What are the facts about this foreign company that is causing protests in the streets? What are their interests in Guyana and the region?
If Ansa McAl is to Trinidad what Banks DIH is to Guyana - albeit many times bigger - then Anthony Sabga could be that country's Peter d'Aguiar.
Born in Syria on April 3, 1923 Sabga arrived in Trinidad when he was seven and at only 13 left school to take over the family business due to his father's illness.
In 1945 he formed the firm Standard Distributors a retail appliance business in Trinidad and Barbados. This became a huge success coming at the time of Trinidad's first oil rush. Then in the 1980s he took over McEnearney Alstons group of companies at a time when most businessmen were pulling their money out of the country. In 1992 The Ansa McAl group was formed and now comprises some 60 companies with interests in Trinidad and Tobago, Barbados, Guyana, St. Kitts and the USA.
Sabga is semi-retired and his son Norman now has day-to-day control of the company. One journalist suggested Sabga was equally revered and resented for his success and wealth while being considered an astute observer of his country's political machinations.
The various subsidiaries include such household names as Penta paint, Carib breweries in Grenada and St Kitts, various car dealerships, insurance, a merchant bank, clay tile factory - a joint venture with a US company, a glass factory in Jamaica, Trinidad Publishing that controls the Trinidad Guardian, a real estate company, Robinson Crusoe that owns the Pigeon Point resort in Tobago, and a business machines distributor. It has a dominant position in many sectors of the Trinidad economy except commercial banking and is now moving into the energy sector. The brewing operations of the group make up 26% of revenue.
Its results in the last few years have reflected that country's booming economy which has grown by an average of 3.5% in the last three years, and with high oil and gas prices could see higher growth rates in the short-term.
Ansa McAl is part of a group of Trinidadian companies with intra and extra-regional ambitions including Bermudez, SM Jaleel, Republic Bank, RBTT Financial, Neal & Massy, CL Financial and Trinidad Cement Ltd. It also understands there are bigger fish in the global pond and growth is essential.
Group Marketing Director David Inglefield says the consolidation of the world beer market has already penetrated the Caribbean with Diageo taking over Jamaica's Red Stripe. "The implication for us in the region is that if a business is to survive it must have a low cost per unit, brand strength and dominance in a local market and exceptional world class quality as well as synergies and economies of scale." But he also notes that a vulnerability facing many brewers in small economies is having too dominant a market share leading them to being easily targeted by a new entrant. Whereas a brewer with more than one brand as is the case in Trinidad with Ansa McAl's own operations holding a 50/50 balance between Carib and Stag in the market, this helps it become more flexible in fending off rivals. The company took over Stag after a price war, closed down the brewery and moved the workers over to its nearby operations. Inglefield says no workers were laid off.
He says Carib is sold in 30 countries with total production of just about 12 million cases a year with about one million being sent out of the Caribbean. It has a dominant position in Grenada and in St Kitts and is making some inroads in Barbados where Banks is bottled, but by another company. They also have some presence in North America in the New York and Florida areas.
Growth targets require acquisitions
Ansa McAl's mission statement is to be "the leading conglomerate in the region, continuously maximizing shareholder value by achieving exceptional performance, fostering long term confidence and respect, while generating sustained growth for all stakeholders."
Its share price was around TT$18.00 in December 1999; TT$11.00 in December 2000; TT$11.56 in 2001; TT$16.00 in 2002; TT$23.00 in 2003 and now stands at TT$40.75.
Results for 2003 showed a 21 per cent increase in after tax profit to TT$296 million (G$8.3B). Gross turnover was TT$2.88B, an improvement of 8 per cent over 2002. Earnings per share went to TT$1.44, up from TT$1.24 in 2002. The groups asset base grew by 13 per cent to TT$4.8 billion, up from TT$4.3B in 2002. Net asset value per share increased from TT$8.41 to TT$10.41
Its Vision 2006 "encapsulates the ANSA McAl Group of Companies' 2003 four-year plan of doubling the 2002 financial performance (Revenue - TT$2.5B, Profit before Tax - TT$323M and EPS - TT$1.24) by Financial Year 2006.
Vision 2006 boldly stated that the Group will achieve in the year 2006... revenue of TT$5B, profits of TT$650M and an EPS of TT$2.20. To achieve this level of performance requires the Group to grow revenue and profitability by 19.1% annually for the 4-year period." In 2003 they came up short on revenue growth target. For the half year 2004 the group's profit after tax was up by 16% to $129.1M.
Inglefield says certainly the group contemplates growth through mergers and acquisitions given that it is hard to grow organically. It is what the company calls 'Business Unusual.'
One such acquisition was last April's 90% take-over of A S Brydens & Sons (Barbados) Limited. Shareholders had been given until December 9, 2003 to accept its conditional offer.
McAl said within 30 days of receipt of acceptance and transfer documents, shareholders would receive cheques from First Caribbean International in settlement of the deal. The board of Brydens and Ansa McAl had in fact been in talks for several months about a merger.
The Chairman of the acquiring company, McEnearney Alstons (Barbados) Ltd has since announced that gross turnover for the half year to August 30 increased by 40% approximately TT$84 million over the corresponding period in 2003. Pre tax and after tax profits increased by 121% - TT$15.3 million and 131% - TT$10.6 million, respectively... the Directors have approved an interim dividend of TT 24 cents per share (up from TT 19 cents last year).
Trouble at brewery
But it has not been all blue Caribbean skies for the conglomerate. Most recently it locked out workers at Carib Glass Works (CGL) and Caribbean Development Company (CDC) for 58 days starting May 23.
Meanwhile the National Union of Government and Federated Workers (NUGFW) started a news sheet called the Scabga News. When asked about this Inglefield said they had begun negotiations in late 2003 over what was only a 5% difference in wage increases and some issues over non-cost issues. But he said they later met with absenteeism and suspected sabotage. On May 22 the workers decided to strike and to protect their assets the company closed the factory - a move that was since vindicated in the industrial court. He also notes that there were two unions vying to represent the employees and this added to the militancy of the NUGFW. He pointed to the brewery's November 30 record production figure of 1,050,000 cases of Carib Brewery products saying this could never have been achieved without the full co-operation of workers. He says most of Ansa McAl's hourly workers are unionised and the company respects the principle of collective bargaining but asks for unions to follow the labour laws.
Another contentious issue has been its subsidiary's handling of the Pigeon Point Resort in Tobago and relations with local fishermen.
The club placed certain restrictions on their access to their boats back in 1997 and this eventually led to the fatal shooting of a man at the hands of a club security guard.
A study by Dr Arthur Potts in February 2003 concluded that "many of the issues regarding the use of the Pigeon Point marine area, its owners, the fisheries and other sea-front stakeholders are still to be resolved."
Inglefield says Pigeon Point is an emotional issue for Trinidadians, it being an icon of the country, and it turned into a political football with an element of race. He says before the subsidiary began development the area was being totally destroyed including a nearby reef. Now the company was negotiating with the government for it to acquire the property by private treaty.
In 1996 there were also reports that Ansa McAl put pressure on the editorial staff of the Trinidad Guardian that comes under the Trinidad Publishing Company.
Then Trinidad Guardian managing director Alwin Chow told the newspaper's editors that the Ansa McAl group had been pressuring him that columnist Hulsie Bhaggan be removed over a column that she had written in mid-March criticizing Attorney General Ramesh Lawrence Maharaj and that all editorial copy be sent to Ansa McAl first in order to be vetted.
Inglefield says he was aware of the allegations but was not with Ansa McAl at the time. He says the newspaper is fiercely independent and well respected taking a strong position on crime. Closer to home Ansa McAl's ill-fated venture with packager SAPIL has also brought charges they shut it down. Inglefield responds by saying that they saw it as a good project but having bought new machinery to upgrade equipment a fire swept through the plant and it was unable to collect on the insurance.
The company concluded that it was not feasible to start over and sold its share to the government for US$1 "as a going concern. We did not shut down the plant."