Quality Dealers climbs on the roof

BY SHAMILLE SCOTT Business reporter

Wednesday, September 12, 2012    

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QUALITY Dealers will close its QD & Ace Hardware stores within two weeks and narrow its focus on supplying roofing material.

The 40-year-old hardware company has already invested US$1 million ($89 million) in a stone-coating plant, which it said will cut prices on metal roof tiles by more than half. It will also enable the company to export.

The plant — which will be tested in a month — can entirely supply local demand for stone-coated metal roof tiles, according to Eladio Walker, the company's new chief executive officer.

Walker, who was appointed this month, said that eliminating the need for imports could cut the cost of the material to below 40 per cent of current prices.

Export of the stone-coated metal tiles is possible because the plant has the capacity to manufacture more roofing material than is demanded by the local market.

The company has identified potential markets regionally, and already has plans to export to Venezuela. It has already been selected as the roofing supplier for a housing development project there.

However, the contract is dependent on approval under a debt exchange programme between the governments of Jamaica and the South American country.

While the company won't continue to sell hardware items, such as power and hand tools, it will still make mixed paint and floor tiles as well as ceiling and wall divisions — products which complement its roofing business.

"We are not trying to throw away resources that will make our company falter," Walker said.

He is focused on finding ways to further rationalise QD's operations, improve its efficiency and maximise profits.

"We have taken a hard look at ourselves and have analysed what would make the company stand out," said Walker.

The company's decision to narrow its focus on roofing, and related products, resulted from a change in the industry, which has made it difficult to sell hardware — such as plumbing and electrical supplies — and remain competitive.

Economic data shows the construction industry has been in decline for the last four years. The sector, which saw 81 per cent fewer housing starts from April to June than a year earlier, is now more than 15 per cent smaller than in June 2008, according to Planning Institute of Jamaica estimates.

QD is near to moving its operations to a location less than 40 per cent of the size of its current site.

It is not a big move — from one side of Red Hills Road to the other — but it will make a big difference. The new premises, which are almost 70 per cent completed, have 8,000 square feet (740 sq metres), compared to 21,000 sq feet in its old building.

It will house QD's administrative office and a new showroom, which will have solar-powered lighting and insulation to help it limit costs.



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