The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition's leader yesterday called on the Government to urgently dispel any notion that PharmaChem Technologies' "devastating closure" was caused by local ease of doing business impediments.

Michael Pintard, also the Marco City MP, told Tribune Business that the Davis administration must "combat the perception that Grand Bahama is not fertile ground for future investment" after the pharmaceutical producer announced it will cease operations this Friday with the loss of 120 jobs (see main article).

While there were signs last night that PharmaChem's closure has resulted from company-specific challenges, he added it was vital to maintain investor and business confidence in Grand Bahama by clarifying that "none of the local" ease of doing business factors has driven the shutdown.

"It is our hope that both the Grand Bahama Port Authority (GBPA) and the Government will move quickly to speak to this issue, and investors both Bahamian and foreign, to combat the perception that Grand Bahama is not fertile ground for future investment," Mr Pintard told this newspaper,

"The closure of such a significant player raises questions if there are challenges in Grand Bahama itself that makes it an unattractive place to sustain business enterprises even though the company catered primarily to the international community.

"We don't want the message to be that there are local impediments to sustaining operations in The Bahamas. It's important that it be clarified that none of the local conditions contributed in any way to this company ceasing operations."

As reported by Tribune Business today, PharmaChem's closure stems from the decision by its sole and major client, Gilead Life Sciences, to cease providing financial support after the Grand Bahama plant's $400m expansion proved unable to meet its production timelines and volumes. The expansion was hit by significant cost overruns, and also suffered delays due to the impacts from COVID-19 and Hurricane Dorian.

Mr Pintard, meanwhile, described PharmaChem's decision as "devastating for the community" while questioning how much advance warning had been provided to the Davis administration. Besides the loss of up to 120 jobs, which were paid "better than average", he said sub-contractors and suppliers who provided goods and services to the drug maker will also be dealt a financial blow.

"The multiplier effect of these closures is going to inflict a significant amount of pain in the Grand Bahama community," he added. "This most unfortunate news comes at this time when we are struggling to get other businesses started in Grand Bahama."

The Ministry of Grand Bahama, in a statement responding to the PharmaChem decision, sought to talk up "significant opportunities for new employment" by touting a combined $1.8bn in investment projects targeted at the island.

These included Carnival's $500m Celebration Key cruise port; Grand Bahama Shipyard's $600m investment in two new dry docks; Liwathon's $71.3m spend on its newly-acquired South Riding Point terminal; and $200m investments apiece in Grand Bahama International Airport and Freeport's health sector.

"We remain optimistic about the economic future of Grand Bahama as we recover, rebuild and continue to revolutionise," the Ministry of Grand Bahama added.

Kwasi Thompson, the Opposition's finance spokesman and another Grand Bahama MP, yesterday questioned whether PharmaChem's closure has any implications for an industrial/manufacturing sector which, via the likes of Polymers International and Buckeye Bahamas (BORCO), has played a critical role in sustaining the island's economy for many years.

The pharmaceutical manufacturer's closure represents a hit for Bahamian economic diversification, and Mr Thompson told Tribune Business: "I think it's a severe blow. I think losing over 100 employees all at the same time is in itself a severe blow.

"PharmaChem is one of the leaders in the industrial sector and, I would venture to say, they have numerous other sub-contractors and service providers that serve PharmaChem that will now be severely affected. It all has a domino effect. I think it will be a serious blow to the island.

"All through the tourism downturn and Hurricane Dorian and the pandemic we have looked to the industrials as a steady source of economic development, and to have one of the major industrials fall is again a very serious blow."

Mr Thompson, urging the Government to investigate whether PharmaChem's closure is a sign of wider problems in Freeport's industrial sector, said: "We have to question what does this mean for the other industrials; how strong are they? We have to ask some very serious questions at this point.

"It's up to the Government to make that determination, to make sure this does not have an affect on the other industrials and wider economic development for the island. It's a major, major industrial and we are very concerned in terms of what has happened."

The east Grand Bahama MP, while saying it was too early to determine the PharmaChem closure's impact on investor confidence, said: "These are the types of questions the Government has to have answers for. We call upon the Government to look at what the reason was to ensure it has no affect on investor confidence and make sure there's no impact on other industrials we have.

"However, the focus today should be on the 100 employees and their families, ensuring their severance entitlement is met and all government agencies provide whatever assistance is required. Given that this industrial company was dealing with pharmaceuticals, we need to ensure that whatever clean-up process needs to happen, environmental health is there to monitor and ensure all protocols are in place."

The PharmaChem plant could prove attractive to potential purchasers given that they will inherit a relatively new $400m investment, and The Bahamas' best hope would be that a buyer or several emerge quickly.

Pharmachem sits on 22 acres of the original site of the former Syntex plant, which it acquired. It leased an additional 40 acres from the Grand Bahama Port Authority (GBPA), and purchased another seven acres to facilitate construction of its new plant for a total of some 70 acres.

Mr Thompson, meanwhile, added in a statement: "The Opposition is shocked and disturbed at the news of the abrupt closure of PharmaChem Technologies. They have been a leader for over 20 years in the industrial sector in Grand Bahama. The industrial sector has been a pillar of strength for Grand Bahama and has seen the island through many difficult years.

"What is even more shocking is the fact that there was no public warning or notice. Our hearts go out to the 100 employees who were highly skilled and well-paid. It will also severely affect all the sub-contractors who did business with PharmaChem. The entire island will be severely affected.

"The Government must ensure that all of the employees and families represented receive their entitlement and any assistance required. All relevant Government agencies should be ready to provide whatever assistance required. We also call upon the Government to ensure that, in their closure process, all proper environmental health procedures and clean-up are followed."