Ansa McAL group to enter energy arena

THE ANSA McAL group of companies will soon become the latest local corporate conglomerate to join in the new wave of energy expansion in Trinidad and Tobago. Meantime, the conglomerate claims it is still reeling from the industrial unrest which crippled its brewery operations in TT last year. Group chairman and CEO, A Norman Sabga, made these disclosures as Ansa McAL presented its audited results for the last financial year at Tatil Building in Port-of-Spain on Thursday.

Those results showed Ansa McAL recording a before tax profit of $466.3 million, and its earnings per share increasing from $1.44 to $1.82 Overall, the group had a successful year “notwithstanding industrial action at the CDC/CGL and the effects of Hurricane Ivan.” Sabga indicated that the group is “very close” to making an investment in the energy sector, which it has been considering for some time. He said a site has already been selected at the Union Industrial Estate in La Brea for the construction of a proposed Urea Ammonium Nitrate plant, most of the technological works have been done and the group has negotiated a gas contract over with which it is happy. Sabga said the only remaining hurdle is capital costs, due to the price of steel on the international market, and Ansa McAL may need to borrow $150 to $200 million to address the issue.

“It’s a significant investment and I think the right direction for us to go into,” the Ansa McAL chairman stated. Ansa McAL director Gerry Brooks said, “This is the single largest project undertaken by the group” and it was determined to ensure that all the fundamentals are in place first. Sabga said industrial unrest in TT and the effects of Hurricane Ivan in the region last year had a negative effect on its brewery operations in TT, St Kitts and Grenada. He disclosed that the group spent $80 million last year to upgrade all three breweries in 2004 and approximately $160 million will be spent to upgrade operations at the Carib Brewery in Champs Fleurs in 2005. Brooks said to stay competitive in its brewery operations, the group will be focusing on the North and Central American markets.

Sabga indicated that the group’s acquisition of the AS Bryden Barbados group and the merger of Ansa Merchant Bank and the Tatil Group were two of its major success stories in 2004 which have “yielded opportunities and value beyond our expectations.” He also spoke of plans to enter the US clay tile market through a joint venture between Abel and Australian company Boral. Sabga said a plant to produce a total of 20 million clay tiles will be constructed in TT in July and become operational in January 2006. Outlining healthy financial returns in its insurance and automotive divisions, the latter due to Ansa McAL’s acquisition of Jaguar and Land Rover, Sabga said the group seemed well on the way to achieving its Vision 2006 objectives. On the new $9 minimum wage, Sabga said this could impact significantly on “people who offer us services,” but the group had no objection to it.