10 Things To Expect In The COVID Economy

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THE STAR BUSINESSWEEK MARCH 28, 2020

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IN THIS EDITION OF

SBW THE STAR BUSINESSWEEK

The Rise of Female STEMpreneurs The number of women entrepreneurs in the traditionally male-dominated fields of science, technology, engineering and mathematics is on the rise throughout Latin America and the Caribbean, according to the InterAmerican Development Bank (IDB).

10 THINGS TO EXPECT IN THE COVID ECONOMY

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Women are being drawn to the STEM fields to help meet the Caribbean’s SDGs, according to IDB Lab. (Photo courtesy Microsoft)

The current Coronavirus outbreak has generated a wealth of doomsday headlines and, as the world hovers at the precipice of a global recession, Caribbean economies face a dark future. There are bright spots, however, as tough times foster a spirit of regional cooperation, innovation and resilience. Here, STAR Businessweek presents a balanced view of what likely lies ahead for small island nations and how the region can expect to be transformed by the present crisis.

Affordable Housing in Dominica The devastation of successive natural disasters over the past decade has tested the resolve of Dominicans. Page 5

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT Continued on page 4 The World Health Organization has called for a national strategies to take a whole-ofgovernment and whole-of-society approach to containing the Coronavirus outbreak. (Photo courtesy the World Health Organization)

Alongside Bellevue Chopin, the Cotton Hill Housing Project has also seen great progress with certificates for 24 homes officially handed over to residents in December 2019. (Photo courtesy www.Housingdominica.com)

We’ve always said that love is all you need and now, more than ever, love is all that matters.

Love is All You Need


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GOVERNMENT OF SAINT LUCIA Ministry of Tourism, Information and Broadcasting,Culture and Creative Industries

CHARTING A NEW COURSE FOR FERRIES BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

3rd Floor, Sir Stanislaus James Bldg. The Waterfront, Castries Saint Lucia, West Indies Tel. No. (758) 468-4629/4603 Fax: (758) 451-7414

March 18, 2020

DEAR INDUSTRY PARTNER, Our industry at this present time confronts a most trying period, perhaps the most devastating in its recent history. Together with the rest of the world, the Government of Saint Lucia continues to navigate the dynamics presented by COVID-19 and is committed to sharing in the global efforts to combat this virus. With rapid changes taking place globally, the impact on the travel industry is devastating. Around the world and in Saint Lucia, necessary precautions are being taken, to protect the health and safety of all citizens, visitors and residents. In proactively outlining response actions for the challenging period ahead, the Ministry of Tourism and the Saint Lucia Tourism Authority (SLTA), convened with the Board of Directors of the Saint Lucia Hospitality and Tourism Association (SLHTA) on Friday March 13, 2020 to gather first hand information on the overall status of the tourism industry over the next ninety days. We have also had similar dialogue with travel trade partners, airlines and media. As we endure this difficult time, lets us find inspiration from the multiple examples in history, which demonstrates to us, every time tourism has been resilient. Our collective will and shared resolve will overcome this. Please note that we remain focused at this time to ensure that Saint Lucia is positioned to regain its market share when the travel landscape rebounds. In an effort to contain the disease, the following measures have been taken: • • • •

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Activation of the National Health security Committee to develop the national response plan. Assessment of the capacities at the ports and health facilities and other relevant facilities to determine the capacity to respond and identify resource gaps. Training and procurement of resources. Imposed travel restrictions for Mainland China, Hong Kong, the Republic of Korea, Italy, Singapore, Spain, Iran, UK, Germany, and Mainland France and by Extension Martinique, whether in- transit or originating. Suspension of all yachting and pleasure craft calls into Saint Lucia until further notice. The Ministry of Health through the Bureau of Health Education commenced a public awareness and education campaign.

I urge you to observe all the necessary precautions outlined by the Health Authorities to stay protected from the COVID-19 epidemic and to work in tandem with the Ministry of Health, Ministry of Tourism and the Saint Lucia Tourism Authority, as we all remain strong and committed to the task. I know that this must be a most difficult time for you, your management team and your line employees. Therefore, I would like you to know that myself along with the Permanent Secretary in the Ministry of Tourism and the Chief Executive Officer of the SLTA stand ready to act as a bridge of communication between yourselves and the Health Authorities during this difficult period. Sincerely,

Honourable Dominic Fedee Minister of Tourism Information and Broadcasting, Culture and Creative Industries

By many measures, ferries are the ‘missing link’ of Caribbean tourism and transport

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ll in the Caribbean family recognise the central importance of airplanes and cruise ships to the region’s tourism industry; and, in turn, the importance of passage by land, sea and air for regular travel and business generally. But despite the bustle of transport that’s visible in our cities and among our major transport hubs, there remains a ‘missing link’ in the fleet, and its absence is undermining our potential. Yes, ferries are already seen among the region but, with the right infrastructure upgrades, they would be more commonplace, and bring economic benefits.

KEEPING A GOOD CREW The need to upgrade ferry infrastructure within the Caribbean centres around a key premise: there is the need to upgrade infrastructure, but that does not mean any requirement to otherwise

change the existing ferry network. Enhancing existing amenities and adding new ones wouldn’t hinder present operators, but be a boost to them. Companies like the Martinique-based French operator Express des Iles could stand to benefit immensely. Running routes between Saint Lucia, Guadeloupe, Marie-Galante, Les Saintes, Dominica and its homeport of Martinique, this and similar businesses provide proof positive of the Caribbean’s potential to become a ferry epicentre. But however fantastic an individual business or ferry trip may be, without the complementary infrastructure to board passengers and receive them at additional locales, then the region’s transport potential is massively unrealised. As an example: for many years tourists keen to island-hop between Grenada and nearby states like Saint Lucia have lamented the lack of a ferry service. Continued on page 6


WOMEN IN BUSINESS

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MARCH 28, 2020

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THE RISE OF FEMALE STEMPRENEURS BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

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he number of women entrepreneurs in the traditionally maledominated fields of science, technology, engineering and mathematics is on the rise throughout Latin America and the Caribbean, according to the Inter-American Development Bank (IDB). A recent study from the IDB Lab and Santander X shows that these socalled STEMpreneurs are successfully raising capital, building start-ups and looking to scale up their businesses within the next five years – showing that this is a niche poised to contribute to more innovation, employment and economic growth in the region.

STUDYING SUCCESS The IDB surveyed 1,148 women entrepreneurs (founders or partners in start-ups) in LAC, out of which 400 were in the STEM fields. The top sectors were those that incorporated technology into mainstream services: FinTech, BioTech, EdTech and HealthTech. From this sampling, the IDB was able to draw some conclusions about the characteristics of successful female STEMpreneurs. Most are under 40 years old, just over half are single, the majority are highly educated, having a bachelor’s degree or higher, and over half have some form of international experience either by studying or working abroad. Ambitious and driven, most respondents said their innate passion fuelled their business along with the desire to push themselves personally and grow their companies outside their home countries into the regional market. Those involved in HealthTech and EdTech also expressed a willingness to address societal concerns, with many motivated to start their business having identified a need in their own communities. The most successful companies are rarely the work of one or two people. The IDB research highlights the importance of a support infrastructure and found that while family, friends and partners provide the most support on a personal level, funding appears to be split fairly evenly with 44 per cent saying they received financial support from their inner circle and 43 per cent from more formal sources such as venture capitalists, incubators, business accelerators and angel investors. The majority of female entrepreneurs surveyed by the IDB cited several key factors in explaining their success: personal ambition, motivation and

Attendees at a Sustaining Women in STEM Roundtable, hosted by NASA in November 2019. (Photo courtesy NASA)

mentoring. Two out of three had the benefit of a mentor to guide them which opened doors to more avenues of funding, as well as providing trusted advice and support. A CHALLENGING ENVIRONMENT Unsurprisingly, LAC’s female STEMpreneurs face many of the same hurdles as their male counterparts. These include operating within a stagnant economic environment, insufficient human capital with the requisite training and education, and inadequate networking to build the necessary business connections. The top three challenges noted by survey respondents were lack of financial support, lack of managerial and technical know-how and struggling to find a worklife balance. Financial resources is the main stumbling block and STEMpreneurs cast a wide net when trying to get their business off the ground. Less than half are self-financed with 54 per cent raising capital and, of that number, 73 per cent turned to a number of sources, favouring a combination of seed and venture capital funds. The majority of those ventures that raised over US$ 1mn in funding did so courtesy of these institutional investors. Within the capital raising cycle, various hurdles were identified. At the outset, when searching for seed money, 51 per cent of STEMpreneurs lacked the appropriate network to access the right investors. Once initial funding was sourced, 27 per cent noted difficulty in getting information about investment instruments and a general lack of financial knowledge about how to proceed. Heading into the third stage, many felt that negotiating terms highlighted a mismatch in expectations when it came

to valuing the business and others experienced unfavourable terms in their final agreements. Aside from financial obstacles, research also showed that women in this niche believe gender perceptions and social constraints are holding them back. Respondents noted that a lack of confidence, the domestic sacrifices required and a lack of strong personal and professional networks hampered opportunities for women-led start-ups.

UNTAPPED POTENTIAL The business landscape is changing. Within the last five years there has

“Women founders are just as ambitious as men in their business growth,” says Susana Garcia-Robles, Chief of Investment Unit and Gender Initiatives Coordinator at IDB Lab. “Women are responsible for 64 per cent of all global purchasing decisions on products and services so having women in C-level positions in a company increases the chance that a startup reaches a massive market.”

been a sharp uptick in the number of women moving into the entrepreneurial space and, according to the IDB, this trend is set to continue. With 80 per cent of female STEMpreneurs aiming to take their business international within the next five years, there is untapped potential for this niche to make a positive impact on Caribbean growth and development. “Women founders are just as ambitious as men in their business growth,” says Susana Garcia-Robles, Chief of Investment Unit and Gender Initiatives Coordinator at IDB Lab. “Women are responsible for 64 per cent of all global purchasing decisions on products and services so having women in C-level positions in a company increases the chance that a start-up reaches a massive market.” To fully develop this niche, the IDB recommends a new approach from both investors and governments. More women involved in accelerators and incubators (for example, on investment committees or in competition judging panels), investing in companies with a positive work-life balance and recognising and celebrating female mentors in the entrepreneurial space would encourage more movement in the private sector, according to the report. In terms of what governments can do, the IDB advises enhancing funding into the STEM sectors, creating national science and innovation centres with specific initiatives for women and strengthening education, scholarships and training SBW programmes.

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MARCH 28, 2020

CORONAVIRUS

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10 THINGS TO EXPECT IN THE COVID ECONOMY Continued from page 1

(1) LEAN TIMES FOR THE BIGGEST EARNER There is no avoiding the impact of COVID-19 on the Caribbean’s biggest industry – tourism. The World Travel and Tourism Council (WTTC) estimates that 50 million hospitality and travel-related jobs are at risk worldwide and global travel could fall as much as 25 per cent this year. Caribbean countries are already feeling the pinch as major markets such as the US, Canada and Europe implement travel bans and cruise ship companies cease or severely curtail their routes. There will be no quick fix or easy answer to the impact on tourism in the region, which will continue to be felt even after the crisis has passed as travellers tighten their belts. However, it is worth noting that tourism is an evergreen industry and has continued to sustain the Caribbean through hurricanes, the Zika scare and the 2008 financial crash. In the meantime, the Saint Lucia Tourism Authority is already taking steps to prepare for recovery and met recently with the Saint Lucia Hospitality and Tourism Association to discuss plans going forward. “This is part of our national strategy to make informed decisions to ensure the ultimate rebounding of the tourism industry,” said Minister of Tourism Dominic Fedee. “Considerations are already being undertaken for the recovery phase as we must ensure that Saint Lucia is positioned to regain its market share when the travel landscape changes.” (2) MORE ECONOMIC DIVERSIFICATION As one industry wanes, others come to the fore. Islands have always been cognisant of the danger in relying too heavily on a single industry but the message about economic diversification has never been more timely. Thanks to proactive stakeholders nudging the agenda, there has been some progress on this in recent years – a prime example being Saint Lucia’s successful foray into the Business Process Outsourcing market – but this will likely ramp up in the wake of the pandemic as a mixed bag approach offers greater economic protection. (3) GREATER REGIONAL INTEGRATION External shocks lead to greater regional

have a significant negative impact on the Caribbean’s recent efforts to dampen rising public debt.

(8) GREATER UPTAKE OF TECHNOLOGY With many now practising ‘social distancing’ to slow the spread of COVID-19, online services are becoming more crucial. Whether it’s employees working from home or off-site, customers shopping and banking online or quarantined patients turning to the internet for news, there will be a bigger burden on Caribbean telecommunications providers to keep systems up and running. This move to a more online society may also prompt new enterprise as technological tools are in greater demand, leading to future opportunities for savvy tech entrepreneurs. Tourism, the lifeblood of the Caribbean, is under serious threat from the COVID-19 pandemic. (Photo courtesy Chad Davis)

collaboration and the pandemic provides an opportunity for better Caribbean integration. Mobilising the region’s response has already involved a range of cross-country efforts and this will continue in the weeks ahead as no island goes unaffected. CARICOM and the OECS will be key players in mobilising recovery resources while groups such as Compete Caribbean and the Caribbean Development Bank will be instrumental in supporting the business community and facilitating development funding.

(4) A FOCUS ON SELF-RELIANCE Caribbean economies must look inwards for growth in the short-term. Whether it is prioritising the agricultural industry to enhance food security or encouraging the manufacturing sector, economies that bolster domestic industry will have a greater degree of economic sustainability and self-reliance. St Vincent and the Grenadines has been particularly proactive in this area – launching a food security and impact mitigation plan right at the start of the pandemic that aims to strengthen food production from backyard gardening to commercial operations. The country’s Biotechnology Institute has already increased seedling production in preparation. Other islands are following suit.

(5) A SHIFT IN INTERNATIONAL RELATIONS The pandemic sweeping the globe is a multi-national event and will likely have a long-term impact on trade relations, diplomatic efforts and official development assistance. China, the originator of the virus and one of the worst hit, is already seeing a severe contraction and experts estimate its US$ 14tn economy will shrink by as much as 6 per cent in the first quarter of this year. Given the country’s history of investment in the Caribbean, this will inevitably affect future FDI flows to the region. (6) SLOWING GDP GROWTH The Monetary Council of the Eastern Caribbean Currency Union estimates that even a best case scenario situation (ie containment of the pandemic by the end of June 2020) will slow GDP growth in the ECCU from an expected 3.3 per cent to 2.1 per cent, and the worst case scenario of a global recession will result in a 1.9 per cent contraction. (7) RISING UNEMPLOYMENT Substantial job losses in the tourism sector are likely to have a knock-on effect on all aspects of Caribbean life, from crime to social protection. Public schemes such as income support and national insurance will carry the burden in the short-term as the job market recovers and this will

(9) A NEW APPROACH TO EDUCATION As the virus took hold in the region this month, schools, colleges and universities gradually closed their doors in a coordinated containment effort. While the short-term disruption is obviously undesirable, the long-term effect could signal a change in the way educational services are offered. With more institutions exploring online learning and digital curriculums, customised to the needs of pupils and their families, less reliance on physical infrastructure (costly and often inadequate on many islands) may bring about a more progressive public education system in the future. (10) MORE ODA For Caribbean countries that have struggled to gain some measure of economic independence, a return to high levels of Official Development Assistance will seem like a step backwards. However, development aid will be a crucial lifeline in the region’s recovery, especially given the predicted contraction in FDI inflows. The Inter-American Development Bank is already standing by with US$ 2bn in resources to help member countries across Latin America and the Caribbean and the OPEC Fund for International Development has set aside a US$ 200mn financial package for long-term loans and private sector grants.


AFFORDABLE HOUSING

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AFFORDABLE HOUSING IN DOMINICA BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

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he devastation of successive natural disasters over the past decade has tested the resolve of Dominicans. Although comparatively few in the Caribbean family are total strangers to natural disasters, the demand placed upon this generation of Dominicans to plan a massive rebuild multiple times during the past five years is among the most heartwrenching regional stories; just the same as the success they’ve had in their rebuild is among its very best.

AFFORDABLE HOUSING AT A GLANCE 2015’s Tropical Storm Erika left devastation in its wake. The road to recovery for the nation’s housing stock after Erika would not be easy, with 16,000 – almost one in four Dominicans – held to be adversely affected by it. Following the storm, the government of Prime Minister Roosevelt Skerrit pursued a housing revolution. In September 2016 it contracted Montreal Management Consultants Est. (MMCE) and announced the launch of the Bellevue Chopin Housing Project. It’s a project that provides a snapshot into Dominica’s housing revolution, billed as a “Modern Medium-Income Residential Community” to replenish the housing supply lost in Petite Savanne village as a result of Erika. But then in 2017 the nation had to reckon with Hurricane Maria. For Prime Minister Skerrit the need for his government to expand the housing revolution was doubtless in mind when he live-streamed during Hurricane Maria the roof of his own home being torn off alongside that of many others in the surrounding streets. Almost 23,500 houses in Dominica were destroyed – around 90 per cent of the nation’s total housing stock. Once again, Dominica looked to a rebuild, but faced down a huge bill for it. One key advantage the Skerrit government had was that unlike after previous natural disasters, such as the 1979 Hurricane David that caused widespread carnage, there was the capacity to use revenue from the nation’s successful CIP, first introduced in 1993 as an economic lever for use in rebuilding the country’s residential supply. The government has been guarded about precise numbers of this big build, but with Prime Minister Skerrit declaring in 2018 that he expected 52

A look over the Bellevue Chopin Housing Project in Dominica as of January 2020 (Photo courtesy: www.Housingdominica.com)

per cent of the nation’s revenue in the financial year ahead to come from its CIP (amounting to EC$ 406.6mn out of EC$ 788.7mn), it’s easy to envision the substantial capital behind these works and the immense value of the CIP to the country of 74,000.

REBUILDING WITH URBAN PLANNING PRINCIPLES Dominica had a rare opportunity within this period to rebuild communities with contemporary urban planning and design principles at their core. By no means does the absence of such principles deny a community the chance to progress and improve (many of the great capitals of Europe lack such contemporary features but remain highly livable and thriving cities) but a major rebuild effort – however harrowing the reason it is required – provides the possibility of wiping the slate clean; to do away with old problems like lack of green space and high congestion that can hamper the livability and functionality of a community. Sound residential urban planning is not just about beautification and enjoyment of a neighbourhood; it involves pursuing designs of communities by utilising existing resources and providing for easy and efficient access to community hubs. This can be achieved by building in a

way that looks beyond the quality of the structures themselves and factors in the environment. Although the old village of Petite Savanne holds many happy memories for Dominicans who lived there in years gone by, it was an area prone to frequent landslides. Today, the redesign of the neighbourhood means that the risk of landslides has been addressed. The Bellevue Chopin Housing Project was given the green light for construction of over 350 residential units plus a new commercial centre, farmers’ market and multi-purpose playing field. Additions such as underground power cables offered the dual benefit of being resistant to adverse weather while also beautifying the streetscapes.

PROJECTS BEYOND BELLEVUE As well as the landmark achievements of Bellevue, Dominica has a number of other housing projects in development, including Castle Bruce, La Plaine and Grand Fond. These projects have varying completion dates but collectively they embody Dominica’s resolve to Build Back Better (BBB), confident in the nation’s capacity to turn the page on the successive natural disasters that brought the country to its knees. THE RISING WEALTH GAP REALITY Dominica’s housing revolution is

unquestionably an achievement, but it could yet give rise to new challenges down the line. While this construction drive has been propelled by need, in setting this political precedent the Skerrit government (and any others that follow) will have to reckon with an electorate that looks upon the real estate market with a keen awareness of the government’s capacity to engage in large-scale residential projects, and the expectation that it will be repeated whenever the voting public deems such works key to their vote. Presently the nation’s CIP is enjoying acclaim and bringing benefits borne out in bricks and mortar, but the government could have a delicate balancing act in years ahead in seeking to maintain the popular support of its CIP. There have been scandals associated with previous incarnations of Dominica’s programme; any more could spell trouble, as could further significant expansion in the nation’s rich-poor gap. Many citizens are obtaining affordable housing but other constructions have been devised to attract CIP citizens, like the luxury residences at Secret Bay where homes are on sale for SBW US$ 4mn or more.

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CHARTING A NEW COURSE FOR FERRIES Continued from page 2

If they cannot privately charter a boat, they must opt for the sometimes lessdesirable choice of flying, which can add great expense to any itinerary. In other instances, tourists are faced with the choice of booking a cruise that allows them to visit many islands, albeit on a restricted itinerary, or they forgo exploring the region and essentially stay in one nation for their entire trip. Then there’s the untapped market for ferry use by locals. As the 2015 World Bank Group report ‘Driving Tourism in the Eastern Caribbean: The Case for a Regional Ferry’ detailed: “ . . . there is little cross-elasticity of demand between air and sea travel, and only significant changes in price or trip durations could cause passengers to switch from one mode of transport to the other”, and that, in turn, a “regional ferry system would encourage a new class of traveler, and, therefore, will allow the region to tap into a potential new market of tourists, including local, intra-regional tourists who find it difficult to travel by air, as well as stayover international tourists who may be interested in traveling to more than one island”.

GETTING ALL HANDS ON DECK Beyond transport benefits alone, upgrading regional ferry capacity would be a tremendous boost to the surrounding communities that live and work around the docks. There’s also the possibility of tying in such upgrades with other amenities to aid growing industries, like moorings for luxury yachts that promise to inject an extra touch of glamour and additional tourist spend into any port at which they dock. A push for improvements would also extend and add to the existing ferry routes. Yes, the Caribbean Sea can be rough at times, especially in the hurricane season, but advances in technology promise a smoother journey for passengers. THE IMPLEMENTATION As a region with over two dozen states and in excess of 7,000 islands,

Martinique-based Express des Iles operates an inter-island route connecting Saint Lucia-Martinique-Dominica-Guadeloupe.

the Caribbean clearly offers a ferryfriendly environment. However, the route to optimising the local network does come with challenges. Similar to cruise ship port upgrades, new ferry terminals could be magnets for publicprivate partnerships (PPPs) but, as any international route would require coordination between multiple nations and the private sector, such a plan isn’t easy to reach agreement on. Prior measurements have put the average PPP at sub-US$ 100mn, which is small by international standards, and thus any project below that level is sure to see many bigger private firms decide to not buy in. In such circumstances, private investors may opt to buy into an

existing national network, like the British Virgin Islands’ extensive ferry system, over seeking to build big internationally. In turn, any structure built now must come with the added planning – and potential cost factored in – of climate-resilient design. Nonetheless, with the World Wildlife Fund estimating in 2015 that the total global value of key ocean assets is a colossal US$ 24tn, there’s no question the Caribbean could see its local slice of this sum reap immense ROI following a substantial upgrade of ferry infrastructure.

A TIME FOR INVESTMENT CARICOM (and other regional organisations in its spirit) seeks greater

regional economic integration. The grand achievements of such a dream – like a Caribbean-wide free trade agreement or adoption of a single currency – have many high barriers; increasing ferry use does not. It offers a strong but simple way to streamline the exchange of commerce between neighbouring nations. For Caribbean businesses anxious over the decline in air and cruise revenue due to the coronavirus, news of infrastructure upgrades for ferries would offer an alternative avenue for revenue generation in future, and a new reason to hold onto hope while navigating these turbulent waters.


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