With the future of Barbados’ struggling sugar cane industry already very uncertain, insurance and financial services giant Sagicor Financial Corporation today announced that it is in the process of reviewing its participation in the island’s agri-business sector.
“I would say that before the end of the year we would determine what would happen from the Barbados Farms point of view on our involvement in agriculture,” said Group President and Chief Executive Officer Dodridge Miller, who reported that over the past three years alone Barbados Farms Limited loss more than $8 million.
Speaking during a news conference, Miller also acknowledged that the current trend was not positive. He also said Sagicor was “uncomfortable” with the direction in which the company was headed.
“It is not our core business and we are not agriculturalists. So we have to take a view as to how we can fix this, or if we should pass it on to someone else to do that,” he said, responding to questions from journalists following a report on the company’s performance.
Miller said he was willing to meet with stakeholders ahead of Sagicor’s decision. However, he acknowledged that should the company decide to give up the business, it could impact negatively on the local sugar industry.
“We are mindful of that, and we are not taking a decision just off-hand. We will have discussions with the rest of the industry, the agriculture ministry and Government, before we actually put a decision on it, but we are aware that it could have an impact and we are corporate responsible citizens.”
Back in 2008, the company had projected a loss of about US$2 million for the first five years until the industry could be restructured.
However, the top official acknowledged that the world had changed and economies had plunged.
“Really we can’t rely on land sales to recover losses in agriculture. So we have been waiting and looking for the restructuring plan that Government had indicated would happen and we are still to get clarity on that project,” said Miller.
“We cannot continue to make US$2 million in losses in agriculture [annually]. We can’t continue to do that to our shareholders and so we have to take the strategic position to exist agriculture or whether we try and restructure,” he said.
Due to shrinking yields and rising costs, Miller said the future of sugar in Barbados remained uncertain. He said the company was therefore faced with two options – get out of agriculture, or to try to see if there was some way of advancing the sale of land to make up the difference.
“The latter is proving very difficult because of our [the country’s economic] conditions at the moment,” said Miller.
He stated that while he had been hearing for at least the past 15 years about a plan for the agriculture industry, “from Sagicor’s perspective on Barbados Farms, we are not clear and we are seeking that clarity”.
“It is a cause of concern for us at Barbados Farms and Sagicor . . . and we will be making some decisions as to what needs to happen to protect our shareholders,” he stressed.