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Imports choke local plastic manufacturer

Published:Friday | July 1, 2016 | 7:00 AMNeville Graham
Hugh Gray, head of Agri & Industrial Packaging Limited.

Hugh Gray, owner of the manufacturing outfit Agri & Industrial Packaging, previously weathered competition from imports, but business is faltering after three decades, despite new investments.

Gray reckons he has three serious rivals - Flexpack, Duroseals and Jiffy's - in a market of around 16 actors. But it is the cheap and huge quantity of imports that really worry him.

"Last year alone we spent about $25 million, increasing capacity, upgrading equipment, and putting in new equipment and all I can show for that up to now is having to run my machines at 33 per cent capacity," said Gray.

Agri & Industrial Packaging operates a 30,000-square-foot factory in Kingston and has been in business for 30 years. The company makes garbage bags, bin liners, film wrap, meat film, garment film, plain and printed poly rolls, pallet wrap and boutique bags.

Unlevel tax landscape

Gray believes that his products ought to be selling but he cites, as one problem, an unlevel tax landscape, making it hard to compete against "trouble that comes by the container load".

"We pay a special EPL [environmental protection levy], but I don't know that the traders that are taking in container loads of plastics, which is much more than we can manufacture, pay any EPL," Gray said.

Agri & Industrial employs a staff of about 100. Twenty of them are hearing and speech impaired.

As the business struggles, Gray has cut shifts from three to one and adjusted production schedules.

"What we do is to run some machines only on certain days so that we get the most out of the short production run and save on total costs," he said.

The plastics manufacturer said last year alone some US$74 million of plastic packaging material was imported in Jamaica, and are cheaper than domestic output. He says he will be asking the Anti-Dumping and Subsidies Commission to investigate whether the activity rises to the level of dumping.

The commission investigates the effect of dumping on industries, rather than individual entities, which may require Agri & Industrial Packaging to pool with competitors to build a case.

neville.graham@gleanerjm.com