Para­mount seeks foothold in re­gional lubri­cants sup­ply mar­ket

Jamaica Gleaner - - BUSINESS - Steven.jack­son@glean­erjm.com

Para­mount Ja­maica Limited will look ‘se­ri­ously’ at sup­ply­ing lubri­cants pro­duced in Ja­maica to the re­gion once its joint ven­ture plant is com­pleted.

“It will give us the abil­ity to fo­cus in a se­ri­ous way on the ex­port mar­ket,” said Para­mount Man­ag­ing Di­rec­tor Hugh Gra­ham in an up­date on the com­pany last Thurs­day at the monthly May­berry In­vestors Fo­rum in Kingston.

Man­u­fac­tur­ing the lubri­cants lo­cally will al­low the com­pany to avoid tar­iffs im­posed on im­ported goods into the re­gion.

“So with the ben­e­fit of be­ing in Ja­maica, and es­pe­cially go­ing into CARICOM, then that should give us a shoe in, or at least a toe in, be­cause we should have some ad­van­tages based on the tar­iff lev­els,” he said.

Para­mount is part­ner­ing with Amer­i­can com­pany Al­legheny Pe­tro­leum on the lubri­cants plant. The Ja­maican out­fit aims to achieve ef­fi­ciency lev­els on par with Al­legheny’s United States op­er­a­tions.

EF­FI­CIENCY KEY

“So all we have to do is be ef­fi­cient and prob­a­bly more ef­fi­cient than what they are do­ing in the US,” said Gra­ham “We are build­ing a brand-new fac­tory and brand-new equip­ment with all the lat­est tech­nolo­gies, so I do not see any rea­son why we can­not have the best ef­fi­cien­cies that ex­ist,” he said.

From 2015, Para­mount an­nounced plans to form a joint ven­ture with Al­legheny Pe­tro­leum in a move that would re­sult in a US$4-mil­lion or roughly $500mil­lion in­vest­ment. In July this year, the part­ners launched con­struc­tion of a 13,500-square­foot plant in Kingston to Hugh Gra­ham, man­ag­ing di­rec­tor of Para­mount Trad­ing Ja­maica Limited.

man­u­fac­ture in­dus­trial and food­grade lubri­cants. Gra­ham ex­pects the plant to be­come op­er­a­tional by Para­mount’s third quar­ter, end­ing Fe­bru­ary 2017.

Para­mount al­ready opened an oil, test­ing lab about two months ago as part of lubri­cants plant op­er­a­tion. The lab tests oils in high-per­for­mance en­gines and will ob­vi­ate the need to mail such oils over­seas for test­ing. In­dus­trial and fleet cus­tomers de­pend on oil eval­u­a­tion to in­form the health and ef­fi­ciency of their costly en­gines.

Para­mount earned $15 mil­lion net profit on rev­enues of $252.7 mil­lion for its Au­gust 2016 first quar­ter. Profit was nearly twothirds less than the $42.6 mil­lion earned a year ear­lier.

The com­pany cited one-off ex­penses re­lated to its re­brand­ing and logo de­sign, shift­ing from Para­mount Chem­i­cals to Para­mount Ja­maica, and staff re­wards as part of the com­pany’s 25th an­niver­sary cel­e­bra­tions, among other ini­tia­tives, for the spike in spend­ing.

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