Five years after being faced with the possibility of closure, Caribbean Container Inc. (CCI) Guyana’s sole manufacturer of corrugated cartons and paper for the local and export markets has immersed itself in a recovery programme under which it is seeking to “turn the corner” in two years, according to Chief Executive Officer Ron Webster.
A major debt write-off, the rehabilitation of the plant and a change in ownership are among the principal features of an initiative which Webster says has revived the fortunes of the company.
According to Webster the company had, through a process of unrelenting effort and legal advice secured a debt write-off in excess of 3 billion dollars and had, thereafter, negotiated a long-term loan with Development Finance Ltd. a Trinidad and Tobago-based development bank with favourable repayment terms and conditions. A portion of the amount acquired under the loan agreement was used to effect the payment of a compromise sum to Republic Bank to which CCI was heavily indebted.
Simultaneously, the assets of Demerara Holdings Inc, the majority shareholder in CCI were transferred to Technology Invest-ment and Management Inc. in accordance with a previously negotiated agreement.
Webster told Stabroek Business that the rehabilitation of CCI’s box making plant had enabled the company to increase its exports to Trinidad and Tobago and Barbados and to begin to explore additional market opportunities in Suriname. Additionally, according to Webster.
CCI has equipped its corrugator with a new US$300,000 electronic control system.
Webster said CCI recorded a considerable increase in sales in 2007 “even though the market continued to operate under severe pressure.” Webster said that the impact of rising fuel prices coupled with increased competition from suppliers in Asia had posed serious challenges for the company.
Asked about the security of raw material supplies for continued production Webster said that while the company had the option of pursuing “backward integration” to use hardwoods as a source of raw material that option was not cost-effective for the company.
In his review of the company’s 2006 annual report Webster noted that CCI had significantly reduced its liabilities which stood at just over $1.9m at the end of 2006.
