School sales boost
THE return of nearly 500,000 primary and high school students to school in the near term is expected to restart engines in the manufacturing sector which have been idling for the last two years since the education sector closed down and then reduced face-to-face encounters due to COVID-19.
Among companies which reported reduced sales due to the closure of schools after March 2020 was Caribbean Flavours and Fragrances which indicated reduced demand for raw materials by many customers.
Derrimon Traders also reported, during the period, a significant downturn in the beverage portfolio primarily due to the closure of schools and the food service industry.
Jamaican Teas also indicated in one of its reports that its supermarket, Shoppers Delite, made a reduced contribution to the group’s results for a period due to curfew restrictions on its hours of operation and the closure of most schools.
The management of Wisynco also asserted in some reports that the coronavirus pandemic caused depressed activity specifically in areas such as tourism, bars and entertainment, restaurants and schools which had been unable to return to normalcy.
Even TransJamaican Highway, at one time, blamed school closures for lower revenues.
Periodically also, the Planning Institute of Jamaica reported that the closure of all schools and the implementation of general stay-at-home and work-from-home orders dampened the demand for goods and services.
Schools and their students are major purveyors of food and beverages as well as books and furnishings, paints, chemical cleaners and more.
While students attended classes remotely, some companies found substitute business lines to replace the revenue lost.
However, the full resumption of face-to-face classes, which is expected to occur in April 2022, is expected to further boost recovery.
John Mahfood, president of the Jamaica Manufacturers and Exporters Association (JMEA), told the Jamaica Observer that he expects the full resumption of face-to-face classes to result in increases in production and sales of locally manufactured goods.
He told the Business Observer, “Manufacturers of food and beverages, chemicals and pharmaceuticals are expected to see increases in the demand for their products.”
Expected to increase sharply is demand in the product categories such as small packaged juices, bottled water, dairy products, sugar and confectionaries, baked products and pastry to supply and replenish snack shops.
Wisynco Group’s Chairman William Mahfood told the Business Observer that he expects an uptick in revenue with the reopening of school, coming mainly from sales of TruJuices, Wata, Tru dairy products, St Mary snacks, Herr’s snacks, confectionery and ice creams.
The company, he stated, is “ensuring that our people are ready to have products delivered to the schools as soon as they are ready. I can only be hopeful that the new measures and opening will be long term but that will be decided once we have more knowledge of the pandemic,” he said.
Colin Steer, director of corporate communications at the Ministry of Education and Youth, told Business Observer that classes will resume after the mid-term break, noting that the total number of students expected to return to school was in the region of 424,689 while schools throughout the island number 984. College level students are not included in this count.
As at February 21, 2022, there are 53 infant schools, 733 primary, eight all-age, 18 junior high, and 172 secondary (including 157 high schools and 15 technical high schools).
Current enrollment for the sector expected to return to full face-to-face classes in April is 23,154 students at the infant level, 195,310 in primary schools and 206,225 in secondary schools.
John Mahfood pointed to fresh produce, meat and fish, processed food, sauces, spices and seasonings for which demand is also expected to rise to meet the need for increased preparation of lunches.
The JMEA head stated, “There is also an expected increase in the demand of medical and pharmaceuticals to supply schools with sanitiser, alcohol, masks and other medical items to meet protocols set to ensure safety and protection of staff and students.”
Further, an increase in the procurement of chemicals and cleaning agents is also expected, as these are needed on a more consistent basis for the detailed cleaning and continuous sanitisation of surfaces of the wider school compound.
The JMEA head stated, “Given the phased reopening of public schools, some manufacturers are seeing marginal increases in the demand of chemicals and cleaning agents since January 2022. Greater increases are expected in the coming months with the full resumption of face-to-face classes.”
It was noted that of the 462 members in the JMEA, approximately 30.7 per cent (142) are manufacturers of food and beverages, eight per cent (37) produces chemicals and cleaning agents and 1.3 per cent (6) manufactures pharmaceuticals.
Therefore, he outlined, “the reopening of school is expected to benefit approximately 40.2 per cent of JMEA’s membership.”
Notably, he observed, the pandemic negatively impacted many manufacturers. According to the JMEA’s Productive Sector COVID-19 Impact Survey conducted January-March 2021, 23.6 per cent of membership experienced loss of sales due to the fall in consumer demand by virtue of the pandemic which resulted in closure of schools as well as the significant drop in tourist arrivals.
Other challenges, which were identified by the JMEA survey, were workforce compliance and absenteeism (20 per cent), stock supply shortages (10.9 per cent), rising costs and prices (10.9 per cent), early or temporary business closures (10.9 per cent), challenges with transporting their products (7.3 per cent), cash flow problems (5.5 per cent), difficulty with the collection of receivables (3.6 per cent), amongst other challenges.