Caribbean Container Inc (CCI) has disclosed in its recently released 2021 Annual Report that despite a harrowing operating year in 2021, the company’s operations nonetheless recorded a gross profit of $445 million, a 1.7 per cent increase on its gross returns for 2020.
The company’s gross profit disclosure, however, was tempered by the seemingly more significant announcement contained in the report that the company’s paper recycling plant, which the company had said, in 2017, would have been closed for three years, would not now be re-opened. This means that it will, henceforth, be relying entirely on imported paper to support its operations.
The company’s Managing Director and Chairperson of its Board of Directors, Patricia Bacchus, said in her report, meanwhile, that the company’s performance was realised against considerable odds which it faced in a year that had been underlined by the ravages of the coronavirus pandemic and its impact on the local and international business communities.
The CCI 2021 Report cites “significant supply chain disruptions, freight rate escalation and raw material price increases” all of which were linked, to varying degrees, to the disruptive effects of the global coronavirus pandemic as factors that contributed to the challenges that faced the company last year. She said in her report that while “cushioning this and keeping cost of sales contained was the company’s strategy 2020, more challenges were to emerge going forward so that, “by the end of 2021 freight rates from some jurisdictions had increased by 300% and the prices of some categories of raw materials by almost 100%… ” These conditions, she said, had worsened at the beginning of 2022, deteriorating even further with the outbreak of Russian hostilities in Ukraine in February.
What is now CCI, commenced operations in 1983 under the name SAPIL. The company was privatised in 1992 and began to operate under its current name in 1999. In January 2007 the majority shareholder “Demerara Holdings Inc,” was acquired by Technology Investments and Management Inc, and the company underwent restructuring.
CCI had announced the suspension of its Paper Recycling Plant and its reverting to imported paper as the primary raw material for its box manufacturing plant. Back then, Bacchus had been quoted by the Stabroek News as saying that the issue of the company’s recycling operation had been under consideration since 2015, based on what she had said then were “design limitations and quality performance, regional and extra regional competition” and “issues affecting cost of production.”
In its 2021 Report, the company’s Chairperson stated that the CCL Board had “revisited the matter of the Paper Recycling Plant” and “having considered the fact that the conditions which influenced the suspension of the plant continued to prevail in 2021, including substantial capital retooling costs, the quality limitations of recycled paperboard and matters related to cost of sales, the Board took the decision to permanently close the recycling plant.”
Meanwhile, insofar as challenges, going forward, are concerned, Bacchus intimated in the company’s annual report that CCL was not “out of the woods” yet. Contextually she alluded to “a number of related as well as new threats,” not least, supply disruptions “resulting from the failure of output to keep pace with demand once restrictions were lifted and economic activity rebounded.”
“Similarly, with a boom in exports logistics and transport, constraints were heightened due to overload as capacity lagged, resulting in significant increases to transport and freight costs as well as delays”, she said.
