Annual Reports

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Annual Report 1999

Chairman's Review

The premixed concrete market fell by approximately 25% in 1999 with overall production declining to 236,000 cubic metres in 1999, compared to 315,000 cubic metres in 1998. As a result, Readymix (West Indies) Limited's concrete production and sales decreased by 29% from 192,000 cubic metres in 1998 to 137,000 cubic metres in 1999, resulting in a 24% decrease in Gross Revenues - from $94 million in 1998 to $72 million in 1999. Postponements and delays in major plant construction and infrastructural works negatively affected our revenue.

Mr. Walton James, Chairman

Net Profit after taxes declined by 52%, from $7.7 million in 1998 to $3.7 million in 1999, as it was further affected by provisions which were made at year end for liabilities and receivables relating to prior periods.

As indicated in the 1998 Annual Report, the Company pursued an overall strategy of consolidation and institutional strengthening in 1999, with major emphasis being placed on the development and implementation of improved systems, methods and procedures aimed at achieving enhanced levels of efficiency, economy and effectiveness in its operations.

A comprehensive Quarry Survey was conducted of our quarries at Melajo and Bermudez. The results show that, at the projected rate of usage, the existing reserves are adequate for another twelve years. We continue to obtain all of our raw material requirements from these two quarries and, during 1999, commenced a project for the implementation of weighscales and belt scales with a view to improving the accounting for production and operating efficiencies.

The reduction of concrete demand in 1999 led to a decision to rationalise our concrete plants. This resulted in the Westmoorings and Galeota plants being mothballed in the first quarter. The Tobago market was forecasted to be vibrant in the medium-term and a decision was taken to commence plant operations there starting from August 1999. We now command a substantial share of the Tobago concrete market. We have continued our strong focus on planned maintenance and this has resulted in high levels of plant availability and efficiency at all our facilities.

Implementation of the Central Dispatch System, through which all orders are received at the main office at Guanapo and subsequently dispatched via modem to the appropriate concrete plant, was completed in the first quarter of 1999. This new system has facilitated integration of the marketing and production processes, and the management of accounts receivable.

All of the computer hardware and software throughout the company was upgraded or changed during 1999 to versions that are Year 2000 compliant. Consequently, all of the systems rolled over into the new millennium without any problem. During 2000, efforts will be focussed on full implementation of the systems, user training, and system integration and interfacing issues.

The Mission Statement of Readymix (West Indies) Limited emphasises that the company is committed to exercising care and concern for the environment in its operations. In that regard, during 1999, a short-term project for water recycling at the Melajo aggregate processing plant was completed. A long-term plan, involving mechanical desilting, is currently being developed. At all our concrete batching plants, emphasis is placed on minimising dust emissions and maintaining aesthetically pleasing environs.

The gradual strengthening of the company's balance sheet during 1999 facilitated the acquisition by Readymix (West Indies) Limited of the concrete assets that were previously leased from Trinidad Cement Limited, and this transaction was concluded in December of 1999. While this has served to increase the asset base of the company by some $17 million, there will be no further operational impact since these assets have been in use by the company since 1998.

In November of 1999, the then General Manager and six other senior personnel resigned from the Company. While this proved to be a trying experience for the company, the Board acted expeditiously to deal with the situation. Mr Lucien Delpesh, a senior executive at Trinidad Cement Limited was appointed as General Manager, effective 1999 December 1999 and short-term measures were implemented to ensure that services to customers were not interrupted, while plans for filling the positions on a long term basis were put in place. All key positions have now been filled.

While the 1999 results have been below expectations, the outlook for the year 2000 is very bright and challenging. Our forecast for this year is that concrete demand will surpass the levels of 1998. We have already experienced this in the first quarter. Additionally, Readymix (West Indies) Limited has been awarded the contract to supply the 30,000 cubic metres of concrete for the Airside paving at the new Piarco Airport and is expected to begin supplying concrete for this project in May 2000.

We anticipate a strong demand for our product in the year 2000, which we are geared to satisfy, and look forward to results that will redound to the benefit of all of our stakeholders.

My thanks go to all our employees, their representative organisations, management and fellow Board members for their efforts and contributions during 1999.

Walton F James