By Dennise Williams, Staff ReporterSHERWIN Williams (W.I.) Ltd., the manufacturer and distributor of automotive paint, decorative paint, furniture finishes and industrial maintenance coatings, is expecting a very merry Christmas.
As a part of the global paint-manufacturing firm Sherwin Williams, the Jamaican branch of the company has contributed significantly to the US$127.6 million in worldwide net income earned in 2002. So much so that, according to managing director (MD), Ian Forbes, "For the last two years, we received awards from Sherwin Williams International in the area of sales and profit performance."
Operating in over 30 countries, the parent company does not segregate its financial statement figures by country, and Forbes was reluctant to give out the Jamaican financials. However, the Sherwin Williams (International) unaudited Statement of Consolidated Income released on October 28, 2003 made reference to the contribution of the International segment of the company.
NET SALES
"Net sales in the International Coatings Segment increased 17.1 per cent to US$68.2 million in the third quarter and 5.3 per cent to US$194.9 million in the first nine months versus comparable periods last year. For the first nine months of the year, currency exchange fluctuations had a negative impact on sales comparisons. Excluding the effect of such currency fluctuations relative to last year, net sales for the Segment increased 15.1 per cent in the first nine months." Nonetheless, the MD is confident that in terms of Jamaican performance, 2003 will be no different than the last two award-winning years.
"In terms of sales, we are hopeful that we will have a bumper year. This time of year is our peak season." Figures released by the Statistical Institute of Jamaica (STATIN) state that Jamaica produced 10,408,000 litres (2,749,502.72 gallons) of paint in 2002. According to Forbes, in 2002, Sherwin Williams produced about 40 per cent of that figure with an employee base (direct and contract) of 250 persons. While not revealing the sales in dollars and cents, Forbes did state that the company is expecting growth in sales for 2003 to be in the region of 20 per cent.
Said the MD, "We are improving steadily and we are a major player in the market." However, in terms of actual market share that Sherwin Williams controls as opposed to Berger Paints, their main competitor, Forbes states, "The market share issue is contentious." Analyst reports published in June of 2003 state that Berger, with 500 distributors islandwide, increased its market share in the automotive paints arena from 15 per cent to 36 per cent in 2002.
MARKET LEADER POSITION
The analysts also state that in 2002, Berger controlled 70 per cent of the decorative paint market with Sherwin Williams in control of only 20 per cent. And while acknowledging that Berger is the market leader, Forbes vehemently objects to the numbers published. And he points out that where Berger enjoys the market leader position in Jamaica and even the wider Caribbean, worldwide, Sherwin Williams is the bigger company.
"Berger is number one, I will concede, but not by much, and only in the decorative paint segment of the market. I would say that in decorative paints, Berger has 55 per cent, at the most, of the market, with Sherwin Williams having 25 per cent. In automotive paints, we have 50 per cent market share and in the industrial market (paints used on heavy equipment, bridges and toll booths) we control 30-35 per cent share. Currently, we have 350-400 distributors of our products. Globally, Sherwin Williams is 20 to 30 times bigger than Berger."
And the numbers bear out this last statement. In 2002, the Sherwin Williams Company, owners of Sherwin Williams (W.I) experienced sales of US$5.184.8 billion in sales. While AsianPaints, owners of Berger Paints Jamaica Ltd, had only US$390 million for the same period. However, Berger paints is not Forbes' only source of competition.
Cheaper priced imported paints and locally manufactured paints are vying for a share of the lucrative paint sector. And Forbes is not dismissive of their impact. "We have seen the impact on our sales, but not a real dent. But one cannot ignore competition." Despite the recognition of imported and smaller local competition, the MD is not losing sleep at nights.
"In terms of quality, some of these paints are woefully short, even substandard quality. Customers do buy these 'cheap' brands but when it rains or when the paint is actually on their properties, they see the results. So they buy some of these paints once, and don't buy again. They then return to Sherwin Williams."
QUALITY VS PRICE
So it is quality that Sherwin Williams competes on and not price. "We will not get into a price war with our competition. I believe that we are indeed affordable." Additionally, Forbes states that paint is an investment in one's home. "Paint is an investment in the look and atmosphere of the home, so quality paints must be used. We cannot compromise our quality by using cheaper inputs to offer a cheaper price. We will attract customers by the continual improvements in our products. Right now we are certified ISO 9001: 2000, the latest in international quality standards. This is the hallmark of quality. Additionally, we try to put the needs of our customers first. Right now we offer a roller set through all our stores and distributors to help them in their painting at this time of year." And according to Forbes, it is going to be a bright Christmas not only in terms of sales. Jamaican consumers now have a more 'adventurous' taste in paint colours. "Right now yellow is a hot colour for Christmas 2003. Earth colours are also selling well. We find that people are also coming in to have their paint custom blended with our Fashion Tint System. White, of course, is the consistent seller throughout the years."
Five years ago, Jamaicans were not so open-minded to colour and says Forbes, "The standard colours that you find in the Visitors section of the telephone directory were more popular a few years back. But now, Jamaicans colour taste are more bold and daring." Forbes is also proud of Sherwin Williams' contribution to a number of local charities. He highlighted two. Forbes states, "We are good corporate citizens. For the last two years, we have sponsored the Jamaican women football league. Additionally, we are partners with the Possibility Programme. This is a programme targeting street boys in the 10-19 age group. We train them in the latest paint manufacturing technology and then assist them in finding jobs."
