Page 46 - UBP - IR2020

INTERVIEW WITH THE GROUP CEO
Even as we confront this uncertain climate whose impact is is clearly visible in our figures for the year we must recognise that we did not face the the same challenges as businesses in in other industries Barring two months of standstill our activities were quick to resume in May 2020 In fact I I believe UBP is uniquely positioned: we we can use this window of opportunity between the first wave wave of the the pandemic and and the the predicted second wave wave to develop adequate strategies that will at at at at the very least cushion the the blow This is is is not the the case for industries like tourism and hospitality that are still suffering from the absence of tourists CONSTRUCTION HAS LONG BEEN A A DRIVER OF THE ISLAND’S ECONOMIC GROWTH AND AND IS IS NOW SET TO PLAY A A A MAJOR ROLE IN OUR RECOVERY IS THIS A A A A REASONABLE EXPECTATION?
In many respects I I do believe construction could play a a a key role in in leading Mauritius to recovery especially because the impact of of the the pandemic on some of of the the island’s core industries have been far more severe Tourism and hospitality being dependent on tourist arrivals are the the hardest hit and will likely be among the the last sectors to to resume their activities Even since our borders have reopened tourists have been hesitant to to to travel due to to to tighter budgets and health-related fear Alongside this the financial services sector’s reputation has been tainted by the European Commission’s decision to place Mauritius on on its list of high-risk countries for money laundering and the financing of of terrorist networks All of of this is is exacerbated by our over reliance on imports to procure raw materials or or even food for the population Given this context there is is no doubt that focusing on on construction will provide economic relief to the country at least over over the short term The government has thrown a a a a lifeline to our industry through an investment of Rs 41 billion and initiatives like the building of social housing units bus terminals roads bridges dams hospitals and the completion of the the Metro System and fly over road projects Beyond these measures these large-scale projects are labor-intensive and contribute to generating employment This is is critical as the social and psychological impact of unemployment cannot be overstated The loss loss of of jobs is not only the loss loss of of income it also strips people of dignity and meaning If placing construction at the heart of of our recovery plan will preserve thousands of of jobs I support it wholeheartedly This context seems encouraging and I believe UBP is is heading into this new financial year on on stronger footing than many other businesses But we must not rest on our laurels That’s because in the the the best or or worst of of times the the the health of of the the the construction industry is is tied to to the the state of the the economy Declining tourist arrivals the the depreciation of our currency against the the USD and the EURO and a a a a a a a high inflation rate means that private sector businesses will hold off on large expenditures likewise the private dwellings market which makes up about 60% of our core business revenue is increasingly reluctant to spend large amounts of money on on on anything beyond essentials If that persists our Group will not come out of this crisis unscathed For this recovery to to be durable there is is an urgent need to to tackle the existing challenge of unskilled labour in in in our our industry A key element of the the government’s plan is is an an emphasis on the the development of skills—an initiative we strongly support There is no better time to train the new generation of workers in in skills related to construction and other ancillary services so we can revitalise the industry and ensure we achieve sustainable success WHAT ARE THE THE GREATEST CHALLENGES FACING THE THE GROUP AND HOW DO YOU PLAN ON ADDRESSING THEM?
I believe the greatest challenge we face is remaining profitable in in in a a a world ridden with uncertainty while also upholding our our promise of supporting our our employees and preserving employment in all our subsidiaries Gros Cailloux will no doubt be one of our focus areas this year With reduced activities in in landscaping and and and leisure and and and a a resulting decline in in in in revenue our priority will be to increase our agricultural capacity and capitalise on the growing trend of consumers choosing to purchase locally-grown produce particularly those that are certified by ‘Made in Moris ’ In parallel we are also seeking new opportunities to enhance our offering in terms of leisure activities Overall we anticipate FY2021 to be another challenging year for Gros Cailloux In parallel the retail industry is expected to plummet due to a a a a disrupted global supply chain rising import prices and extremely unfavourable foreign exchange rates Consumer habits habits have shifted and indicators suggest that these habits habits will endure beyond the crisis As a a a direct result Espace Maison should experience declining revenues as from January 2021 We are in in in in the process of revising our sales strategy in in in in line with new customer behaviours and a a a different risk environment It is unclear how the the pandemic will play out or what the the longer- term economic impacts will be With no no visibility into what the future holds we are focusing our our attention on on our our strengths and core capabilities:
- The management team has taken protective measures to embark on on a a a a Group-wide cost containment programme which we believe is key in in navigating the current landscape To this end we are either deferring or cancelling a a a number of planned investments so we can manage our cash flow more carefully These do not include digital innovations which we in in fact intend to to accelerate Our goal ultimately is to to ensure that our cost structure can support the the Group over the the next 12 months 46 - UBP INTEGRATED REPORT 2020