By Stephen Cummings
Caribbean Net News Trinidad and Tobago Correspondent
Email: stephen@caribbeannetnews.com
PORT-OF-SPAIN, Trinidad: The National Flour Mills of Trinidad and Tobago, (NFM) has declared a TT$54 million after tax loss for 2007.
NFM is largely government owned and occupies a monopoly status in the local food market, with some 25,000 shareholders. It is the main supplier of rice, oil and flour, among other items, catering to local and regional consumers.
NFM's CEO Neil Rollingston, speaking with local media, said the company has been experiencing a consistent decline in profitability since 2004.
According Rollingston, the loss has been mainly due to a 70 percent increase in the cost of grains from foreign markets. He says the company has only been able to muster a meager 10 percent margin markup when it considers all of its products in the manufacturing sector.
"If the price in grains increases it impacts on our prices. We have just invested in a mill and what the mill helps to do is to reduce the 30 percent aspect of our costs. It increases the rate in which we can convert wheat to flour, we are dealing with an international market," said Rollingston.
NFM currently imports grains mainly out of New Orleans USA. Other source countries include Canada and Argentina.
Losses have also been due to increases in general production/operational costs in the international market. The production of ethanol in the international market has also impacted on local costs says the NFM official. Bio-fuels have been seen as one of the new ways of cushioning rising oil prices. And so there continues to be a shift to ethanol as an alternative in helping to produce wheat on acreages.
The NFM CEO is vowing to turn the company around within the next year, saying he cannot return to his shareholders reporting a further loss in revenue.
Among the new initiatives to increase profit, he says, will be an expansion in NFM's importation portfolio. This includes the importation of canned items such as beans and meats etc.
There are predictions that costs for several basic food items in Trinidad and Tobago will continue to increase, at least for the next few years, an indicator that the country's current 8.0 percent inflation could also increase again.
The inflation rate earlier this year reached its highest at 10 percent. However, it has been on a downward tread in recent months.
One of the real impacts in food prices has already been felt in the purchase of bread, as there continues to be no agreement between the NFM and the local bakers zssociation.
Rollingston is quoted as saying they have fallen down on having an open communication line with the Bakers Association, an issue he says they plan to address. |
