- Ian Allen/Staff Photographer
Sections of Henkel's manufacturing warehouse, with equipment now idle after the company ceased manufacturing activities and reverted to distribution.
Glenda Anderson, Staff Reporter
DESPITE THE injection of some $150 million in Govern-ment grants to aid the local manufacturing sector since 1997, close to 30 companies have since shut down or scaled down operations.
Several international companies which had been operating in the island, some for over 20 years, have also pulled down their shutters, complaining of high operating costs, security concerns and minimal Government support.
But Development Ministry officials say there has been substantial Government intervention since 1997 under a special assistance programme to manufacturers.
"The Office of the Cabinet (Development) has been working closely with the private sector on several initiatives in order to improve competitiveness," said Arnaldo Brown, consultant in the Office of the Prime Minister.
According to the Ministry: "Phase I of the programme covered the period January to October 1997. It provided grants totalling $58.9 million to 95 manufacturers to assist with payments for rental, security and finance charges, with the latter provided only to locally-owned companies.
PHASE II
"Phase II sought to assist companies to carry out structural changes, operational efficiencies and facilitate the transformation of the industry into higher levels of value added production.
"An additional $3.92 million was provided for technical assistance to 100 companies by employing six engineers who made 103 interventions, including 17 diagnostic studies. It is significant to note that the beneficiaries of the technical assistance provided were small Jamaican-owned companies which operate full package operations and which service the domestic and CARICOM markets for the most part," the document said.
COMPETITIVE SOURCES
In addition, $69.51 million was disbursed to three financial institutions to make available competitive sources for cash flow, debt restructuring and retooling.
But, since 2000, at least another eight companies have been shut down.
Henkel Jamaica Limited is among the companies which have recently made cutbacks to operations. The company, which has been operating in Jamaica since the 1960s, was forced to close its manufacturing lines early last year after the international parent body found that it was no longer cost-effective to operate its Jamaican unit. Most of its products were made locally.
Henkel's Finance and Administrative Manager, Steve Scott, said that the decision was part of a worldwide strategy by Henkel where only the most efficient of its outlets were being retained.
RAW MATERIAL
But one employee said another major factor was the high cost of importing raw material over the years.
Cremo Limited also closed its Spanish Town Road office in 2001 citing ongoing restructuring of its activities "to meet competitive demands."
Sunday Gleaner queries last week were directed to Nestle Jamaica's local office in Kingston. But there was no response to messages left for the contact, James Rawle.
Caribbean Casting, another local firm also cut back on production two years ago claiming 'low productivity' in a business which depends heavily on the fortunes of the local sugar industry which had been ailing for some time. The company operates a foundry which had been mainly supported by seasonal work to repair or refurbish crushers used in sugar cane farming.
The Development Ministry's report noted that "Prior to the implementation of the Special Assistance Programme, 34 apparel manufacturers closed their operations over the 1995/96 period. After implementation, closures fell to an average of seven per year."
