BASSETERRE, St. Kitts – OVER the past two years many local businesses were adversely affected by the ongoing global economic crisis, and 2012 has brought no change as a number of them were forced to downsize, with the most recent being Electrofab St. Kitts Limited.
On January 9, the C.A. Paul Southwell Industrial Site-based manufacturing company had a fallout in its business transactions and, after suffering more than a 50-percent drop in sales last year, was forced to terminate the services of some 40 employees.
Speaking with SKNVibes, Managing Director Gary Mallalieu explained some of the factors that led to management’s decision of downsizing, which include the economic downturn and loss of the company’s major customer.
"Due to the international economic slowdown, we have lost orders. In February of last year we lost our major customer and that has put us in financial difficulty, and we have been in financial difficulty ever since," he explained.
He went on to say that despite those factors, the company had sought to keep its full strength of employees.
"Even though we lost our major customer, we did not lay off people at the time. We tried to keep them on although our revenue had dropped significantly. We have actually lost US$47 000 per week which calculates to over EC$8M per year in revenue," he said.
Mallalieu stated that the company was anticipating new orders from its current clients, but due to the economic crisis orders were instead lost and this forced the company to downsize.
He further stated that the decision to layoff was made by him and the company's Production Director, Trevor Greaux, and the persons laid off were based on a number of considerations including performance, attendance and the length of time they have been working with the company.
He also said that the employees were unaware of the layoffs as the company was not in operation during the Christmas season, during which time the Directors were trying to bring in new orders in an effort to increase revenue as well as balance the workload.
He explained: "We had written to the Labour Commissioner as we are required by law to do, explaining that we might have to lay off people if things did not turn around. But all during the Christmas break, we were trying to get new orders because we did not want to return to work and have to lay off employees...When we re-opened, we still did not receive an increase in orders and so many persons did not have any work to do."
Mallalieu elucidated that currently his company could only try to survive until the economy progresses and demands increase.
"All we can do is try to survive until the economy improves and the work returns. We have assurances from our customers that once they start getting orders, we will get orders. We make parts for capital equipment which is very significant.
Our customers sell capital equipment, and if they are seeing a reduction in demand for their equipment we also will see a reduction in orders for the parts that we build. Our plans and total efforts are devoted towards trying to survive until the economy picks up, hopefully, then the demand for capital equipment will rise and we will see demand rise for our parts," Mallalieu stated.
Electrofab is one of two manufacturing companies that have recently laid off employees. The other is Construction Technologies (CONTEC), which had laid off some 12 employees earlier this month; while TropiCall Call Center recently ceased operations, leaving a number of persons to join the breadline.
