WEST Indian Tobacco Company Ltd (WITCO) is looking to weather the storm over the next two weeks as the country restricts movement due to the coronavirus. However, if the situation prolongs it can have detrimental effects on the company.
These are the sentiments of the new managing director, Laurent Meffre, as he says his main priorities at this time are the health and safety of his employees and job security.
A French national, Meffre, 47, joined WITCO on January 27, 2020 as general manager. He was appointed a director of the company on April 1.
Meffre served in several senior roles within the British American Tobacco Group. His last appointment was in Lagos, Nigeria, as general manager, where he had responsibility for 25 markets.
Meffre replaces managing director Jean-Pierre Du Coudray, who retired on March 31 after 19 years at the company, nearly 14 of which he spent as the cigarette producer’s chief executive.
has to be done
Speaking with Express Business, Meffre said WITCO supports the Government’s move to shut down non-essential business in order to get a handle on the deadly virus.
With the latest announcement by Government on Monday that the stay at home measures have been extended from April 15 to April 30, the managing director said proposals are being discussed with the Trade and Industry Ministry, on how the factory, located at Mt, D’or in Champs Fleurs, can operate on extremely reduced manpower, with strict Covid-19 guidelines being adhered to.
“We are coming up with measures to protect the workers and ensuring that personal protective equipment (PPE) is given to them, while in the factory. Some countries, such as Honduras and Venezuela whose government implemented similar measures like Trinidad and Tobago, saw the impact it was having on the economy and allowed WITCO to operate their factories under very strict conditions.”
He is expected to get feed back from the ministry later this week on the proposal.
Meffre said as a responsible company “we have complied with the laws and regulations and all our employees who are affected and cannot work from home are on paid leave”.
“Paying our tax is an essential expense, paying our salaries is an essential expense. And anything else that does not immediately preserve the financial health of the company and its employees are put on the back burner, so we can preserve the cash flow which is essential to any business,” Meffre said.
He said all this means is that some prioritisation has to be done in order to weather the storm.
“So we are going to protect our people as much as possible. We will hope it does not extend to a period of months as that will bring its own challenges to the whole world economy. But that’s why we survive and support the Government. We believe that the coming period will be difficult, but once proper measures are taken it will eventually pass.”
Cigarette sales during pandemic
The new managing director said in terms of figures and percentages it is actually difficult to say because the company is still shipping on an almost daily basis to the 23 countries that it supplies.
“Obviously, one of the supply channels which has been affected because of COVID-19 has been the entertainment sector which is non-existence at this time.
“However, other channels remain available, by law, such as supermarkets.
“So once we see some buying, at the moment and obviously all the people involved at the entertainment channel I am sure are going through a difficult time, it shows that consumers are going to adjust.
“Companies need to find new ways of working as the consumers are finding new ways of living and new ways of consumption.”
The West Indian Tobacco Company Limited, is a public company whose shares are listed on the Trinidad and Tobago Stock Exchange and held by over 3,000 shareholders.
British American Tobacco Caribbean is majority shareholder with 50.12 per cent.
WITCO as a company on the stock exchange with a market capitalisation in excess of $8 billion, 49.88 per cent is actually shareholding by local shareholders such as the Government, and the National Insurance Board (NIB) along with other companies.
Meffre said: “WITCO’s direct contribution every year into this country is $650 million.”
With regards to the foreign exchange challenge this country has been facing, he said because WITCO exports to many markets throughout the Caribbean, it brings back US dollars to the country.
“On an annual basis, WITCO brings back about US$20 million and that’s very important to understand, because there are no other factories, that hold such a prominent role in the Caribbean.”
In terms of the illicit trade that continues to be a major challenge for the company said Meffre.
“Currently, there are over 20 brands of illegal cigarettes coming into our shores from China, India and Germany and other countries with incorrect packaging and labelling, and based on their pricing, it is suspected that duties and associated taxes are not being paid. Illicit trade continues to deprive the Government of revenue collection efforts and pose serious health risks to consumers.
The level of illicitly traded cigarettes is estimated between seven to ten per cent of the market,” Meffre stated.