Friday, April 29, 2016

EXIM to lower rate - Business -

EXIM to lower rate - Business - "The National Export Import Bank of Jamaica Limited (EXIM Bank) will be lowering its Jamaican-dollar loan rates by 0.5 percentage points and its US dollar by one percentage point for the 2016/17 fiscal year as part of plans to remain a competitive and viable lending institution.

The Jamaican lending rates now stands at 10 to 11 per cent, down from 11.5 per cent; while the US rates are down to between6.5 per cent and 9 per cent, from the initial 7.5 per cent.

According to the Estimates of Revenue and Expenditure for the year ending March 2017, EXIM Bank noted that as a result the repayment of maturing bonds in February 2016 under the National Debt Exchange (NDX), there has been a surge in liquidity and hence the availability of funds for loans to producers and consumers at affordable rates.

“Accordingly, in order to remain competitive and viable, the bank plans to reposition itself by adjusting its interest rates for 2016/17. The bank will also seek to refine its strategic initiatives aimed, inter alia, at expanding its customer base and growing the export sector,” the report stated."

In an emailed response to Jamaica Observer queries about the percentage reduction in interest rates, EXIM Bank manager, trade financing and risk management, Lisa Bell, stated that, “The bank acknowledges the improvements in the overall environment, including a general reduction in rates compared to last year this time.”

“Given the importance of interest rates as a factor in improving access to financing, the bank will continue to seek funding which allows it to offer competitive rates to its clients, particularly those SMEs in emerging sectors which hold the potential for stimulating economic growth,” she continued.
Six years ago, the bank dropped its lending rates to between 10 and 11.5 per cent for Jamaican-dollar loans, and 7.5 to nine per cent for US-dollars loans. Before that, the EXIM Bank kept the rate consistently at 12 per cent, in comparison to the average 30 per cent lending rate at the time.
More recently, the bank appointed a six-member board of directors that met last week to explore strategies that will offer robust support of the small and medium-sized (SME) business sector. The new board has since committed to doing its part in stimulating growth in the Jamaican economy.
While speaking to management and staff at the bank’s Hope Road offices, chairman of the board, Gary ‘Butch’ Hendrickson, stated that, “EXIM Bank is perfectly poised to reassert its relevance to Jamaicans, and specifically to the SME sector. Our support of this sector through skilfully crafted and relevant products and services is critical in fostering job creation, increasing foreign exchange earnings, and ultimately positioning Jamaica as the net exporter we know it can be.”
In support of the chairman’s statements, Bell outlined some upcoming initiatives by EXIM to target SMEs, including new products for emerging business sectors, an intensive programme with businesses in western Jamaica, and targeted business advisory services, including workshops to help SMEs become more competitive.

'via Blog this'

NCB profit hits J$6 billion at the six-month mark - Business -

NCB profit hits J$6 billion at the six-month mark - Business - "KINGSTON, Jamaica — The commercial banking portfolio of the National Commercial Bank Jamaica Limited (NCBJ) led profit for the finance house for the six months ended March 31, 2016, which totalled J$6 billion for all segments.

Overall, for the period ended March 31, 2016, net profit saw an increase of $594 million to the $6 billion mark or 11 per cent compared with the six months ended March 31, 2015.

For the last quarter, the three months ended March 31, 2016 net profit was $3.6 billion, an increase of 10.2 per cent, or $332 million.

Comments attached to the results state that the commercial banking activities, comprising the Retail & SME, Payments Services, Corporate Banking, and Treasury and Correspondent Banking segments, produced combined operating profits of $4.6 billion for the six months — an increase of 6.9 per cent, or $299 million, when compared to the prior year."

'via Blog this'

IMF: Regional economies to contract 0.5% | Business | Jamaica Gleaner

IMF: Regional economies to contract 0.5% | Business | Jamaica Gleaner:

Latin America and the Caribbean (LAC) will post an overall 0.5 per cent economic contraction in 2016, the International Monetary Fund (IMF) forecast in a report issued on Wednesday, capping the region's worst two-year period since the 1982 debt crisis.
But the IMF said the region is expected to rebound to 1.5 per cent growth in 2017, avoiding the "lost decade" phenomenon that marked the 1980s.
The tourism-dependent segment of the Caribbean is projected to grow by 2.2 per cent in 2016, while the commodity-dependent economies are projected to contract 0.6 per cent. In 2017, both groupings are projected to grow by 2.3 per cent and 2.1 per cent, respectively.
Jamaica is forecast to grow 2.2 per cent in 2016 and 2.5 per cent in 2017.
The LAC region will be weighed down this year by shrinking economies in Venezuela, Brazil and Argentina.
While Brazil is seen posting a 3.8 per cent contraction this year and Argentina is on course for a one per cent shrinkage, Mexico and Chile are expected to grow modestly, at 2.4 per cent and 1.5 per cent, respectively.
The report blames "weak external demand, further declines in commodity prices, volatile financial conditions and ... some important domestic imbalances and rigidities" as common factors for the region's poor performance.
The IMF predicts that Argentina should return to growth in 2017, and Brazil's economy should stop contracting by then. But Brazil's volatile political scene, including an effort to impeach President Dilma Rousseff, could play a role.
The report warns that "a further deterioration of the situation in Brazil could lead to a sudden repricing of regional assets, reduced demand for exports among trading partners in the region and an increase in perceived risk".
The exception is predicted to be Venezuela. The report said the region's most troubled economy contracted by 3.9 per cent in 2014, by 5.7 per cent in 2015 and is expected to shrink by an astonishing eight per cent in 2016.
Venezuela could trim its GDP contraction to 4.5 per cent in 2017, but the country's economy is being punished by an energy crisis, spiralling inflation, shortages and deep political divisions.
Venezuela began imposing a four-hour daily blackout around the country this week to save power. And on Tuesday, President Nicol·s Maduro announced that millions of officials will now work only Mondays and Tuesdays, taking the rest of the week off in a bid to save electricity.
Latin America and the Caribbean posted a collective 0.1 per cent contraction in 2015.
The IMF report said that "masks the fact that many countries continue to grow, modestly but surely, whereas a small number of economies - representing about half of the region's economy - face recession largely as a result of domestic factors".
'via Blog this'

Seprod unveils upgraded biscuit plant, announces price cuts | Business | Jamaica Gleaner

Seprod unveils upgraded biscuit plant, announces price cuts | Business | Jamaica Gleaner:

Seprod Group has made a $285-million investment in its subsidiary, International Biscuits Limited (IBL), to pump up production of the food line.
It precipitates what appears to be a price-driven, high-volume strategy as IBL chases additional market share in Jamaica and the region.
Equipped with a new oven and liquid oil spray machine, the sweet and savoury biscuit maker expects to lift production by 50 per cent to meet growing demand as well as global and local trends in production quality, Seprod said.
Come May 1, Seprod will also slash the price of all biscuits made by IBL by 20 per cent, Seprod CEO Richard Pandohie announced on the tour of the upgraded facility on Wednesday.
"The $285 million adds to the over $1 billion in investments that has been spent in the last 15 months upgrading and retooling Serge Island Dairy factory; Serge Island Farms; Jamaica Grain and Cereals and the Golden Grove sugar factory, with more to come," Pandohie said.
It all falls under a $5-billion capital programme that Seprod is executing across the group.
The upgrades at the biscuit plant "will significantly improve our productivity and reduce our cost profile," Pandohie said.
The IBL operations date back to 2007 when Seprod purchased the manufacturing assets of Kraft Foods Jamaica Limited.
Now the plant produces biscuit brands such as Butterkist, Snackables, Pic Nix, as well as Ovaltine.
The company has a co-packing arrangement with United Kingdom-based Twining and Company Limited for the manufacture of its Ovaltine biscuits, which are exported to several global markets.
Seprod's own products are exported to the United States and Canada to "over 3,000 customers," the company said.
Around 15 per cent of IBL's production is now exported, mainly the Ovaltine brand, said Pandohie, which Seprod hopes to push to 22 per cent by the end of 2016, he added.
The upgrades will allow IBL to go after more co-packing contracts for the production of crackers and sweet and savoury biscuits, Seprod said.
Some $65 million of the new IBL investment was spent on commissioning a variable-profile liquid oil spray machine, which makes Seprod the only company in the Caribbean to boast the technology.
The equipment dispenses oil and slurry mixtures, needed as ingredients in the biscuits, to specification, thereby reducing the amount that would be wasted and, by extension, the costs associated with waste disposal, Seprod said.
The company expects that to lead to savings on raw materials, and says the efficiencies to be realised will "allow for more competitive pricing of our products".
A Pro-Series Convention oven was also added, allowing the company to increase capacity utilisation of its 53,000-pound per day dough maker.
"It was not being used at full capacity, but with the new oven we can now increase production," General Manager of IBL Rupert Ashman told the Financial Gleaner during the tour.
The new oven "has better speed and better baking capabilities and it allows for uniformity in the product, so you don't get darker biscuits; the colour is the same all through(out)," said Ashman. "We now get 50 per cent more biscuits off the line," he added.
On the tour, Seprod made a pitch for Jamaicans to develop bigger appetites for locally made goods, even while noting it would be making an aggressive play for regional market share.
"We have people in Trinidad and Haiti. We are not going to visit those markets every now and again, we will be living in the markets to build our business and bring jobs back to Jamaica," Pandohie said.
"We are now challenging the Jamaica consumers to play their role in bringing back our jobs," Pandohie said as he urged locals to support Jamaican companies that are investing in their businesses.
Pandohie told the Financial Gleaner that Seprod hopes to snag 30 per cent of the $3-billion market for biscuits that are imported annually.
"The idea is really import substitution," he said.
"As manufacturers, we can be proud of what we are all doing, we don't have to be a crab in the barrel. There is enough for all of us," he said.
IBL now runs three eight-hour shifts, five days per week. Ashman has not ruled out increasing the production hours to meet the targets set.

'via Blog this'

Magna Jamaica to double investment in Hyundai market | Business | Jamaica Gleaner

Magna Jamaica to double investment in Hyundai market | Business | Jamaica Gleaner:

Magna Motors Dealership Jamaica Limited, which has ambitions to become a top motor vehicle seller domestically, will double its current investment in the Hyundai dealership on the road to that goal.
The company says it plans to expend an additional US$10 million ($1.2 billion, of capital by 2017, matching the amount already spent since its entry in Jamaica last year.
But to get anywhere close to pole position in the market, Magna Jamaica will have to overcome the formidable positions held by Toyota Jamaica, whose brands eclipse others in popularity locally, as well as other top dealers. Still, Magna Jamaica's Managing Director Juan Vargas believes the company can begin chipping away at the SUV segment.
However, Vargas is not saying how many vehicles his company has been able to sell since its debut, nor the target sales over coming years.
Trade Board Limited, which has comprehensive records on all vehicles imported into Jamaica, said it needed several days to pull the current data together, so it was not immediately clear what market share the brands currently hold.
New showrooms
New Hyundai showrooms were unveiled on Wednesday, which means that Magna can now more comfortably display its offerings and relocate its sales force from the compact space they shared with the service centre staff at Balmoral Avenue in Kingston. Still, those showrooms, developed on leased property at a cost of around $6 million, are temporary.
Vargas said the service centre, which is state-of-the-art, was completed in "four short months" after landing the Hyundai dealership.
To date, the company's investment in rolling out the dealership has topped $1 billion in local currency.
"Right now, there is more than US$10 million that was not in the Jamaican economy before. We have that in inventory, infrastructure and training. We're looking to double that since the new state-of-the-art facility, that will be our permanent base, will cost more than US$5 million," Vargas said in an interview after the official opening of Magna's showroom at 27 Old Hope Road.
The US$5 million referenced is to be invested in more permanent showrooms for Hyundai.
Still, the dealership is without a bonded warehouse. Jamaica Customs Agency says Magna has approval to clear vehicles directly from the wharf, while noting that the dealership is in the process of acquiring planning permits for the warehouse premises.
It's understood that Magna is now awaiting KSAC approval, after which Jamaica Customs will assess the property and pass its own judgement on whether it is suited for the purpose of warehousing the vehicles.
It will be located on property leased by Magna in Kingston.
Vargas confirmed that the company is yet to set up its bonded warehouse, but said it should be in place by mid-year.
"Our understanding at the beginning is that if you don't have five years as a business in Jamaica, then you can't set up a bonded warehouse," Vargas told the Financial Gleaner. "Since that, we have gone through the regulatory process and we expect that in another two months at most we will be using that facility," he said.
Hyundai is the fourth-largest motor car manufacturer in the world behind Toyota, VW, and General Motors.
In Jamaica, where the brand has been sold since the 1990s - Key Motors was the local distributor until Magna Motors of the Dominican Republic won the dealership - it's unclear how much its popularity has grown over time.
Vargas says Magna will be offering the full range of Hyundai motor vehicles, including the Grand i10 in sedan and hatchback, the Accent, Veloster, Creta, Tucson, Santa Fe Sonata and the H1 panel van.
Cementing the brand in Jamaica "will take time", he acknowledges, but adds that the company expects to leverage business through offerings such as its five-year warranty and competitive prices.
"We have a good price that is affordable; and in Jamaica, where the SUV is king, we have at least three types that can satisfy every customer," the managing director said.
So far, the company's infrastructure comprises the new Old Hope Road showroom and the six-bay service facility. But once the Kingston operations are fully under way, Magna Jamaica plans to establish another facility in Montego Bay. The expansion is included in the US$10m programme.

Magna's Jamaican entry has had controversial moments. The then Opposition Spokesman on Industry and Commerce Karl Samuda - now the minister in charge of the same portfolio - launched a broadside against Magna in Parliament.
He charged that the new Hyundai dealership was depriving the government coffers of revenue, saying they had not made proper arrangements to import cars into Jamaica. Magna Motors has a free zone arrangement through Kingston Wharves Limited, where they are allowed keep motor vehicles at the wharves for re-export to the region.
That arrangement had led to concerns of potential leakage of duty-free cars into the Jamaican market, but both Magna and Jamaica Customs have given assurances that all requisite duties are being paid.
'via Blog this'

Wednesday, March 9, 2016

Decentralizing IT

For decades, the classic model of how a business organizes its computer services department was to establish a separate IT department with an independent management structure which may extend all the way to the executive suite. Over the years, the autonomy of that centralized IT function took on almost mythic proportions and in some cases resulted in abusive attitudes and ways of doing business that almost gave the impression that the businessexisted to serve the IT department rather than the other way around.

This was a particularly prevalent model when all business computer processing was done by a large centralized mainframe computer, usually made by IBM. These mega computers are and were expensive and complicated to program and operate which dictated that to be successful, a business had to keep on staff a small army of computer specialists, many of whom seemed to speak an entirely different language and come from a different culture than those in the rest of the business.

This was a natural and necessary business paradigm under the circumstances when “big iron” ruled the IT community. However, the last several decades have seen changes to how IT gets its business done. First was the introduction of smaller, powerful systems driven by operating systems like UNIX that were capable of great efficiencies that challenged the supremacy of the mainframe in business.

The movement toward network computing which was a natural business evolution to facilitate greater data access and to build stronger communications between spread out departments in the business world further eroded the need for one centralized powerful computer operated by a select few who spoke a cryptic language. Network computing started the process of democratizing computing power in the business world. With the new dominance of the internet and the need to take the business paradigm into cyberspace, the business model of decentralized data processing has taken on new meaning and importance.

In many businesses, the final stage of IT decentralization has begun to become a reality. By locating centers of operations and development authority and responsibility directly at the department level, the efficiencies of IT decentralization have become possible at every level of the business.

This trend in locating department specific applications along with the computing resources to support them to the department level is a significant change to the business culture. Not only do the departments who benefit from those applications take ownership over the operation of those computing systems, programming and development resources will be become part of the department structure as well.

For example, if the HR department has a suite of applications that are used to tracking payroll, benefits, etc., that application will be placed completely under the authority of HR. As such, areas of authority that were formerly the sole responsibility of IT such as systems analysis, development, programming and computer operations will become part of the HR management structure. As a result, each department develops an ability to converse in IT terminologies which results in a higher IT awareness across the business that is healthy for long-term analysis of needs and resources to meet those needs.

This is not to say that new problems and challenges do not come along with the decentralization of IT. Some IT issues must be addressed at a global level because they impact the business as a whole. So there is still need for a CIO and some high level IT controls to which each of the departmentalized systems must be accountable.

Further, the issue of systems integration and finding synergies between systems to maximize the efficiency of systems becomes more difficult when each department operates its own IT operation. If each department owns and operates its own hardware and network, communications across the business are challenged and there is a higher chance that underutilization of systems will be a result. Quality control at the systems administration level is more difficult because systems administrators may be answerable only to the department level more so than to thebusiness in general.

These organizational issues must be resolved at a high level so the transition from a centralized to decentralized way of doing business can be successful. But the rewards of putting computing power at the department level outweigh the risks of failure and justify the effort that will go with such a large change to the corporate culture