Berger increases sales despite soft paint market
Berger Paints Jamaica Limited has reported a six per cent increase in paint sales
for the nine months ending December 31, 2014, despite what it described as a soft
paint market coming out of the Christmas period.
The company also posted increased net profit of $71.488 million or two per cent above the $63.838 million for the comparative period, an improvement bolstered by savings realised in operating expenses through ongoing process improvement, cost containment and the reduced corporate tax rate, Berger general manager Mustafa Turra told Wednesday Business.
While the demand during the holiday season in Jamaica was soft, the company was able to drive volume through its dealer counters with its Christmas promotion ran in partnership with selected partners, Turra said.
"Berger also benefitted from increased export volumes and was able to increase its market share with the launch of new luxury interior emulsion Royale Satin," he added.
The paint company holds the lead in the architectural and decorative paint segments, Turra said, having bolstered its position in the local paint market in the last couple of years.
"Berger commands even a stronger position at the premium end of the market," Turra added, though he would not say what the estimated share amounted to.
With a stagnant and "very competitive" marketplace, the company has invested in research and development which saw the launch of its virtually odourless luxury interior emulsion, Royale Satin, last November.
The new product, which was developed by the local technology team in collaboration with Berger group R&D, "performed very well in the market segment it caters to", the general manager said.
"Customers got excited with the feature and benefits the product offers in relation to being virtually odourless and it's best-in-class finish and stain resistance/removal," he said, while noting that volume of sales have been better than expected.
Turra said, however, that Berger Jamaica does expect growth in the local paint market in the current year, adding that demand is stagnant.
"Growth for Berger Jamaica came primarily from exports and also through introduction of the new product line (as well as) promotions during the Christmas season period," he said.
"The last quarter of the financial year has not shown very strong indicators of growth, but we remain hopeful to see an upswing in general economic performance and in the paint market in particular".
Berger Jamaica grew its December quarter sales by nine per cent to $678 million, while net profit rose by almost 25 per cent to $63 million. For the nine-month period, revenue rose six per cent to $1.5 billion, and profit by 12 per cent to $71.5 million.
The company closed the quarter with assets of just under $1.1 billion, compared to $1.06 billion at the end of 2013.