Monday, June 24, 2019

Survey: Nearly 25% of Puerto Rico businesses still recovering from 2017 hurricanes

By on June 5, 2019

Numerous gas stations in Puerto Rico sustained significant structural damage from Hurricane María. September 2017 (CB photo)

Puerto Rico Manufacturing Extension to hold workshops on disaster preparedness, business continuity plans

SAN JUAN — Nearly 25% of Puerto Rico’s businesses are still trying to recover from hurricanes Irma and Maria in 2017, a survey by the Manufacturing Disaster Assitance Program (MDAP) of the Puerto Rico Manufacturing Extension (PRiMEX) shows.

For that reason, MDAP Director Ramón Vega said several workshops will be held around the island to help small and midsize businesses adopt resiliency and business continuity plans.

PRiMEX is a nonprofit affiliated with the National Institute of Standards and Technology / Manufacturing Extension Partnership Network of the U.S. Commerce Department.

Its first workshop will be held Friday, June 7, at the Hilton Ponce Golf & Casino Resort from 1:30 p.m. to 5 p.m. The second will take place June 14 at the Caguas mayor’s office. The activity will run from 8:30 a.m. to 12:30 p.m. Both events are free of charge.

PRiMex’s Francisco García told Caribbean Business that few businesses have an adequate business continuity plan to deal with a natural disaster nor have taken all of the needed precautions to face a prolonged blackout.

He noted that when assessing whether these businesses have a sufficient number of suppliers, staff, materials or equipment, they still fail to cover all possible gaps that can interrupt their operations.

“What I have seen is that businesses are aware and they have a power outage plan but when you ask if they have spare parts or if they have enough materials to operate around the clock, they do not know what to answer,” García said.

The presentations around the island will also include other topics such as cybersecurity and presentations titled “Importance and Reason to Create a Business Continuity Plan,” and “Emergency and Disaster Management.”

“If we strengthen companies, we protect jobs and promote permanence in our economy. It is imperative that companies have a good chain of suppliers, alternatives in energy sources, protect their information and business intelligence, and know government updates regarding emergency plans,” said Vega, who is also a management consultant at PRiMEX.

For his part, the commissioner of the government’s Emergency Management Bureau, Carlos Acevedo, said the government has also updated its emergency plans and urged businesses to do the same.

“It is important that each citizen prepare individually and that the companies work on their emergency plans, as well as the Continuity of Operations Plan to guarantee a more diligent response after an emergency,” he said.

For PRiMex’s survey, conducted from Oct. 15 to May 10, 529 companies responded, while 42 declined to answer and 29 had closed. Additional work is being carried out on the second phase of the project, which is underway.

Of the 529 companies, 463 are manufacturers, 61 are from the service sector and five are in agriculture.

“We can say that some manufacturing sectors related…such as the metals sector are experiencing an increase in their demand of goods, which is shown through some statistics collected with the survey: 409 (77.3%) of the 529 assessed companies indicated having positive or neutral financial conditions more than one year after hurricanes Irma & Maria. Another manufacturing sector that is also showing positive financial conditions is food companies,” according to the survey.

However the nearly 25% of companies still struggling to recover from the hurricanes, shows there are major challenges that need to be overcome such as the need for capital to refurbish structures.

Companies reporting financial losses spent an average of 112 days without electric power service, compared to an average of 88 days for those reporting profits or breaking even, 24-day difference. This finding reveals the importance of restructuring the infrastructure of Puerto Rico Electrical Power Authority (Prepa) together with a Disaster Recovery Plan that addresses the different sectors of the island.

Small companies lack the capital to invest in renewable energy sources and are dependent on Prepa for their daily operations, leaving them in a precarious position in the event of another disaster in the near future.

Only 145 companies of the companies assessed had some type of business continuity plan in place. Of these, 121 reported positive or the same financial condition as before the hurricanes.

These companies said that having a continuity plan helped their preparedness, which resulted in better financial results.

“If we can highlight only one important lesson, it will be that companies need to prepare, and having a business continuity plan will contribute strongly in their recovery after a natural disaster,” the report reads.