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Business venture
WHAT-TO-DO - FREEPORT/LUCAYA & GRAND BAHAMA ISLAND - JULY 2003
Business venture
Freeport owes its very existence to the vision of businessmen. It was founded as a business venture, developed along business lines and has emerged as a highly successful multi-faceted conglomeration of businesses. As with most Bahamian islands, tourism i
freeport owes its very existence to the vision of businessmen. It was founded as a business venture, developed along business lines and has emerged as a highly successful multi-faceted conglomeration of businesses.
As with most Bahamian islands, tourism is the mainstay of Grand Bahama, although the island has developed in several related and unrelated directions. They include light industry, film-making, agriculture, mariculture, financial services, transportation, trans-shipment, shipping and a host of related spin-offs of the marine industry.
Meat and potatoes
Still, tourism and its elements - hotels, construction, timeshare, local transport, gaming, golf, diving, fishing and entertainment - remain the meat and potatoes of Grand Bahama commerce. The rest is gravy.
It wasn't always thus. Freeport started as a pine barren, owned by the Abaco Lumber Company, which had expanded its operations to Grand Bahama in 1944. Two years later, a Virginia financier, Wallace Groves, bought the ailing company with its lumbering rights on Abaco and Grand Bahama.
By 1953 the company was the largest employer in The Bahamas with some 1,800 on the payroll.
During the early 1950s Groves conceived the idea of a new city on the island. He sold his lumber operation for $4 million and with the help, encouragement and guidance of the governor, the Earl of Ranfurly, planned the development of a "free port."
Freeport born
The Hawksbill Creek Agreement, which created Freeport, was signed August 4, 1955. The agreement was a contract between the Grand Bahama Port Authority (a private company whose shares were owned by Groves' wife, Georgette) and the government of The Bahamas.
Under the pact the government granted the Port Authority land to develop a community and industrial complex, including a harbour. The government agreed to waive for 99 years customs duties on non-consumable goods, and relax excise, stamp and export taxes.
In exchange for 2,000 acres of land, American shipbuilding magnate Daniel Ludwig dredged Freeport Harbour to 30 ft. The harbour welcomed its first ship in November, 1959. It has since undergone massive expansion and is now one of the western hemisphere's premier trans-shipment container ports.
By 1958 the Port Authority started building a ship-bunkering oil depot with Gulf Oil, forming the Freeport Bunkering Company.
The pace picks up
In 1960 the government and Port Authority signed a supplemental agreement for more land, requiring the Port Authority to build a 200-room hotel by the end of 1963.
Around the same time, Canadian financier Lou Chesler helped the Port Authority form the Grand Bahama Development Company, which triggered a home-building boom.
The Lucayan Beach Hotel, with its intimate Monte Carlo-type casino, opened on New Year's Eve, 1963.
Rapid development followed and, to meet the growing need for hotel rooms, the aging 1,000-passenger steamship SS Italia was converted into a floating hotel in the deep water harbour and rechristened The Imperial Bahama.
The Bahama Cement Company, a subsidiary of the US Steel Corporation, was opened in 1965 with a 12-year monopoly to make cement in The Bahamas. Limestone, the key ingredient of cement was obtained freely from dredging of the harbour.
In 1967 the Progressive Liberal Party (PLP) headed by Lynden Pindling came to power, carrying both Grand Bahama seats.
Freeport was running its own show, including the liberal issuance of work permits for foreign workers. Then Pindling called another election and in April, 1968, won 29 of the House of Assembly's 38 seats. With the government's firmer grip on Freeport and the Port Authority and tighter controls on work permits, customs duties and other tariffs, Port Authority licencees rebelled.
A Royal Commission was appointed to study the Grand Bahama situation and the government eventually amended the Hawksbill Creek Agreement to give it more control over immigration in Freeport.
Industrial expansion
The rapid growth of Grand Bahama in the 1960s saw many fortunes made under its freewheeling private enterprise system.
Todhunter-Mitchell, distillers and bottlers of wines and spirits, has been operating and expanding since the mid 1960s. The International Bazaar, featuring about 80 shops from around the world, added a cosmopolitan aura to Freeport in 1967.
Syntex Pharmaceuticals Intl was built in 1967 and expanded to an investment of more than $30 million in the early 1980s. Franklin Chemicals began producing the active ingredient for its ulcer drug, Tagamet, and research labs of Nita Pharmaceuticals and Cooper's Laboratories were established. Uniroyal began producing anti-oxidants for the US market.
The Bahamas Oil Refining Company (BORCO), a combination of Standard Oil and Chevron interests, was producing 500,000 barrels of fuel a day by 1970. BORCO ceased processing crude oil in 1985 because of deteriorating refining economics in the Caribbean. It is still involved in terminal operations including trans-shipping, blending and storing of oil and bunkering of ships.
In the mid 1970s Edward St George and Charles and Jack Hayward, of the Firth Cleveland Group of Companies, a steel and engineering corporate giant, came on the scene. Charles invested a million pounds in the Port Authority and became chairman. His son Jack became administrative vice president. In 1978 Jack bought out Wallace Groves for $32 million.
Attracting business
The development of the port area and a light industrial park (Sea/Air Business Centre) between the port and the airport attracted a host of companies, including Bahama Rock, Freeport Tug and Towing Services, Hemisphere Container Repair, Polymers International, Bradford Grand Bahama, Grand Bahama Shipyard, Motherwell Bridge, West Atlantic Marine, Great Lakes Dredge and Dock, and a host of shipping and cruise lines, shipping agents, customs brokers and freight forwarders.
In 1986 the Lucayan Beach Hotel and Casino opened and work began on the Port Lucaya Marketplace, an idea sparked by legendary jazz musician Count Basie, a longtime resident of Freeport.
Grand Bahama Brewing Company began operations in 1996 and owner Greg Langstaff is optimistic enough about the island's future that he has installed equipment to raise his monthly capacity from 5,000 to 8,000 cases of his Hammerhead, Lucayan, Amber and Stout lagers and ales.
Since completion of Phase I of the development project in 1997, Freeport Container Port has undergone extensive upgrading and development.
Also at Freeport Harbour is the new multi-million-dollar upgraded cruise passenger terminal.
Despite wide fluctuations in global economies, Freeport is prepared and business continues to thrive.
Andre Cartwright, executive vice president and group comptroller at the Grand Bahama Port Authority puts it concisely: "Luck happens when preparation meets opportunity."
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