Notes to Consolidated Financial Statements - Barbados Investment ...

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Chairman’s Report The Year in Review The Barbados Investment and Development Corporation (BIDC) commenced its fiscal year April 1, 2008-March 31, 2009, endeavouring to transition from an agency with the traditional mandate of promoting exports, attracting investment, bolstering industrial growth and administering a range of technical assistance to over 1000 clients, to a restructured entity that would be more focused and dedicated to fewer, yet equally demanding responsibilities. The new mandate sought to accelerate the development of the indigenous manufacturing and related services sectors with special recognition given to the developmental needs of the craft and other small business sub-sectors. The Corporation’s strategic goals and objectives were set in September 2007 within the context of a stable economic environment. Over the past year however, the global economy has been engulfed by a deepening crisis in financial markets, by major corrections in the housing markets of a number of advanced economies and sharp surges in commodity prices. Faced with increasingly difficult conditions, the global economy slowed markedly. The Barbados economy was no exception. In the face of the weakening investment and business climate, Barbados registered an increase of only 0.7% in real output in 2008, compared to the 3.3% expansion registered in the previous two years and the 3.1% five-year average. According to the Central Bank of Barbados, this was the first year since 2002 that Barbados’ Gross Domestic Product (GDP) rose by less than 1%. Given the disruptions in the economies of Barbados’ major trading partners, activity in the traded sectors declined by 1%. The 1.2% expansion in the nontraded sectors was just enough to overshadow that decline. All this made for an exceptionally tenuous economic climate which impeded the Corporation’s efforts to realise some of its major objectives. Significant changes were also experienced within the Corporation itself both at the Executive and Governance levels. Former Chief Executive Officer Mr. Anthony Sobers, came to the end of his contract of service and a new Board was instituted following a re-assignment of ministerial portfolios within the Cabinet. At the same time Government’s annual subvention to the Corporation was reduced and this meant some initiatives had to be curtailed. That along with a shortfall in revenue from rents, seriously constrained efforts to advance the capital works programme and to complete major projects as scheduled. The Corporation had already seen a major setback in capital works as a result of the July 2008 fire at the Grazettes Industrial Estate, which resulted in the loss of 56,000 sq.ft. of viable factory space. In spite of the circumstances, the Corporation was able to continue its developmental work with companies in the manufacturing and services sectors through its Special Technical Assistance Programme. The programme continued to be an important vehicle in providing companies with the resources necessary to build export capacity and international competitiveness and proved crucial in the midst of the volatile economic conditions. Barbadian enterprises have used the programme to market their products, enhance operations, achieve international quality standards and certification (including the HACCP and ISO), improve product design and undertake professional training. During the year, a total of Bds$6.08 million was disbursed from the Fund to 141 beneficiaries. The major portion of funding was dedicated to marketing, equipment, systems and process upgrades. While the BIDC’s mandate did not include export promotion during the period under review, the Corporation nevertheless continued to develop and maintain some of the export expansion and market development initiatives executed previously. The Export Expansion project yielded positive results for much of the 2008/2009 year. As the global economic condition worsened however, much of the gains made were eroded during the latter months of the fiscal year. The Corporation’s efforts in export development were aimed largely at capacity building in terms of competitive enhancement of medium and large enterprises, and facilitation services for special technical 8 BARBADOS INVESTMENT AND DEVELOPMENT CORPORATION ANNUAL REPORT 2009
assistance aimed at overall export growth. This extended to both exporters and entities with export potential. As part of its industrial sector capacity building effort, the Corporation facilitated over 350 client visits during the year. Through specific programmes and initiatives the BIDC sought to enhance the quality and range of products offered by existing exporters and small businesses with the potential for export. Fifteen (15) companies were drafted into the Corporation’s ‘Export Ready’ programme during the year. Given the importance of new product development to exploiting market access opportunities, work continued during the year in developing five new areas of enterprise, most notably fruit wine production, botanicals, fish processing, fish leather craft, electronic games and online educational teaching materials. The Corporation also explored new ways to broaden the exposure of craft persons and increase their revenue earning potential in both the local consumer and tourist market segments. Several of the initiatives identified in the redevelopment plan for the Craft Sector were started during the year. Efforts to bolster the performance of small business producers through capacity building and institutional strengthening initiatives such as its Special Technical Assistance, Basic Industries and Incubator programmes were sustained. Future Prospects and Direction Acknowledging the current challenges, BIDC’s Management and Board have committed to constantly reviewing the Corporation’s performance to gauge its effectiveness in combating these difficulties. In an effort to minimize any negative impact, the Corporation has been undertaking further restructuring and upgrade that should allow for improved efficiency and responsiveness to client needs. revenues and profits and increased operational costs and debt-servicing problems. The Corporation is seeking to implement initiatives aimed at reducing costs to businesses to ensure they remain competitive; maintaining and where possible increasing export sales; identifying new product niches; maintaining local market share and sustaining employment levels. Many of the initiatives will be executed through the Corporation’s Special Technical Assistance Programme. Attention will also be given to making more funding available for marketing in both local and overseas markets as a means of safeguarding and capturing product niches. Efforts will in addition be concentrated on enhancing marketing efforts. More consideration is to be given to new product development and in support of this, work under the Corporation’s Innovation Programme will be stepped up. The manufacturing sector has weathered many difficult storms in the past. We have always emerged more determined and committed to the survival and prosperity of this critical area of economic activity. The future at this time may appear shrouded with difficulties and challenges previously unencountered, but the value and viability of manufacturing remain positive. The BIDC wants to see manufacturing emerge from these challenging times stronger and fitter than before. The Corporation is therefore committed to building the best framework of support and creating an environment in which Barbadian manufacturing companies can seize new opportunities. Much the same will be accorded services companies within our portfolio. We recognize that our future as a country lies in a mixed and balanced economy with manufacturing and services reinforcing each other. The BIDC is therefore committed to playing its part in the development of such a diversified economy. Having assessed the likely impact of the crisis on the local productive sector, the BIDC is devising schemes to mitigate the negative impact on employment, investment and growth rates, lower export sales, ………………………… A. DeVere Browne Chairman BARBADOS INVESTMENT AND DEVELOPMENT CORPORATION ANNUAL REPORT 2009 9
Page 1: BARBADOS INVESTMENT AND DEVELOPMENT
Page 4 and 5: Mission To be a dynamic Business De
Page 6 and 7: Board Of Directors Members of the B
Page 10 and 11: Operating Environment Global Indust
Page 12 and 13: FIGURE 1 DISTRIBUTION OF INVESTMENT
Page 14 and 15: 2. The development of a viable, hig
Page 16 and 17: partnership was developed with the
Page 18 and 19: assistance aimed at overall export
Page 20 and 21: Table lV DOMESTIC EXPORTS TO CARICO
Page 22 and 23: appraisals were completed. Emphasis
Page 24 and 25: 2008/09 IN PICTURES The BIDC’s bo
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Page 28 and 29: Auditors’ Report To the Board of
Page 30 and 31: Consolidated Statement of Changes i
Page 32 and 33: Consolidated Statement of Cash Flow
Page 34 and 35: Notes to Consolidated Financial Sta
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