Hurricane Maria Takes A Toll On Businesses In Puerto Rico
SCOTT SIMON, HOST:
It will be months before we learn how much Hurricane Maria costs Puerto Rico. The island was already facing bankruptcy. Now its fortunes are even lower. NPR's Tom Gjelten reports that the smallest businesses are in the most trouble.
TOM GJELTEN, BYLINE: Hurricane Maria reminded us how economies are vulnerable. Modern enterprises depend on a steady supply of power and reliable communications. The hurricane destroyed both in Puerto Rico. Many businesses with narrow margins for air are wiped out. Even the strongest are in a seriously weakened position.
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GJELTEN: We can start with this especially innovative company in an especially promising sector. Biotechnology is big business in Puerto Rico.
IGNACIO PINO: We breathe biology around here, and we're good at it.
GJELTEN: Ignacio Pino is one of the island's leading biotechnology entrepreneurs. His company CDI Lab is in the town of Mayaguez. Its 18 employees build human proteins for research organizations. It takes a while. The materials have to be cultured and refrigerated. That means it's really bad when the power goes out.
PINO: After, we threw everything away.
GJELTEN: All the shelves are empty.
PINO: We threw everything away because there was no way the small generator could run this monster.
GJELTEN: Pino was prepared. He had a backup generator plus a smaller backup to the backup. But when Maria hit, the main generator failed. The smaller one worked, but it couldn't power all his refrigerators.
PINO: We had to make a decision triage valuables basically and only keep what that generator could keep.
SIMON: Bottom line - Pino managed to preserve the most valuable cell cultures thanks to round-the-clock efforts and daily trips to the gas station to fill the diesel barrels he carried in the back of his pickup. After almost three weeks, power came back. But Hurricane Maria significantly set him back.
PINO: We had tremendous losses. Reagents, we paid a lot of money to have to be able to do our work. But now I got to get them back. Now I got to - some of them require growth before you actually use them. So that's weeks. So that's why I say it's a slow process of getting back.
GJELTEN: But Pino's company is in better shape than other small businesses. Hurricanes not only knock out power, they cause structural damage. Laura Om has a restaurant in downtown San - had a restaurant - got badly flooded. She rides her bike to the restaurant almost every day to check on it. But will she ever reopen?
LAURA OM: I don't know if it's worth it because I don't want to keep, you know - I have to pay salary. I have to pay the food, you know, the inventory.
GJELTEN: That's just one of her businesses. She also has a hair salon that, too, is closed - at least for now - and four vacation rental properties - same story.
OM: Everybody canceled. And people is canceling all the way through next year.
GJELTEN: Laura Om built all these enterprises with her own money, no business loans. She has exactly the spirit, energy and talent that Puerto Rico needs.
OM: I'm here because I had something important to do. I have a lot of employees that I really care about. So it's hard. Maybe we're not going to be able to have a business anymore. It's happening to a lot of people.
GJELTEN: That's the sad story. So many businesses have been forced to close here because they don't have power or can't afford a generator or the diesel to run it or because they've suffered too much damage. Few of them have sufficient cash reserves to survive being closed for an extended time. To reopen they'd have to renovate, buy new inventory, recruit new employees.
In Mayaguez, biotech entrepreneur Ignacio Pino thinks he'll make it - barely, he says. He's lost a lot of revenue and missed production deadlines, and he worries some customers could abandon him. Here in San Juan, Laura Om is already planning a comeback, but it might be in Florida. Like many other professionals here, she's thinking about relocating.
Realistically speaking, what do you think are the prospects for small businesses here in Puerto Rico?
OM: It's going to be very hard without power and without the help of the banks and the government. It's going to be hard. I don't even know how people is going to survive. (Laughter) I don't know.
GJELTEN: A sobering thought - this already weak economy is likely to get a lot worse before it gets better. Tom Gjelten, NPR News, San Juan.
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