Sterling directors chopped
-Chin named chairman
Stabroek News
February 5, 2004
Sterling Products Limited has chopped three of its directors in what new Chairman Dr Leslie Chin describes as a cost cutting move.
The three, Paul Fredericks, Charles Quintin and Clarence F Hughes were axed the same day former chairman John Carpenter resigned. Carpenter resigned on January 16 as a result of his inability to agree with a policy direction of the company controlled by the Beharry Group. The Beharry's Secure International Trust Company Limited (SITCL) owns 8.8M, or 58% of Sterling Products' 15.2M shares.
"The main reason (for the resignations) was cost savings, starting at the top," Chin told Stabroek Business.
The Articles of Association require a minimum of three directors and a maximum of six.
Chin says when the Beharry Group took control of the firm, there were six directors but this was expanded to eight. This is now down to four with Anand and Suresh Beharry, Paul Cheong and Chin as the directors. Chin was elected chairman to replace Carpenter at a meeting last week.
Chin says where it is necessary this cost cutting exercise would extend to the workforce. He says the firm is piggybacking off the Beharry Group's services and expertise, including its distribution contacts.
Chin was a chairman of SPL until the Beharry Group took control and Carpenter was named in his place.
He says the company is now positioning to export soap powder and soaps as well as margarine and shortening having just invested in a US$1.5M margarine plant. In the local market the company sells about 2000 tons of margarine and 1000 tons of shortening, reflecting an estimated 85% and 30% of the market respectively. Only $3.8M worth of product was exported in 2002 but Chin says in 12 to 18 months, SPL aims to export 50% of its production.
The export market in the Caribbean was seen as the main reason behind the installation of the expensive new plant.
He says the firm will move to appoint an export manager to focus in this area and to scout out where the market opportunities are. As it stands, the company is operating at 20% of its capacity in detergents, 25% in soap, full capacity in ice cream (a new plant has been added) and 50% in margarine's capacity (a new plant is being added to double capacity).
Chin says that a major cost for the firm is in ingredients and not enough effort has been spent on ensuring that supplies are at the best prices.
"The company has a very good foundation for growth and for it to be successful," Chin says.
SPL's sales in 2002 were $1.96B, a $14M increase from the previous year. Net profit after tax was $49M, a decrease of 77M while dividends per share remained at $2.00.