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ARC Manufacturing nails down expansion plan

ARC Manufacturing Nails Down Expansion Plan

Arc Manufacturing

ARC Manufacturing to transform Ferry Pen into manufacturing and distribution hub; Manufacturing plants to cover 18 acres of land

Construction and building supplies manufacturer, ARC Manufacturing has outlined an ambitious plan to develop the Ferry Pen area, which encompasses its Bell Road, Kingston 11 base, into a massive manufacturing and distribution hub.

Ferry Pen is located in the Three Miles area and is adjacent to Spanish Town Road on the left heading from Kingston. ARC Manufacturing chairman, Norman Horne, who made the announcement in an exclusive interview with the Caribbean Business Report, disclosed that the current Bell Road head office will be converted into a 100 per cent manufacturing facility.

The manufacturing facility will cover the entire 18 acres of land, which includes the former KIW warehouse, which ARC acquired from the Government some years ago and is currently being used for its lumber depot and warehousing facility. The acquisition of the warehouse property has allowed ARC to continue operating from that location which spreads towards its headquarters on Bell Road in Kingston.

“We have some other factories that we intend to bring on board at this facility,” Horne divulged. ARC Manufacturing, which is one of the leading manufacturers and distributors of premium-quality building materials in Jamaica, operates a series of plants on Bell Road, which stretches several football fields in length and width towards Spanish Town Road.

Two years ago ARC expanded to set up two additional plants that manufacture roofs and chain fencing. When quizzed about the plan, the ARC chairman explained that the development has been in the works for some time but the plans have had to be pushed back due to COVID-19, which has caused things to slow down a bit.

Horne was quick to add, “As soon as COVID-19 is over us, we plan to get back on track.”

FERRY PEN DEVELOPMENT WILL INCREASE COMPETITIVENESS

He emphasised that the overall plan for the manufacturing and distribution hub in the Ferry Pen area will make the company and its manufactured products more competitive. According to Horne, “We believe that we can produce a number of products competitively in Jamaica, not just for the local market but also for the export market.”

The ARC Manufacturing chairman declared, “I am encouraging the Government to pay more keen attention, in not necessarily protecting the domestic market but also increasing the competitiveness of local manufacturers so that local products will have a greater reach in the domestic market.”

Last week ARC Manufacturing won the support of US Ambassador to Jamaica Donald Tapia, who committed to assist the company with finding markets in America for its products. The US ambassador made the announcement during an interview with the Jamaica Observer following a tour of the company’s 14 Bell Road, Kingston 11, plant last week Thursday.

ARC Manufacturing produces a range of products and services including wire and steel products, chain-link fencing, aluminum-steel roofing tiles and more. The 18-acre plant features seven factories, including a state-of-the-art lumber treatment plant.

Published by the Jamaica Observer.

Norman Horne Explores Lockdown in Light of COVID-19

Norman Horne Explores Lockdown in Light of COVID-19

Arc Manufacturing

It is in times like these that Governments are put to the test. It is in times like these that Governments must take and implement extraordinary policy decisions and programmes to fast-track and realign the country on the road to development. The impact and implications of this COVID-19 are both seen and unseen and thus drastic times must call for drastic yet carefully balanced measures.

The hard truth

If we are one day past April 15, 2020, and the parishes of Kingston and St Andrew and the other 12 parishes are still under quarantine, having not joined St Catherine in “lockdown”, then Jamaica is seemingly on a pothole-riddled back road to COVID-19 recovery.

It is not a moot point that the human capital hub, now COVID-19 hotbed of Portmore is inextricably linked with both Kingston & St Andrew and Clarendon. As articulated by an employee: “Most of us who live in Portmore work and do everything else in Kingston. During the week we only sleep in Portmore.” Furthermore, the April 15, 2020 migration of persons from Portmore to Kingston & St Andrew buttresses the fact that not one of those three parishes can be divorced from the others. Furthermore, no parish within Jamaica’s 10,992 km2 is an island by itself. This is affirmed by the web of illness that COVID-19 is slowly weaving throughout our island and that which it has woven throughout the superpower states of the world.

The hard truth is that for the quickest socio-economic recovery, Jamaica would be better off sacrificing two weeks today as opposed to an indefinite period mere days after tomorrow. If we wait any longer to implement stringent social-distancing requirements, our best intentions may garner the worst results.

The misery index

We are a small country of approximately three million people. Population size will either be our fortune or prove fatal depending on the effectiveness of our national approach to COVID-19. The more the virus spreads and the longer the state of quarantine or lockdown lasts, then the greater the impact will be on the economy. We are all financially losing and will all continue to lose until COVID is cauterized.

The status quo today and in the short term for the average Jamaican indicates that the misery index is rising and may rise to epic proportions:

(1) Many Jamaicans are consuming, but not earning;

(2) Many Jamaicans have, or will exhaust all savings;

(3) Jamaicans with credit cards and great financial demands and responsibilities will max those cards out; and

(4) As a last resort, many Jamaicans have or will turn to borrowing at high exchange rates with the inability to repay in the short term.

 

The harsh realities that accompany the consumer burdened misery index will also have a severe impact upon the macroeconomy as follows:

(1) reduction in GDP;

(2) devaluation of the Jamaican dollar; and

(3) increase in inflation.

Presently, we are at risk of completely wiping out our micro, small and medium enterprises to include taxis, barbers, chefs, hairdressers, and small farmers who are all currently operating at a loss. Aside from the food industry and pharmaceuticals, many of us will not be able to survive a protracted collapse of the domestic economy.

The International Monetary Fund (IMF) has diagnosed that this “Great Lockdown” will be the “worst economic downturn since the Great Depression”. The IMF advises that, “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetime.”

Acknowledging the variable factors and the uncertainty in the projections regarding the reopening of the global economy, the IMF has already had requests for emergency financing from more than 90 countries to date. The IMF has committed US$1 trillion in lending for countries economically affected by the COVID-19 pandemic.

Though previously confident that our net international reserves of over US$3 billion would have been able to cushion the COVID-19 blow, our minister of finance has done the right thing by turning back to the IMF for much-needed financial support. However, with the sudden and premature closure of the compassionate grant programme, it is now incumbent upon the Government to provide the citizenry with firm assurance that there is not only a safety net, but also an implementation plan in place to provide adequate social security for the protection of the poorest and most vulnerable. The Government has likely not forgotten: “If it takes cash to care, it also takes caring to achieve even in the face of penury” (Edward Seaga).

Immediately: BPO lockdown

The numbers speak for themselves without need for further comment. It is said that the call centre is now the national epicentre of COVID-19, and the most prevalent view is that the longer the call centres are open the more rampant the spread of COVID-19 will be islandwide. With the best of economic intentions, it is better to sacrifice two weeks now as opposed to 12 months later. The safeguarding of the lives of the Jamaican people should always be our primary focus. We can restart the economy, but we cannot revive those who we have lost to COVID-19. Unlike the tourism industry, which has succumbed to COVID’s economic demise, the Business Process Outsource (BPO) industry like most others would not be at a complete standstill but would pause to allow for the eradication of COVID-19 as opposed to its further spread.

The Jamaican people are starting to question whether or not there is a motive for keeping the BPO sector fully operational during this time. The argument is that one COVID-19 case merited the lockdown of Bull Bay. A few COVID-19 cases merited the lockdown of Cornpiece. However, scores of COVID-19 cases have not merited the closure of the BPO sector. Only the Government can speak to this.

Next 30 days: Private and increased testing

To date, and with some success, the country’s approach has been tracing, tracking, isolation and testing. However, based on the increased COVID-19 numbers, we must take a more robust approach to identify all persons who have contracted the virus and place them all in isolation. Almost all of the countries with the greatest COVID-19 combat success were not only early into lockdown but also began robust testing at the beginning of the spread. It is clear that our rate and methodology of testing is not only slow, but is also not widespread enough.

The organisational skills which are utilised heavily by politicians to garner votes and win elections should be put aggressively to use to combat COVID-19. For example, to increase testing, strategically placed polling stations could be converted to testing stations. This would not only make testing more accessible and encourage voluntary testing for symptomatic citizens, but it would also give the Government a more precise geographic picture of the infected and uninfected communities.

We have learned from the dengue experience that in the tracking of viral outbreaks, the Government cannot do it alone. For example, in June 2019 the country was told categorically that there was no dengue outbreak. However, by October 2019, it was reported that there had been 88 dengue-related deaths, almost doubling the deaths related to the disease in the preceding year. The Government in leading the COVID-19 battle seems to wish to have centralised testing and centralised testing only. This was the same approach taken with dengue decades ago. Nevertheless, it was soon discovered that private testing only strengthened the Government’s initiative to diagnose, test, cure, and accurately report.

Rapid test kits are available on the international market. The Government should therefore approve the private import of said tests and encourage private doctors who are so willing to procure rapid test kits, test, and report the results as happens today with dengue.

Compassionate policy appeal

There is a view that more humanity and compassion is needed by the citizenry as we combat covid-19. Expectations of Government intervention are extremely high and in the field of agriculture and basic services, particularly electricity there have been conversations which call for a compassionate policy appeal to be made on behalf of the Jamaican people:

(1) Electricity Disconnection: Many consumers who are unable to earn are concerned that their electricity either has or will be disconnected due to non-payment. This may well become a reality for many of us. It would be prudent for the Government to make an appeal to the Jamaica Public Service in an attempt to negotiate payment plans and an extension of service for those who will or may be struggling to pay their electricity bills. We do not wish those who have no earnings to be left in the dark indefinitely.

(2) Agriculture: The disastrous impact that COVID-19 has had on the agricultural sector has been highly publicised and the Government has made a marked effort to intervene. However, a blueprint plan should be shared with the public since the public will have to participate in these efforts by consuming the excess produce as opposed to disposing same. It would be savvy if the Government identified all cold storage points throughout the island, identified all areas where there would likely be real demand and supply and thereafter route supply to demand in an organised and consumer friendly fashion.

We are in this together

With no section of society unscathed, COVID-19 is an indiscriminate virus that suffers no fools. We are all in this together. It is therefore our patriotic duty to educate, participate in the discourse, and be a part of solutions on the road to COVID-19 recovery.

It is time to lock down all 14 parishes for at least two weeks and clean the country of COVID-19. This is not a time to wait and play catch-up. Perhaps Murphy’s Law, “If it can happen, it will,” may be a guiding principle for how we should proceed. For a brighter tomorrow, we must sacrifice today.

Norman Horne CD, JP, is Executive Chairman of ARC Manufacturing Limited

Published by the Jamaica Observer.

The Multidimensional Effects of COVID-19

The multidimensional effects of COVID-19

Arc Manufacturing

In the field of disasters, COVID-19 is unique as its unrelenting disastrous effects simultaneously undermine the health and economic sectors of a country in a reasonably short time. The fact that its variables are for the most part unknown makes it dangerous and makes planning unsure.

Consequently, to avoid placing those two sectors in a comatose state, the response has to be twofold and in unison. This requires a fine balancing act.

As the Government grapples with trying to get it right, the manufacturing and distribution sector also has a similar challenge. Any success will depend not only on strategic, grave economic decisions but also on the existing health of the manufacturing companies. A company undergirded by good corporate governance practices and a vigorous risk management portfolio may better find the flexibility and agility required. Therefore, one positive outcome of this crisis could be the testing of each company so that lessons can be learned and ultimately our companies and the manufacturing sector can be stronger.

OPERATIONS
COVID-19 has already created a cultural business shift by invoking higher levels of creativity in response to having to function within a new abnormal. For example, as a result of the new social distancing behaviour, companies have now instituted work from home and flexi-work which was not welcomed with open arms generally but is now fully embraced by all.

Unfortunately, the only part of manufacturing and distribution that can be done from home is administration.

Operations are now between 9:00 am and 4:00 pm. We have had to adjust working hours and re-engineer the workplace to maintain social distancing. This has required the relocating of machinery and equipment. Also, deliveries have been rescheduled within the newly gazetted time, which has led to new overnighting arrangements for truck drivers.

Though COVID-19 has engendered a culture of fear, interestingly, it has also reinforced discipline in the workplace as employees are now seeing the important link between discipline, safety and production through a new lens.

We are all wearing masks and it is my view that everyone should wear a mask to stop the spread of COVID, be it paper, cloth, surgical or even a handkerchief because this is the best defence against the spread.

OIL PRICES
A drastic reduction in world oil prices has resulted in a substantial reduction in Jamaica’s oil bill. This will mean more foreign exchange than budgeted for the country and will further stabilise the Jamaican dollar.

Jamaica should now prudently maintain the same amount of resources budgeted for oil purchase and use the surplus to forward buy. This would provide greater levels of economic stability over the COVID-recovery period by taming inflation and by reducing the cost of production, transportation, and electricity.

IMPORT MARKET
There are some favourable conditions now. For example, some commodities, like steel, have a greater supply than demand resulting in a lowering of prices.

In relation to shipping, more cargo ships are available and the shipping rates are therefore lower owing to oil price reduction. This is good for the distributive trade.

However, with perishable commodities like timber, the reverse is true with an increase in prices.

Overall, it is suggested that imported goods will be in short supply. However, in the world post-COVID-19 it is difficult to project market pricing. We could easily see the markup or conversely the plummeting of the prices of building materials, commodities and manufactured goods as happened in the 2008 world financial crisis.

THE INVESTOR MARKET
With the advent of COVID-19, the initial reaction of investors was to take profits, thereby creating a dramatic depreciation in the world stock market. As it intensified, investors not only took profit but converted their investments to cash or near-cash investments. This has caused the mass devaluation of the stock markets resulting in the loss of trillions of capital.

Equally, the Jamaican stock market has suffered devaluation and capital erosion, thereby affecting all business sectors, including manufacturing.

Until the world turns the page, production is back in gear and companies start to enjoy earnings and investor confidence, this bear market will remain the status quo.

THE FAMILY
Commercial life has taught the seasoned businessman that for every debit, the offsetting entry is always a credit. Home can now be described as a multipurpose facility, thereby creating a fertile environment for family-oriented activities, especially since COVID-19 has highlighted the fragility of life.

Family bonding and the imparting of good social and spiritual values are now at a premium. Proper scheduling and time management with a double focus on work and family should pay great dividends in both work and family life.

THE FUTURE
The integrity of a healthy microcosm, be it in government, business, community or family, has been shown by COVID-19 to be of paramount importance. One takeaway is that to be able to withstand any shocks in a resilient way, one must have made good, solid decisions while building the foundation of that microcosm.

As a people, therefore, we must use the distilled wisdom of the past as evidenced by the actions of our forefathers coupled with present-day best practices in every area. We must now, more than ever, remain glued together, strongly anchored by the resilience of our people.

We shall overcome.

Norman Horne is Executive Chairman of ARC Manufacturing Ltd.

Published by The Jamaica Observer