COMING OF AGE

Jamaica 2018 | ECONOMY | INTERVIEW

TBY talks to Paul B. Scott, Chairman & CEO of Musson, on rapidly expanding into Central America, retaining the country's human capital stock, and providing the right incentives for growth.

Paul B. Scott
BIOGRAPHY
Paul B. Scott is the Chairman, CEO, and principal shareholder of the Musson Group. He joined the group in 1994 and became CEO in 2004. In 2009 he was appointed chairman of the board. He is responsible for the strategic direction, performance, and overall operations of the group and all of its subsidiaries, including the Facey Group, PBS Group, Seprod, T. Geddes Grant Distributors Ltd., and General Accident Insurance. He led Musson’s expansion into IT and telecommunication distribution while continuously growing its investments in consumer goods, manufacturing, and insurance. Chairman of the Development Bank of Jamaica (DBJ), he is the Honorary Consul General for the Republic of Guatemala and President of the Private Sector Organization of Jamaica.

How has the transformation of the company progressed since you took over the reins in 2004?

Musson's core competency is distribution. It was initially a trading agency business, but over the years we developed into a distributor and manufacturer. We integrated backward into buying some of the brands that we distribute. Over the last 15 years we have moved from being primarily a food commodity distributor, specifically for rice and flour, to getting more dairy verticals. We are fairly large in the dairy business in Jamaica and Caribbean and have gotten involved in manufacturing biscuits. We have a bakery as well as a vegetable refinery, a new flour mill, and a cornmeal plant. On the base of our core distribution we have developed and built a distribution businesses in telecoms. We distribute most of the handsets across the Caribbean and Central America with carriers like Digicel among others in different markets. We have expanded quite heavily into Central America in both telecoms and an IT business called PBS, a USD200-million business with 1,600 employees that recently went public on the Jamaican Stock Exchange. Our telecoms business is in some 38 countries. We also recently launched in Colombia with Xerox.

Musson is one of the flagships of the Jamaican economy. What could be done to help Jamaican companies become more competitive?

The reality is that a few years of fiscal discipline cannot substitute for 40 years of poor economic management. There has to be stabilization, which is the basis and foundation for anything. There is a great deal of capital in the country; we focus almost entirely on FDI, and the truth of the matter is that there is a great deal of money stuck in pension funds and fund managers with life insurance and general insurance companies. My insurance company here has the floats of an insurance company's money, but we require a 250% minimum capital test (MCT), while in the US it is 100% and in Canada 150%. We have 250% because we had a financial crisis in the 1990s. People are forced to invest in government Jamaica paper, which suited the government because no one would have lent it money with a debt-to-GDP ratio of 150%. Such regulations helped that dynamic. Now the government is no longer crowding out the private sector. We need to analyze dialing back some of that. Banks are private-sector actors and have to be able to risk capital. To enhance innovation development and meritocracy in Jamaica, people need to have access to capital to be able to deliver good ideas and employ people.

Jamaica has experienced a long period of stagnation, but macro-economic indicators are positive. What is key to ensuring growth in the future?

We are a young country at 60 and spent these first six decades trying to figure out who we are, almost like prepubescent teenagers. Now we are coming of age and realizing what we are not. We cannot grow by having a simple transfer of wealth by taking from the rich and giving to the poor. We have to grow through private sector-led initiatives that will lead to job creation, investment, productivity, and growth. What we need to do is make this country attractive to people to aspire to stay and attract other people to come here. If we lose our human capital stock then we are losing our best asset. If we are able to keep our best people and increase the number of truly productive people, we will see GDP growth. Musson is building 250,000sqft of BPO space into which Amazon is moving, which will have 5,000 employees. BPO will absorb a large number of workers and create large revenues. This will boost consumption in the economy. We are a few hours away from the largest market in the world, we speak English, and have a wonderful country that people should only want to visit and live in all the more.