It is positive news for this Christmas and beyond that a leading player in Trinidad and Tobago and Caribbean business is able to cite record success in annual performance, and to look forward with optimism to expansion into strategic new sectors. Such is the upbeat picture from Business Express reporting on Neal & Massy Holdings' venture into the petrochemicals and downstream manufacturing, and from the conglomerate's own financial statements and projections also published last week.
Neal & Massy, like other regional firms, took a battering as a result of the world-scale economic downturn from 2009, which continues to exert negative impacts on economies and businesses within the Caribbean. One response from the T&T-based conglomerate has been to reduce its exposure in sectors like tourism, feeling the direct impact of decline in economic activity and income in Europe.
Accordingly, the results just reported by Neal & Massy (25 per cent increase in pre-tax profit) reflect apparently successful efforts to unload tourism-related entities in the group such as resorts and beach properties in Barbados. This has hardly been a painless exercise, but the company appears to have swallowed hard, and assimilated such losses as were entailed in cutting loose.
The Neal & Massy group is thus now able to represent itself as having "emerged from the economic and financial crises of 2009". It claims to have steadied its own ship on the basis of preserving the viability of its "core companies". †
From the Business Express last week, however, it is clear that the conglomerate remains unintimidated about thrusting into the uncertainties of the unknown. The reporting highlighted what is for T&T "onshore" companies a historic thrust into making something of the possibilities of an energy sector traditionally dominated by foreign investors.
Neal & Massy, long an energy industry services supplier through its Wood Group, has not moved alone. It has formed part of a joint venture that includes the Japanese Mitsubishi Corporation and the Texas, USA-based Integrated Chemical Company. As reported, the aim of the resulting consortium, estimated worth at $US1 billion, is to "engineer, construct and operate a natural gas-based integrated chemical complex at La Brea".
Output of the complex is projected at one million metric tonnes of methanol and 10,000 metric tonnes of dimethyl ether (DME). But its more eye-catching prospect is the creation of a downstream, job-creating, industry with export potential for manufacturing plastic bottles and coolants.
In essence, this describes the way to go for local firms that have so far largely kept their distance from investment and participation in the energy and petrochemical industries, with their foreign exchange-earning capacities. The Mitsubishi involvement appears especially significant at a time when, given present US capacity as a major natural gas producer, T&T will increasingly need the wit and the will to keep a competitive position in a dynamically changing industry.