Articles

WEST INDIAN SEA ISLAND COTTON
BY BASIL SPRINGER

This business plan assesses the feasibility of transforming the Caribbean 'West Indian Sea Island Cotton Growing' industry into a thriving and profitable private sector led 'West Indian Sea Island Cotton Integrated Textile' industry by expanding into value-added textile operations that will ultimately enable the manufacture of genuine certified W. I. Sea Island cotton finished goods within the Caribbean region - Prepared by CBET in cooperation with 4P Group, Inc. July 01, 2003.

The Caribbean Business Enterprise Initiative emerged in May 2001 to address the issue of developing innovative industries which could stimulate economic growth in the Caribbean. Although it arose through a consultancy at CDB it was thought that this venture would be better served if it were private sector led and hence the baton was passed from the public sector to the private sector and the CBET Inc began operations as a private sector entity in July 2001.

The promise that CBET was to be a catalyst which turned concepts into commercial realities interested a selection of Central Banks and commercial banks in the region and the Office of Private Sector Relations in St. Lucia in providing the initial financial sponsorship. The philosophy behind the initiative was to identify the many constraints to sustainable private sector development and remove them. If this were not done, we would struggle to sustain economic growth and certainly there will be no major impact on poverty reduction. CBET identified seven busines s drivers which, if successfully managed, would alleviate these constraints and hence the CBET driver concept is promoted as necessary and sufficient for business success which is our ultimate goal.

The last two and a half years have been a significant learning experience and I am extremely happy to report that the first project has now emerged. This project is a vertically integrated West Indian sea island cotton industry. Cotton has been grown in the Caribbean as a commodity since the seventeenth century, then king sugar took over. In the 1930s, in order to protect the special characteristics of cotton grown in the Caribbean islands, the West Indian Sea Island Cotton Association was formed. Since then the industry has experienced fluctuating fortunes and was in danger of commercial extinction. In recent times, it has been recognized that the little cotton that has been grown in the Caribbean has fetched a much higher price than other long staple cottons in the world because of its potentially longer staple length, greater tensile strength and lusher sheen.

Just about a year ago CBET was approached by the Ministry of Agriculture in Barbados to accept the challenge of applying the CBET model to a vertically integrated cotton industry with the objective of turning this potential industry into a commercial reality for the benefit of the people of the Caribbean. CBET set about this challenge by facilitating a strategic visioning retreat where a diversity of stakeholders met for one day to share their views as to the direction in which this industry should go. Armed with the report of this retreat CBET accepted an invitation by the Ministry to prepare a full business plan which was completed in July 2003. CBET offers a partnership business planning model where it takes part of the risk with the client and therefore jointly owns the business plan. When the business plan has been completed and has attracted investment then CBET is rewarded in cash and equity commensurate with the risk involved. This was the case with the cotton project.

After the business plan was completed, CBET was involved in promoting the project to the private sector which responded positively regarding its potential return on investment. The Cabinet of Barbados also approved the business plan, giving it its full blessing and committing to the creation of a user friendly enabling environment as a stimulus to private sector investment. CBET was then further invited by the Ministry of Agriculture to coordinate the implementation of the protect which led to the establishment of a company primarily based on private sector investment but with a some government equity interest as well.

The company is now up and running with enough seed capital to take it through to its first equity call later in the year. CBET will continue to coordinate the activities of the new company until a management team is put in place. It was most gratifying earlier this week to see the ginnery in operation at Spencers in Christ Church under the management of the new company. The next steps are to manage the company‚s development so that other strategic production partners in the Caribbean are invited to grow cotton for the company. The company strategy would then be to manage the lint to obtain maximum value added revenues to the region through the spinning, knitting, weaving, finished goods manufacturing and distribution process. CBET has been involved in the preparation of six other business plans, most of which have the potential to follow in the foot steps of the cotton industry and contribute to sustainable growth in the Caribbean.

(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. (CBET) - www.cbet-inc.org)