The Tribune

BY ANNELIA NIXON

TRIBUNE Business Reporter

anixon@tribunemedia.net

BOTTLED water and ice suppliers yesterday revealed rising fuel and operating costs, combined with repeated Bahamas Power & Light (BPL) outages, are making it increasingly difficult to capitalise on increased demand generated by the extra hot summer.

Jaimi Hanna, owner of Alka Boost Water Refill Store, said summer is traditionally the company’s busiest period and sales have increased since the heat began intensifying around June.

However, Ms Hanna added that the increase in demand has also placed additional pressure on her small operation, which relies on a single delivery truck to service customers in New Providence and the Family Islands.

“We’ve had to add an additional day to our route to keep up with the demand,” she said. “A lot of my business, believe it or not, we have a lot of Family Island customers. So trying to service both the Family Islands, and then trying to service our local customers here on New Providence, has been tight, but we’ve been making it happen.”

The company supplies Family Island customers with gallon-case orders, while its New Providence clients include a construction company and smaller shops. Ms Hanna said construction workers have been particularly important customers because of their exposure to the summer heat.

“They working outdoors, so definitely I service them year-round,” she said. “And, of course, since the heat has started, they’ve been drinking a lot more water.” 

But while demand has risen, Ms Hanna said BPL’s electricity woes have disrupted operations at a time when the business would normally be looking to maximise sales. “The outages most certainly affected my business in that there were days that we had to go without servicing customers at a busy time like this,” she said.

Ms Hanna added that outages had already damaged some of her machinery before the summer peak. The experience has been even more costly for Bahama Clear Drinking Water owner, Giovanna Rahming-Charles, who said the company’s delivery expenses have risen because of higher diesel prices.

“Delivery costs have gone up mainly because of the prices of fuel, diesel,” she said, estimating that delivery costs have increased by almost 60 percent.

Despite those higher costs, Ms Rahming-Charles said the company has resisted raising its prices because of what customers can afford. For a five-gallon bottle, customers who already have a bottle pay $4.50, she said.

“We haven’t increased our prices because the market could only bear so much, but all the costs associated have gone up: Electricity, water, diesel,” she added.

Bahama Clear has also enjoyed a seasonal demand increase and, with the many heat advisories that have been issued, Ms Rahming-Charles said the strongest growth has been in ice rather than bottled water.

“The highest sales is always as soon as kids get out of school until they go back in school,” she said. Unlike Alka Boost, Bahama Clear does not rely heavily on Family Island customers because of the expense involved in transporting water by mail boat.

“It’s just too costly to transport water on the mail boat,” Ms Rahming-Charles said. However, the biggest threat to her operation has been the reliability of the electricity supply.

“Murder,” she said, when asked about the impact of BPL outages on operations. “Ice can’t refreeze. I’ve lost a whole freezer full of ice. Once it melts down, you have to throw it away. You can’t refreeze it.”

The losses extend beyond inventory. Ms Rahming-Charles said repeated power disruptions and outages have damaged industrial equipment, including several motors.

“And then motors, because of the dirty electricity... BPL has been shocking the motors,” she said. “So I’ve lost like four or five motors, and each time I lose them, it costs me $800.”

The financial impact, Ms Rahming-Charles said, goes beyond the cost of replacing or repairing the motors because equipment failures also create downtime.

“And then you have down time in the business because it goes out and you have to wait to find a motor company to come in, take it out, rewind it, bring it back, then you can get up and running,” she said. “So they’re wreaking havoc on industrial equipment.”

Their comments come as New Providence has seen a summer of repeated power disruptions. Ms Rahming-Charles said the experience demonstrates why higher sales during hot weather do not necessarily translate into higher profits.

“So you don’t necessarily make money just because it’s hot, because if you have other factors going on, then they increase your cost of doing business,” she said.

For Ms Hanna, the summer has similarly brought a balancing act between meeting stronger demand and absorbing the additional costs and operational disruptions needed to fulfill it.