the Jamaica Agricultural Society.

Minister of State in the Ministry of Agriculture Ian Hayles said, in terms of assistance to commercial farmers, the Government will be looking to cut interest rates, in order to allow them to go back into production as soon as possible.

"The ministry will also sit (this week) and do some assessment, in terms of reallocation, to see how best we can put the farmers back into production," Hayles said.

Hamilton said businesses that have been set back by the hurricane should, at best, think outside the box. “If you cannot afford to wait, find alternative sources of coping,” she said.

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