The Tribune

* Caribbean Bottling cuts worker hours to 60-70%

* Lockdown resulted in 'six figure' product write-off

* $2m Turks & Caicos expansion also delayed

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas' Coca-Cola supplier yesterday revealed its sales are down "between 30-40 percent on any given day" with reduced demand forcing it to cut staff hours by a similar proportion.

Walter Wells, Caribbean Bottling Company's (CBC) chief executive, told Tribune Business that the COVID-19 lockdown and restrictions have impacted "a huge component of our business" in terms of the hospitality and restaurant businesses it supplies.

Disclosing that the company has avoided permanent terminations, and only placed 25 of its 230-strong workforce on temporary furlough, Mr Wells said the drop-off in sales meant most staff are presently working between 60-70 percent of their normal hours as the necessary production volumes have consequently been reduced.

He added that Caribbean Bottling Company also had to "write-off" a six-figure sum at the height of the COVID-19 lockdown after it was left with surplus product that it could not dispose of before it passed its sell-by date.

And the pandemic has also hit the company's international plans by delaying the $2m construction of a new warehouse and office facility in Turks & Caicos, which will act as the distributor for all the drinks brands that are manufactured in Nassau.

Despite the hit to a venture that could produce badly-needed foreign exchange export earnings for The Bahamas, Mr Wells said he and Caribbean Bottling Company are "certainly not complaining" and remain focused in managing through COVID-19 "so we come out in one piece on the other side" of a crisis likely to last "well into 2021".

He added: "Obviously the hotels and restaurants are a huge component of our business. Bars and nightclubs are also closed, and it's been a pretty huge hit. Our sales are off by anywhere between 30-40 percent on any given day of the week depending on what's open and what's shut.

"Even the quick service restaurants, the fast food restaurants, have been substantially limited over the past six to seven months as to what they can and can't do. All of that impacts our business but it is what it is. We are still operating, and have not had to permanently terminate anyone because of it.

"Out of our roughly 230 employees, at the moment we probably have 25 laid-off on furlough because there's really nothing for them to do, and the rest are pretty much working reduced shifts because less sales means less demand and less need to produce," Mr Wells continued.

"We have split the hours that are necessary between the employees so everyone earns a bit of something rather than sending people home and rely on the National Insurance Board. Most people are working between 60-70 percent of what they would do normally...... It hurts financially, but our view is this will not last for ever."

Mr Wells said Caribbean Bottling Company, which produces and distributes brands such as Schweppes, Fanta, Sprite, Barq’s Root Beer, Dr Pepper, Goombay Punch, Barritt’s Ginger Beer, Canada Dry, Vitamin Water, Dasani, Powerade, Minute Maid, Monster and Flavorful Juices, as well as Coca-Cola from its Sir Milo Butler Highway headquarters, was especially reluctant to lose trained employees given that all would be needed when business levels "ramp up again".

While the firm has not experienced any raw materials shortages or logistics challenges due to COVID-19, Mr Wells added: "The flip side of that is we tend to buy two to three months in advance and, in some cases, with the significant decline in volumes we ended up with too much raw material. We had a surplus when things came to a standstill, but slowly worked our way through that.

"We did lose a fair bit of product that had already been purchased. Fountain beverages that hotels and fast food restaurants use, we normally have a month's supply on the floor. When things were shut down we had to write most of that off. It was big enough, certainly six-figures, but there's no use crying over spilt milk."

Looking forward, Mr Wells added that COVID-19 had also impacted its expansion plans beyond The Bahamas. "Certainly one of the biggest initiatives it has hindered us on is the Coca-Cola business we also operate in Turks & Caicos," he told Tribune Business.

"We are planning to build a new building there, and COVID-19 has slowed us down considerably. Turks & Caicos was closed down until July, so we're now trying to get back on schedule. It's a warehouse and administration building. Everything we sell there we import from The Bahamas, so it facilitates exports.

"It's going to be close to $2m, and it's probably been six months, maybe a year, that it's delayed us by the time all is said and done. The property was closed and fenced in, and the permits have been obtained. We just need to start the construction. It will take us six months to finish the job once we get going."