Church lashed on Olint

Church lashed on Olint
published: Thursday | July 17, 2008

Mark Dawes, Religion Editor

Jamaica Gleaner – Kingston,Jamaica

Christians who placed their funds in Olint Corporation Ltd and other foreign currency trading-related investment schemes were naïve and foolish, says Dr Henley Morgan, management consultant and a congregational leader at the Trench Town-based Praise City International church.

Morgan told The Gleaner yesterday that furthermore, many of the operators of such schemes did not possess the competencies to effectively engage in foreign-exchange trading.

“It is early days yet, but I think we (the Christian community) have taken a black eye on this one,” he said.

General comment

Morgan was commenting on the general state of foreign currency trading schemes in Jamaica and reports that the David Smith-led Olint had its offices in The Turks and Caicos Islands raided earlier this week.

“On the advent of foreign-exchange trading, the key players were from the Christian community. They foisted themselves on a ‘captive’ audience of ‘believers’,” he argued. “Many of the Christians previously engaged in front-line evangelism and ministry disappeared from the battlefield.”

Time consuming

Morgan said foreign-exchange trading was very time- consuming and many pastors actually formed clubs, giving them another business to run, other than their churches.

He said 70-80 per cent of investors in foreign-currency-trading investment clubs comprise church folk.

Morgan said he believed most of those who launched foreign-currency investment schemes, of which there are said to be about 34, did so in the utmost good faith.

“I do not have any evidence that these people had wrong motives. I think it was more naivety and unsophistication inmanagement,” he said. “You are talking about, in most cases, people who have never managed large sums of money, all of a sudden had backroom operations and you are dealing with a very complex thing, which they don’t understand. I genuinely believe that possibly even David may have thought that at the end, they would have somehow right-sized; somehow they would have been able to stay ahead of the curve and maybe come back and pay everybody out and then recover.”

He added: “When you are getting 10 per cent, you don’t get out while the going is good. It is just like any other addiction.”

Morgan said he had come close to being convinced by people that foreign-exchange trading was something God had sent and had opened up for the Christian community to build His kingdom.

“I recall there were messages being preached all over. People were just so convinced. And now I am learning that some of those who were preaching the best such sermons were trying to convince themselves,” he said.

mark.dawes@gleanerjm.com

Paint manufacturers look to exports, diversification to stay viable

Paint manufacturers look to exports, diversification to stay viable
By Julian Richardson Business Observer reporter richardsonj@jamaicaobserver.com
Wednesday, August 20, 2008

Faced with spiralling raw material costs in the context of a stagnant local market that is flooded with cheaper imports, Jamaican paint manufacturers have turned their eyes overseas and diversifying their product line to maintain their viability.

“We have been working very hard to increase our exports,” says EdgeChem’s managing director Doreen Frankson. “The countries that we export to have been doing better than the Jamaican economy, so what you find is that the export markets are growing but our local markets are shrinking.”
Michelle Welch, sales supervisor at Diamond Paints, displays some of the company’s paint products at its operating facility on Waltham Park Road in Kingston. Diamond Paints is currently conducting a multimillion dollar expansion project to double its capacity. (Photos: Naphtali Junior)

EdgeChem’s overseas distribution network is comprised of exporting to Caribbean countries such as Barbados, Antigua, Trinidad, Belize, St Lucia and Dominica.

“We are always doing research and development, but our plans now are to expand our export markets because we have to get our units back up,” notes Frankson.

Diamond Paints, which operates from a 90,000 square-feet manufacturing facility on Waltham Park Road, has invested in a $70-million expansion project aimed at creating the critical mass needed to satisfactorily supply the overseas segment of their target market. The project, to be completed by the end of the year, will double Diamond’s annual production capacity which now stands at 650,000 gallons of paint per year. Diamond’s expansion plans entails a lot of product diversification into different commodities of building finishes. According to Seaton, the company recently brought on stream a “phenomenol” wall paste product, which they have already began exporting to Barbados.

“We are exporting this product to Barbados and are sending our technicians there to train them in terms of its usage and application,” disclosed Neil Seaton, principal and chairman of Diamond Paints.

Seaton also revealed that the company has been commissioned by furniture giant Courts Plc to supply painting to all their stores in the English- speaking Caribbean. “The fact that Courts have chosen us speaks to the quality of the product that we are making,” said Seaton.

Even while local manufacturers are looking overseas they have to confront the growing challenge of cheaper imports entering in an already shrunken market.

“I think for a country that has a foreign exchange problem, we should not be importing paints because we have so many good local manufacturers,” argued Frankson. “Every other country in the region protects their manufacturing sector, but Jamaica doesn’t.”
McDonald concurred with Frankson.

“We are basically on our own because we don’t get any protection; this is why we have so many brands in Jamaica,” he added.

One of the major importers of foreign paint, according to Seaton, are the foreign investors. This stems from the fact that a lot of foreign companies are given a duty-free tax holiday by the government, which includes importing certain items, such as paints. As a result, paints are imported at a discounted price, making it cheaper than the local brands.

“We are concerned that a lot of these projects that are coming into Jamaica are bringing in their own finished products like paint and construction finishes which are already available in Jamaica,” said Seaton. “I question the wisdom of having them bringing their own product.”

Berger Paints have also intensified its efforts to widen its product range. The paint manufacturer, which controls close to 70 per cent of the local market, is attempting to reverse the fortunes of its eroding bottom line with this diversification compounded with more prudent cost management.

“We are expanding in certain areas; we are looking at various niches,” said Warren McDonald managing director of Berger Paints Limited. “We are looking into areas where perhaps we don’t have that market share where we can grow at bigger ratios.”

One of the areas that Berger is trying to penetrate is that of vehicle finishing.

“Traditionally we are late entrants in that market, but we represent (American chemical company) Dupont in Jamaica and we are growing at over 30 per cent for the year over last year,” revealed McDonald.

According to Berger’s second quarter ended June 30,2008 financial report, for the six-month period the company saw its revenue grow by 16 per cent over the corresponding period in 2007. During the period under review, according to the report, the company’s operations were severely impacted by the increases in oil prices, derivatives and other raw material costs which were not fully passed on to its customers. The company thus posted a $2 million loss for quarter.

The challenging environment for the sector starts with the out of control oil prices that leapt to an all-time high of US$147 per barrel just last month. This has had a corresponding ill effect on the cost of oil-derivative inputs in the paint industry, thus resulting in increased cost of production which is heavily absorbed by manufacturers. For instance, the cost of major ingredients of paint such as titanium dioxide and resin have risen by 15 per cent year to date on the world market, while mineral spirits have skyrocketed by 50 per cent.

“The major challenge in the industry is that the raw materials for the industry is a by-product of the oil industry, so everytime the oil goes up the raw materials go up,” says Frankson.

Frankson, the immediate past president of the Jamaica Manufacturers Association, says that this has resulted in the erosion of margins and volumes at her company, which does not factor most of the cost increases in its selling price.

“We have absorbed some and we have passed on some,” she told the Business Observer. “The full brunt of it has not been passed on to the consumer, so our bottom line has been getting weaker and weaker.”

Checks with major retailers revealed that the per gallon selling price of the most popular oil-based low sheen emulsion paint has increased from $1,483 to $1,691 plus tax since the beginning of the year, a 14 per cent increase.

According to McDonald, exacerbating the pricing challenge is the fact that suppliers no longer sell raw materials at the price of initial purchase, but at the price on delivery, making companies ill prepared on how to manage cost increases.

“Big conglemerates have stopped giving out forward quotes,” said McDonald. “They wont give you a price until delivery so its harder to plan because on each delivery you have an adjustment.”

In addition to the pricing woes faced by manufacturers on the world market, a sluggish local economy have seen paint sales slow down significantly.

“There have been a slow down here since last November and it hasn’t come back up since,” noted Frankson.

Neil Seaton, principal and chairman of Diamond Paints, points to the fact that paint sales have been adversely affected by the fall-out in numerous alternative investment schemes, which reportedly had billions of dollars in funds under management. This, Seaton believes, has resulted in a major erosion of disposable income normally spent on paint.

“We are seeing some negative signs in the market in view of the fact that the whole financial atmosphere is in so much limbo mainly from the fallout of Cash Plus and Olint and other negatives in the financial sector,” highlighted Seaton. “We have seen marked slowdown in the type of market activity that we are used to.”

Berger’s McDonald agrees, adding that there has been a noticeable slowdown in construction activity, a major complement to the success of the paint industry. He also pointed to the negative effect of the slowdown in the US economy on remittance outflows towards Jamaica, as another hinderance to how much local consumers can spend on paint.

“Carib Cement is down volume wise, so I dont think construction is expanding; Also, remittances from the US is certainly not increasing because of what is going on up there,” said McDonald.

“Disposable income is definitely down and a lot of this money was used to fix up homes and so on.

“All these things are having an effect on the paint market which we don’t feel is growing right now,” he noted.

Presidential challenge and more partying

Presidential challenge and more partying
Jamaica Observer – Kingston,Jamaica
published: Friday | July 18, 2008

Chester Francis-Jackson, Contributor

Left: Peter Phillips, aspirant for the presidency of the People’s National Party. Right: Martin

My dears, first there was the collapse of the Ricky Azan-led investment scheme, and this was followed by the Carlos Hill Cash Plus debacle – the fallout from which is still to be fully understood and appreciated.

And on the heels of all of that, now the news of the impending demise of the much-vaunted David Smith Olint investment scheme.

Dear hearts, believe you me when this here scribe says it is high time to pray, as the bottom has just fallen out of the well.

Hand-wringing

The silence all around is the fretting, hand-wringing and second-guessing that have now become the norm for many a distraught client. Many are from the upper echelons of the society, who are now faced with a serious financial shortfall, but still have to contend with bills and the daily cost of living on dwindling resources that were once being augmented by these now dying ‘investment schemes’.

Dears, trust moi, not only are we living in interesting times, we can all expect a decline overall, as the meltdown that is to come will affect all sectors.

The rush of wind y’all just heard was the lifeblood of the economy for the last four or so years being sucked out, with a vengeance.

Swearing like mad

Then, my dears, news of Dr Peter Phillips’ challenge to People’s National Party president, Portia Simpson Miller, has caused some of the leaders within that organisation to be swearing like mad, as they are all very upset with the challenge coming at this time.

Seems like while they say the challenge was inevitable, the timing was not, and they are decidedly not at all amused.

Word is that the party elders are still trying to forestall the challenge before it rips the party asunder, as they think now is definitely not the right season for any such challenge.

While Simpson Miller might not be the darling of the middle and upper classes, she is most certainly the darling of the masses, and it is they who vote in numbers large enough to affect the results of elections. More anon, as these are more than interesting times!

Anyway, my daahlings, the fab ones party on. And speaking of the fab things and beautiful people, the rage in fab circles is all about the Heart and Sole boutique in Manor Park.

Owned and operated by the tres elegant Mary Abrahams, the place is a treasure trove for the fab and fashion-conscious, offering the latest in designer clothing, shoes, accessories and all things fashionable for the world’s leading designers and catwalks.

Dears, it is definitely the find for the summer, as it is most definitely one of the more elegant boutiques in the city, offering up some even more elegant items.

Fraser is 60

Peter Fraser, man of impeccable grace and charm – File

And then, what do you do when you are the island’s leading hotelier, celebrated the world over as a bon vivant, man of style and impeccable grace and charm, on the occasion of your 60th birthday?

When you are Peter Fraser, you opt for a very different mode of celebration to mark the momentous milestone. And so it was that last weekend saw the affable Fraser and a critically hand-picked shortlisted coterie of friends all heading for one of the island’s more charming boutique hotels.

It was the very snazzy Mar Blue, located on the very fashionable and oh so very ‘in’ south coast neighbourhood of Treasure Beach!

Luvs, we are talking four days and nights of fabulous activities, the kind that Fraser is accustomed to, while others dare to dream but are never bold enough to undertake.

Sweet things, we are talking a takeover here, punctuated by lazy mornings and afternoons; late evenings and long nights, with an outing to the famed YS Falls; guesting at champagne reception at the oh-so-fabulous Driftwood Villa; lunch near Whitehouse; and the pièce de résistance, an absolutely scrumptuous dinner on Sunday by the hotel’s celebrated chef, Axel, to crown the celebrations.

My daahlings, it was all that and then some, as among those joining the celebrated hotelier and bon vivant for the celebrations included his sibling Paul Fraser; his friend of long-standing Margaret Kadian Justensen, who jetted in from Washington; Ruby Martin; Claude Fletcher; the venerable Gloria Moodie, who jetted in from Canada for the occasion; hotelier Michael Bryne; Don Topping and his wife Brenda Belding Topping, she flying in from Cayman; Oral Webster, who flew in from Bermuda; Charles and Luciana Muneri, in from New York, her birthday being on Friday; Ernesto Ochoa Gonzales, in from Miami; Shirley Stanglmayr del Fabio; Dr David Lambert Brown; Judith Palomino; and mega-talented singer and performer Roger Mendez, plus a number of others.

Other birthdays

And speaking of birthdays, the fab Heather Blanco took the honours on Bastille Day, as the lovely lass shares the date with the French National Day.

Also celebrating this season is Capt Ewan Oliver, who actually celebrated on July 5.

Hotelier and hospitality/tourism consultant James Samuels celebrated his special day on Tuesday, the 15th. And on Sunday, it was all about style denizen Carmen Brown, as the glamour maven celebrated her special day.

Champagne toasts all around, along with beluga treats.

David Smith fails to show for ‘Full Hundred’ on Olint

David Smith fails to show for ‘Full Hundred’ on Olint

Jamaica Observer – Kingston,Jamaica
WIGNALL’S WORLD
Mark Wignall

Sunday, August 03, 2008

Two Thursdays ago when embattled head of Olint TCI, David Smith, promised to give me the ‘Full Hundred’ on Olint, I allowed my most optimistic side to cling to the tenuous hope that he would indeed do so. ‘Full Hundred’ is, of course, street slang for the obvious: giving the full story with no fanciful promises and skilfully crafted embellishments.

In that telephone conversation we had (he called three times in 15 minutes) he sounded like a man ready to unload, either because the times demanded it or because the goal posts could not be moved any further away from the field of play.

Wanting to give the highly anxious and super-stressed-out Olint investors something more than a nebulous nine months for the gestation and rebirth of Olint, I told him then that I was in the position of so many people – forced to speculate because of a lack of information. I told him that I could not write a full page of ‘nothings’.
SMITH. asked investors to give him nine months

My objective then was to have a face-to-face with him. “I will get back to you, Mark, and give you the ‘full hundred’,” he said.
“Should I tell the readers that?” I asked. He agreed, but went further. “The paper is going to sell off.” Even though the times called for tears, I exploded in laughter, not so much to mock those who have begun to crowd private hospitals due to increased and unrelenting stress, but to encourage him to live up to his promise.

A short while later, I realised that a face-to-face in Turks and Caicos was not in the making so I dispatched to him, through a third party, 16 questions, when what I really wanted to ask was 100 more. That Smith has failed to live up to his promises to me will not, of course, endear him to those who even now are allowing a deeper and more painful reality to sink in.

At this time, to those people, Smith is on their ‘most wanted’ list.
Many of those who worked for him have departed, so direct contact with him was the best way to gather information on Olint. The fact that he made the link with me, issued a promise, then failed to show, has left me in a position to naturally conclude that Smith has either taken professional advice to shut his damn mouth or, at the very time of our telephone conversation, the ‘full hundred’ promised was just his way of knee-jerking himself to the next day.

In his last letter to club members he asked them to give him nine months. To do what? Recover their money? Recover a part of the funds? Or, as many are saying, he was giving himself nine months’ breathing space?

The fact is, telling investors to give him nine months begs the obvious questions. What will Olint/Smith be able to do for investors nine months down the road that he is not able to do for them now? How likely is it that he will ever be allowed to trade again?

In his interview with ace journalist Cliff Hughes, mention was made of an e-mail he had reportedly sent to his wife admitting that he/Olint was bankrupt, busted, gone kaput. I criticised that at the time, even as one sensed that Smith was wavering between travelling the formal, legal route and cleansing his soul by a frank and full disclosure of the financial status of Olint.

In that interview with Hughes, he said, “I pray to God that the funds will be released by Friday.” Which funds, Mr Smith? Which Friday, Mr David Smith?

The Olint fall from grace, to promises, to pain

In November 2007 when the Olint Foundation was launched, Jared Martinez, head of Market Traders Institute (MTI) and the man who is known as FXChief, described the founders of Olint as “ordinary people doing extraordinary things”.

Something has since soured in that relationship between Olint and MTI. An MTI ad in the July 27 edition of the Sunday Gleaner begins:

“There is nothing crueler than a violation of one’s personal trust or an abuse of someone’s loyalty. Many Jamaicans have joined various FOREX Investment Clubs to help them take advantage of the money than can be made trading currencies. Unfortunately, it has been many Jamaicans that have been taken advantage of.

“Given the recent rash of FOREX Trading schemes, scams and scandals, MTI is working to help educate the people of Jamaica on the FOREX while Jamaicans take greater steps to educate themselves and avoid becoming victims of any more scams. The FOREX itself is not a scam or a scheme. Without a true education about the FOREX, people can be taken advantage of by some questionable FOREX clubs. At Market Traders Institute, we are not in the business of taking people’s money to trade on FOREX. We are in the business of educating people to trade on the FOREX for themselves.

“Market Traders Institute is not a club. We are an institution and we are committed to helping the citizens of Jamaica take control of, and improve their personal finances. MTI is trying to correct the misperceptions that many Jamaicans have about the FOREX. While there is tremendous opportunity for profit trading currencies, without a proper education the potential for losses is just as great.”

MTI has therefore drawn some distance between itself and Olint, and probably should be seen as indicative of something radically wrong with Olint.

Was the meeting with big players a sham?

On June 23, a meeting was held with about 35 of the big investors in Olint to outline to them the true position. It must be remembered that some Olint investors were Cabinet ministers in the last PNP Government and current JLP Cabinet members. Some came on board the ‘Olint train’ in the early days and did well financially.

Then again, if we assume that not all politicians are blessed with knowledge of complex financial matters, investors also included bankers, CEOs of large companies, proprietors of various entities and many other people who simply wanted ’something more’.

In that meeting an April 29 statement indicated that US$735 million was listed as a balance with Oanda, a company that styles itself as ‘A leading FOREX dealer and FX Trade platform.’ Was the document authentic?

“Based on what has happened now,” said one big player to me, “I believe it was just that, a document projected on a screen. A document which, as far as I am concerned, means nothing if David Smith does not come clean.”

The reasoning behind the ‘big’ meeting was obvious. If the big players could be convinced that Olint had some semblance of financial ‘possibilities’, then word would filter down to lesser investors with a US$20,000 or $30,000 in Olint.

One letter writer has posed the following as the ‘big’ question for David Smith: “If all of the accounts which are frozen were ‘unfrozen’ today, what percentage of investors’ balances to May 31, 2008 would be realised?”

There are some who believe that at the time in January 2008 when Olint was sponsoring the Air Jamaica Jazz and Blues Festival, Smith was in Jamaica to pay out US$100 million because of a run on Olint. If that is so, was the festival funded from accumulated profits in Olint or were funds removed from any trading platform to pump into Jazz?

In addition, was there a stage, in January of 2008, when ‘interest’ was being met out of new entrants’ investments?

“I don’t care about that now,” said one extremely distraught woman to me. She was trembling as we spoke. “I am a sick person, with no husband and no other source of income. As a retired teacher I invested US$50,000 in Olint in 2005. It was my all. To be true, I made money for the bills and the medical expenses, so on that account I praise Smith. My problem is that my illness still remains while I have to be living off friends and family.”

She began to cry. “Mark, I am in such a precarious position now that if you even have J$1,000 to offer me now I will take it.”
David Smith, my offer still stands, and I am certain you must have your reasons for promising me a fuller interview, like you promised investors changing payout dates. To me, the nine months’ promise is just that. Another attempt to buy time.
Time for what?

I waited and waited, Mr Smith. I even decided to use the space allotted me by the Observer to carry only one piece this Sunday. A piece on Olint. As it is, Mr Smith, you have chosen not to call me, not to live up to your promise. But then again, that seems to your new modus operandi. If you were unable to talk because of legal implications you should have told me so.

In the past, those employed to you would be quick off the bat to give me any information I requested, and even some I did not. Now you have chosen to give another promise in the hope of what?

To be further pilloried?

I am still open to hearing from you, David. Make the link, as the matter is urgent. Just ask the head of any hospital in Jamaica. Every sensible investor has a tiny space in the back of his or her mind that loss is possible and likely. In that scenario, the investor deserves nothing less than a full disclosure. Is that too much to ask, David? Look into yourself, then stare at the man in the mirror.
observemark@gmail.com