By Dennise Williams, Staff Reporter
Prime Minister P.J. Patterson (centre) and Sameer Younis (right) inspect operations at West Indies Pulp and Paper while Roy Baker looks on. - File
IN the short term of three to six months, minority shareholders of West Indies Pulp and Paper (WIPP) can look forward to having their claim in the company liquidated. This statement comes from Joscelyn J. Jolly, general manager and board member of WIPP.
The company currently manufactures corrugated boxes for the manufacturing industry. Speaking to The Financial Gleaner, Mr. Jolly states, "The four million outstanding shares will be redeemed at $0.55 per share." Company share capital consists of 25.1 million ordinary shares. WIPP, suspended from trading on the Jamaica Stock Exchange (JSE) since May of 2001 was last sold at $0.55. At that time the 52-week high was $1.01 per share.
According to sources at the JSE, the company has been suspended and not actually de-listed to protect the minority shareholders. Said our source, "From our perspective the company hasn't been making timely financial reports and we want to protect the minority shareholders."
BATTERED AND BRUISED
WIPP's last published financial reports came out in November of 2001 reporting a loss per stock of $4.37. Our JSE source continues, "If the company is de-listed then they (the minority shareholders) have nothing to receive. The company really has had a chequered history on the JSE. They were never really embraced by the public. Their shares weren't actively traded. And they always made late reports. So as soon as they pay off their minority shareholders, we will de-list the firm."
However, Jolly explains that the company, which he states has been listed on the JSE since the early 1960s, has been battered and bruised by the liberalised economy. "We have scaled down from three companies to one. We were West Indies Pulp & Paper Limited (WIPPL) which manufactured tissue products, West Indies Paper Products Limited (WIPP) that currently manufactures corrugated boxes for the manufacturing sector and West Indies Containers Limited (WICL) which manufactured folding inner cartons for items such as laundry detergent. Right now we are down to one company WIPP." Jolly blamed the demise of WICL on imports. "For example, we had a contract to make laundry soap containers for Seprod and Colgate (Palmolive Co (Ja) Ltd.). But then Seprod sold out their laundry soap business to Colgate and Colgate then sent their laundry detergent manufacturing business to Trinidad and Tobago. So we lost both contracts." However, Jolly stated that in terms of WIPPL, the closure is just a temporary one. During its heyday, the company manufactured the tissue lines of Thrifty, Delicate, Orchid and Right Choice.
"In 2002 we temporarily closed our tissue manufacturing arm. Imported tissue from Japan and China had taken over the market." Jolly states that the Asian tissue was coming into Jamaica at "ridiculous prices that were below production costs." Jolly explained that the dumped tissue was cheaper than brands manufactured in Trinidad and Tobago and so Jamaican companies could not even begin to compete. But, there is a chance for a comeback. Jolly affirms, "As soon as the market settles down, we will be back. The amount of tissue coming in from Asia has been reduced. So we are looking to restructure the company to get back into the tissue market."
As part of the restructuring, the minority shareholders will be paid and the company will be de-listed from the JSE. "We had actually written to the JSE and asked for suspension. We cannot get the funds needed to upgrade the company through the stock market. It was felt by the directors that it would be easier to obtain financing through private placement. The major shareholders had a meeting recently and had decided to begin the legal procedures to make the offer to buy back shares."
VETTED
As at November, Jolly reveals that the legal documents to be presented to minority shareholders are being vetted by the company's lawyers. And according to the Jolly, despite the challenges of being a supplier to the beleaguered manufacturing sector, a ray of hope exists. Jolly proudly states that, "We have been in a position for several months to meet the demands of the manufacturing sector. Our main competitors are from imported boxes but we have been experiencing growth in volume of business and customer base." Jolly declined to give The Financial Gleaner any specific numbers regarding growth or profits.
