Quarry red herring

The National Quarries Company is not aware of the size of the market for its products and it does not know its place in it according to board chairman Ulric Warner.

“That is a big red herring. That needs urgent attention. I cannot see how you can run a business and you do not have a feel of the size of the market relative to production,” said Joint Select Committee (JSC) on State Enterprises chairman David Small.

Small’s comments were directed to officials of the National Quarries at a JSC meeting yesterday to inquire into the operations of the state-owned entity which the committee heard had been running at a loss for several years. While Warner acknowledged the need to know the market space, he said when the new board took office two years ago it found there was no relationship between production and marketing in the management of the affairs of the company. A marketing expert was brought in as part of the strategic plan to market and increase production based on market demands.

In the past, he said, production was not based on market requirements and the company was selling products at a lower cost than the cost of production.

“Right now they are producing based on market requirements,” he said.

When the board took office, he said, “We were mining from five mines which we did not need to do.”

Market is now driven by data, so when the company is being pressured with questions about what percentage in controls in the market, he said, “We are not going to try to fool ourselves and say we have ten percent or whatever.

“Until we have the data which we can assess and analyse, that is our position. We cannot say what is our market share.” Nevertheless, he said, the company’s operations were turning the corner and was looking at becoming a profitable entity.

On taking on the mandate to turn National Quarries around, Warner said it came “almost like a case study.”

“There was the issue of trust in the business where no one trusted the management. No one trusted the board. No one trusted any form of leadership.” Hard decisions had to be made from top to bottom including installing a professional management team.

“The board took a decision where substance abuse was an issue,” and he said, “We banned alcohol” which was a problem on the job.

“We said we would accept no gift. Nothing worth more than $100. Anything more goes back.”

The company’s operations had been closing down periodically and he said, they vowed not to close down the company before the end of the year. “The highest production level in ten years was last month,” he said.

“We are trying to change the culture to ensure that people are engaged in the success of this business.”

As a state enterprise, he said, one of the things required is an audit committee but there was no one in the company with financial training or experience. The board has since put in place a proper accounting system in place.

Last month, for the first time, the board held two annual general meetings to accept financial statements for 2010 and 2011.

At present, the company, he said, is working very hard to ensure that all financial statements are up to date.