Sabrina Gordon, Business Reporter
Berger Paints Jamaica Limited has eked out a marginal gain in sales despite increasing joblessness and a economy that has flatlined.
The company, however, is bearish in its outlook, citing market uncertainty in both the commercial and consumer segments.
"We find that with businesses on a whole, there is a lot of uncertainty, there is this wait-and-see mode, and this affects not only businesses but also consumers as reflected in their spending," said Warren McDonald, Berger Paints regional managing director.
"However, we expect an upswing over the Christmas, although not as much as past years because of the uncertainty," he said Wednesday.
For the six-month reporting period, Berger Jamaica's sales totalled J$703.8 million, up five per cent over the J$670.5 million turnover at half-year 2011.
"Our sales are up a little, but, overall, the performance is a reflection of what is happening in the economy," said McDonald.
McDonald said while the paint market remains sluggish overall, some products are holding their own, including the company's decorative line which is still performing better than last year and its low/affordable range of paints such as Magicote, which is up 40 per cent over last year.
"What we see is that people buy the less expensive products," said McDonald.
Profit from operations were down to J$11.8 million at half-year from J$16.5 million. Although reflecting a turnaround from its loss position for the same period in 2011, net profit for the period was a meagre J$3.7 million after extraordinary items.
During the period, the company booked a charge of J$6.86 million due to continued restructuring of some of its operations to drive efficiency at the Kingston plant. Extraordinary charges the year before amounted to J$17 million.
"Over the years, we have been trying to improve efficiency in our production processes so some activity, instead of being manually done, are now done using computers," said McDonald.
Illustrating, the paint executive said the job of shaders - that is, workers who would test to see that the right shade was obtained after mixing colours - is now being done by a computer. A new computer program was also installed to help reduce factory losses and better manage the inventory.
"We are part of the Asian Paint Group, which is able to negotiate worldwide and get special pricing on volumes, so we benefit from that," said McDonald. Asian Paint is headquartered in Mumbai, India.
McDonald said Berger Jamaica will continue to drive efficiency and focus on new products in the periods ahead.
"We are still expanding our colour wheel and we have put ourselves in a position to respond quickly as soon as the economy turns around," he told the Financial Gleaner.
The company has a two-year plan to grow capacity at the Spanish Town Road plant and upgrade filling lines, McDonald said.