In a development that has sparked questions about Berger Paints Jamaica Limited’s (BPJL) future direction, Chairman Adam Sabga and Director Andy Mahadeo have resigned from the board, effective October 31, 2024. Their departure comes amid a period of operational challenges and financial recovery efforts, suggesting possible internal pressures and strategic recalibration within the company.

The recent resignations mark the latest in a series of high-level executive changes since 2017, when BPJL was acquired by Trinidad-based conglomerate ANSA McAL. This acquisition, initiated through ANSA Coatings International Limited, saw ANSA acquiring a majority stake of 54.12 per cent, a pivotal move that positioned the company to implement its operational model and set new performance benchmarks for BPJL.

Since ANSA took control, BPJL has experienced frequent turnover in its executive ranks, with several key appointments and exits:

2018: Adam Sabga, the newly appointed director, was elevated to chairman during BPJL’s May 2018 annual meeting, leading an ANSA-backed transformation plan that involved aggressive capital investments to modernise BPJL’s production capabilities;2019: Barrington Graham, who served as general manager, resigned and was succeeded by Shashi Mahase. The transition marked the start of an intensified focus on restructuring, as BPJL grappled with increasing production costs and supply chain pressures.2020: Robert Polack joined as regional sales manager, aiming to expand BPJL’s regional market share and address rising competition from local and imported brands.

2022: Carlinton Montgomery, chief financial officer and company secretary, resigned effective December 30, 2022. His departure came as BPJL grappled with financial instability and rising operational costs, highlighting the demands of BPJL’s financial restructuring under ANSA McAL.

2023: After four years as general manager, Mahase was replaced by Dwaine Williams on October 10. With 12 years in senior FMCG roles, Williams was tasked with continuing BPJL’s transformation amid mixed financial results​.

While Williams’ appointment signalled a fresh phase in BPJL’s management, the company continued to undergo shifts at the highest levels, culminating in the recent resignations of Sabga and Mahadeo.

“Berger Paints Jamaica Limited (BRG) wishes to advise of the resignation of Mr Adam Sabga as chairman of the board and director, and Mr Andy Mahadeo as director of the company, effective October 31, 2024. As a result of his resignation from the board, Mr Andy Mahadeo also ceased to act as a member of the audit committee of the board of directors, effective October 31, 2024,” the company said in a notice posted on the Jamaica Stock Exchange of the most recent changes.

“We are thankful for their invaluable contributions, support, and leadership during their tenures as members of the board directors and wish them well in their future endeavours,” it added.

Despite multiple rounds of leadership restructuring and over $220 million invested in infrastructure improvements in 2023 alone, BPJL’s financial performance has been inconsistent.

The company reported a substantial $218 million loss in 2023, a stark contrast to previous years of modest profit and reflecting heightened operational costs despite cost-cutting efforts. The loss effectively wiped out cumulative profits from 2019 to 2022, signalling deeper structural issues.

The financial strain has continued to weigh on BPJL, even as the company saw incremental gains in 2024. For the six months ending June 2024, BPJL reported a 7 per cent revenue increase to $1.6 billion, alongside a 55 per cent rise in gross profit to $693 million. The performance, while positive, was tempered by rising manufacturing and operating expenses. In particular, the cost of goods sold dropped by 14 per cent, which helped drive profitability in the first half of the year, but BPJL’s financial outlook remains tenuous given its previous struggles​.

The sudden departure of Sabga and Mahadeo has led to speculation that the leadership changes may be linked to dissatisfaction with BPJL’s financial trajectory.

Sabga, who joined the board as chairman in 2018, had been at the forefront of BPJL’s ambitious “course correction” strategy, which included heavy investments in production capacity, a revamp of its sales approach, and cost reduction measures. Despite these efforts, BPJL’s position in Jamaica’s competitive paint market remains under pressure from both established rivals like Sherwin-Williams and an influx of imported brands​.

Mahadeo’s exit similarly raises questions about the alignment between BPJL’s operational strategies and ANSA’s overarching goals for its regional portfolio. Observers suggest that Sabga and Mahadeo’s resignations may indicate an internal reassessment at ANSA, as the company recalibrates its expectations for BPJL amidst fluctuating returns on investment.

Christian Llanos, who has been appointed interim chairman, inherits a challenging agenda that includes sustaining the modest gains achieved in early 2024 while addressing BPJL’s operational inefficiencies and intensifying its sales efforts. The company has also signalled its intent to launch new products in the second half of the year, developed through its recent infrastructural investments, as it seeks to capture a larger share of both local and export markets.

A new chairman and director will be appointed at the next meeting of the board of directors, the company said.