SORE POINT!

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SORE POINT!

Wisynco chairman deplores use of foreign exchange to import other styrofoam alternatives

Friday, January 15, 2021

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Chairman of the Wisynco Group William Mahfood has expressed concerns about the use of foreign exchange to import non-biodegradable plastic alternatives as replacement of styrofoam food and beverage containers, following the Government's ban on the local manufacture, distribution, and use of expanded polystyrene foam containers.

Mahfood, who was speaking at the company's virtual annual general meeting held digitally yesterday, described the situation as a “sore point”, as he lamented about the locals who lost their jobs due to the closure of the company's styrofoam plant.

“Most of the take-out containers that we now see in circulation in Jamaica, are actually made up of non-biodegradable materials. Many of you who go out, as I do, and buy box lunches, get your product in a plastic container. These are all imported. Wisynco does not import any of these containers… we discontinued imports on plastic containers when the ban took effect,” he said.

Effective January 1, 2020, polystyrene foam containers — commonly called styrofoam after a US brand — are outlawed across the country as per the Natural Resources Conservation Authority Trade (Plastic Packaging Materials Prohibition) Order, 2018.

The closure of Wisynco's plant, which was the only manufacturer of styrofoam containers in the island, saw the company missing out on about $1 billion in revenue as its principals deemed alternatives too costly to compete with import options. The company discontinued selling all packaging materials, and had focused on its core business of food and drink distribution.

“The challenge I have as a Jamaican and a manufacturer is the fact that the Government took the decision to close the manufacturing plant — that had over 100 employees, and which made a tremendous amount of money in taxes and revenues to the country — and then allowed these plastic one-way packages to be imported,” the chairman said.

“We use more foreign exchange and we do not employ locals in the process to manufacture these items. I think it is unfortunate and a little bit short-sighted on behalf of the Government from a practical standpoint,” he continued.

He, however, added that the rollout of the Deposit Refund Scheme for plastic bottles later this year should impact positively on the recycling plants.

“I hope to see the day when the impact on the environment is minimised through the imports and local production,” Mahfood added.

Under the proposed plastic bottle initiative, which was initially slated for a 2020 launch, consumers are to receive a cash rebate for the return of plastic bottles to designated redemption centres across the island. These will then be processed for recycling, thereby removing them from the island's waste stream.

Wisynco Group for the financial year ended June 30, 2020 recorded an after-tax profit of $2.80 billion, a 4.1 per cent decline over the previous corresponding period. The company's net profit margin of 8.3 per cent for 2020 was lower than the 9.4 per cent realised for 2019 and was impacted primarily by the challenges of the fourth quarter of 2020 (April-June).

Revenue from continuing operations for the financial year under review was $32.2 billion.

For the quarter ended September 30, 2020, revenues fell from the $8.6 billion recorded in the prior corresponding quarter to $8.1 billion — due mainly to COVID-19 and the resultant downturn in business — while exports jumped by 43 per cent to earn $56 million.


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