Thursday 20 September, 2018

Destruction and recovery: Business leaders remember Hurricane Gilbert

Five business leaders shared their recollection of the natural disaster that plunged the island into despair and grief but also exhibited the people’s indomitable resolve to overcome difficulties.

Five business leaders shared their recollection of the natural disaster that plunged the island into despair and grief but also exhibited the people’s indomitable resolve to overcome difficulties.

“I was up all night before Hurricane Gilbert hit Jamaica, and my father called me and said ‘Butch, I don’t like the look of this one. This hurricane system is too low.’ The old man knew what he was saying.”

Gordon ‘Butch’ Stewart, founder and chairman of Sandals Resorts International (SRI), still has vivid memories of Hurricane Gilbert, 30 years after the ferocious storm wreaked havoc in Jamaica.

The hurricane produced wind speeds averaging 75 miles per hour (mph), gusting to 127 mph, and 20 foot waves which battered the island depositing 32.4 inches of rain.

With many Jamaican houses covered by corrugated zinc roofing, Hurricane Gilbert left an estimated 500,000 people homeless. Forty- nine persons died and the island’s infrastructure - roads, airports, buildings, and the electricity network - sustained debilitating damage.

The cumulative damage to Jamaica was placed at US$700 million and the business life of the island was seriously impacted.

At the time of the storm, Sandals was a burgeoning resort chain with two hotels -Sandals Montego Bay and Sandals Royal Caribbean – and a further two under construction.

“We were making a mark and the brand was resonating with tourists,” Stewart told Loop News.

'Butch’ Stewart, founder and chairman of Sandals Resorts International.

He was among a number of business leaders who shared their recollection of the natural disaster that plunged the island into despair and grief but also exhibited the people’s indomitable resolve to overcome difficulties.

“When we flew over, it was clear that the damage was serious and would impact our operations. Sandals Royal Caribbean did not have a shingle on the roof,” Stewart said.

Gilbert wiped out the island’s agriculture industry, destroying crops, flattening trees, and killing livestock.

“What I witnessed was complete loss and devastation among our farmers, with every chicken house across the island flattened,” Jamaica Broilers Chairman Robert Levy shared.  

Jamaica Producers Group board member and former Managing Director, Marshall Hall also vividly recalled the destruction.

“I remember going to Eastern Banana Estates in St Thomas and standing on a little hill, and just seeing acres and acres of just bananas lying on the ground, it was debilitating. It was very painful,” he said.

The agriculture business would almost come to a grinding halt.

Robert Levy Chairman of  Jamaica Broilers.

Jamaica Broilers lost all its hatching eggs after its breeder operations in St Ann was completely destroyed. In fact, even JBG’s breeder operations in St Ann - where all the hatching eggs were produced - were destroyed. 

“So because there were no hatching eggs, we couldn’t produce any chickens for our consumers,” Levy said.

Gilbert completely destroyed the local banana industry, with JPG losing 3,000 acres of the fruit, according to Hall.

“Subsequent hurricanes combined with Gilbert eventually caused Jamaica to stop exporting bananas to the UK,” Hall noted.

Players in the manufacturing industry such as GraceKennedy were fortunately not as severely impacted by the hurricane and were able to help mobilise a team to help the government feed residents.

The day after Gilbert had passed, GraceKennedy chairman Carlton Alexander, along with his deputy and finance director Rafael Diaz were summoned to Jamaica House by the then Prime Minister Edward Seaga.  

“He spoke to Mr Alexander and asked, what we can do to ensure that the entire island is fed. The first thing was to find a warehouse and put as much stock into it to be distributed to the Jamaican people,” Diaz told Loop News.

“Fortunately we had enough supplies in the warehouse. The usual basic foods, things like the mackerel and the codfish and the rice and the flour, corned beef and all those products,” he recalled.

Rafael Diaz, Former GraceKennedy CEO.

Afterwards, it was business as usual for the company.

“Mr Alexander instructed us that not only should our regular customers be supplied, but all the small shops in the country parts. And then we were told that some of these shops don’t have any account with us and I said I don’t care, send it now, they can pay later,” Diaz said.

Hotelier Stewart was also intent on getting business running again.

“Why can’t we open at the end of October? I wasn’t trying to open the entire hotel but I knew we couldn’t afford to be out of business. I was aware that the business would not return immediately but if we were partially operational it would give us some revenue not to mention the staff would be engaged and motivated,” Stewart said.

Though the business leaders were intent on reopening businesses, there was no denying the losses incurred.

In terms of the value of the losses incurred as a result of Hurricane Gilbert, Jamaica Broilers chairman, Levy remembers clearly – it cost them as much as US$50 million.

“However, the biggest loss was the fact that we had no chicken to sell for some time.  But we sold truckloads of ice, which we manufacture for our daily operations at the Processing Plant,” Levy shared.

For his part, the former JP boss, Hall doesn’t remember the exact figure, stating “millions of dollars.”

Marshall Hall served as Managing Director for Jamaica Producers when Hurricane Gilbert struck.

“We had to borrow funds to restore the banana industry, and I’m speaking narrowly about JP. We came back but it was very, very difficult,” Hall said.

Levy went on to note that had it not been for the level of insurance the company had, Jamaica Broilers would not have survived.

“There were times when it was ‘touch and go’ for the business, especially during the time of negotiating with our insurance companies,” Levy said.

The insurance industry was woefully unprepared for the massive volumes of claims that were made, according to Evan Thwaites, who now leads IronRock Insurance as managing director.

Within the space of six weeks following the passage of Hurricane Gilbert, Globe Insurance received over 2,300 property claims, representing more than four years’ worth of the usual number of claims at the time, Thwaites said.

“Administrative systems were strained to the breaking point and the tracking of claim files (remember we weren’t computerized) became a major headache.  I remember clients, who came to check on their claim, spending ages in the office whilst we searched diligently for their file,” he told Loop News via email.

That insurance company was able to make its first claim settlement on September 15 (three days after Gilbert and one day after the office reopened).

Evan Thwaites now leads IronRock Insurance.

Most of the claims were settled by the end of March 1989, about six months after the event.

Gilbert and subsequent hurricanes sent a clear signal that some firms had to change the way they do business.

“It took a number of large hurricane losses, including Hugo (1989) and Andrew (1992), before our reinsurers insisted on the introduction of the Condition of Average to Home policies and the application of a special deductible of two per cent of the sum insured, for catastrophe losses,” Thwaites explained.

Hall said it was clear that Jamaica Producers could not continually be vulnerable to banana blow downs.

“So we had to go into other industries and that is how we eventually got into logistics and we expanded our manufacturer of fresh juice in England and now Holland, and now bananas account for less than five per cent of the revenues of the group,” Hall explained.

Sandals boss Stewart was able to reopen his hotels by the end of October that year.

“It was a Herculean effort. The next thing was to embark on a marketing exercise to bring in the trade. We took videos of the progress made after the devastation caused by the hurricane and showed them in the international market,” Stewart shared.

It took over one year for Jamaica Broilers to fully recover and return to full operation.

“Many days we were concerned as to whether we would have been able to make it, but God was good to us and we were able to rebuild better than before. So we praise the Lord.” Levy said.

Levy, however, pointed out: “A company cannot think only about protecting its assets, but the people who help to build the business and their families also need to be protected.”

According to Stewart, Gilbert taught Sandals as a group of companies what to do, and since then, “we have had a number of hurricanes affect our operations across the Caribbean but we have always been prepared and put into practice what we learnt.”

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