Mixed bag for manufacturing - Some lose markets, others ramp up shifts and output as demand swells
A picture of mixed fortunes in manufacturing is emerging from the full onset of the COVID-19 pandemic in Jamaica.
Amid the layoffs, cost-cuttings and supply chain challenges, and issues with the availability of foreign exchange, President of the Jamaica Manufacturers and Exporters Association, JMEA, Richard Pandohie, says the coronavirus has opened trade doors that the sector had been knocking on for a long time.
“On one level there have been great stories where those businesses have exploded in terms of exports. A lot of small manufacturers who are into natural juices, and natural products from cassava and natural spices have gone into markets that they have trying to do for years,” Pandohie told the Financial Gleaner.
One company that has seen an uptick in business, Jamaican Teas, had to lay on new work shifts and extra production days to keep up with export demand.
“Because of our product base, there’s been strong demand overseas to the extent that we’re doing overtime, even on Saturdays, to keep up with the extra demand, said JamTeas CEO John Mahfood. The company exports under its proprietary brand, Caribbean Dreams.
Pandohie says one of the outcomes of the COVID 19 pandemic is that people are looking to eat better. This, he says, has led to a search for natural products which is presenting Jamaica with a great opportunity for agro-processing left only for entrepreneurs to embrace.
At the same time Pandohie says that companies, especially those who service the tourism sector, like Rainforest Seafoods, down 85 per cent or those who supply the food service sector like poultry producer Jamaica Broilers Group, are facing challenges due to the lockdown of tourism businesses and schools, and falling patronage of restaurants and fast food establishments.
The worst hit, however, are the micro and small enterprises, the JMEA president said.
“The small and micro businesses that account for about 60 per cent of our membership base have been particularly affected by the restrictive hours of the curfew,” Pandohie said.
Following the announcement of Jamaica’s first COVID-19 case on March 10, the Government introduced a raft of measures covering workplace operations, public interaction and even transportation. And companies have fallen in line.
In a poll of manufacturers by the Financial Gleaner on how the pandemic has affected them, all said they had invested in sanitation, operational and screening protocols to guard against a coronavirus infection showing up in their plants.
In addition to the cleaning of surfaces, regular temperature checks and sanitation measures that all recounted, lubricants blender and distributor Paramount Trading Jamaica has taken the extra step of having two company nurses doing temperature checks upon departure and all members of staff have their own thermometers to check their temperature before leaving home. Paramount also has two quarantine areas for persons showing symptoms.
“We place a big premium on the mitigation measures and protocols to follow in the event of symptoms so if an employee self-checks at home; then they don’t report to work but rather call the Health Ministry numbers,” said Managing Director and CEO Hugh Graham.
PVC pipe maker and lighting distributor FosRich Company, which operates three shifts, has a marshal who tends to occupational health and safety issues and is in charge of sanitisation.
The companies too, to different degrees, have implemented special transportation arrangements for workers.
“We’re not taking any chances with those packed taxis that our workers tell us about,” said Mahfood of JamTeas.
“With our need to maintain a sterile environment for pharmaceutical manufacturing, and the fact that some of them had to be transported through the St Catherine lockdown it was just a no-brainer for us at FP,” added General Manager of Federated Pharmaceuticals, Yvette Johnson.
For Seprod, the logistical challenge of keeping production going with 1,750 full-time and 500-600 contract workers taxed the minds of the leadership. But Pandohie, who is CEO of that company, said having got it done – arranging company transportation from the closest point to the employees’ homes to around four manufacturing locations run by the conglomerate – it is now seen as practice for what is likely to become part of the new normal in a post-COVID environment.
Worldwide, there are efforts to develop a COVID-19 vaccine, but as of now there is no cure for the deadly virus.
“There is no post-COVID recovery, but rather we are taking about in-COVID recovery because a lot of the changes that we’re seeing will become our new normal,” the manufacturer said.
“We’re going to act as such. If things change for the better we’ll say ‘thank you Lord’, but we’re not waiting around to see what next will happen,” Pandohie said, after enduring a two-week closure of Seprod’s biscuit factory due to lack of demand, laying on transportation for staff while splitting work shifts through flexi-work arrangements so as to de-populate shop floors, and re-deploying staff as needed.
“The biggest risk that we have is to our people, so the contingency measures and protocols that we put in were aimed at mitigating the risk of exposure or contagion under COVID-19,” he said.
At FP, part of the Cari-Med Group, Johnson said she “didn’t have the luxury of having members work from home”, because of the high demand for over-the-counter medication and sanitation products. It meant splitting work shifts and running a 24-hour operation on some days.
“After putting in extra shifts for the 24 hour operation, stocking up on raw material in short supply, we have to be watching for signs of burnout from our staff in meeting demand. As soon as we manufacture, the products are out the door to the shelves through our sister company Kirk Distributors,” Johnson said.
Pandohie says the adjustments and contingency measures at Seprod, a listed company that trades on the stock exchange, have chopped 15 per cent off overall production. The effects, he said, should show up in the company’s second quarter earnings.
Paramount, which is also listed, expects a mixed bag. The cleaning and sanitising products it makes – bleach, rubbing alcohol, and cleaners – are ringing up consistent sales; but the lubricants side of the operation is on pause since the lockdowns and curfews have meant less traffic and therefore less need for lubricants to maintain motor vehicles, Graham said.