Paramount earnings dip with end of large contract

A first- and second-quarter slowdown in the construction sector coincided with a fall in profit at manufacturing and distribution company Paramount Trading Jamaica Limited at the kick-off of its current financial year.

The company did 28 per cent less business in the August quarter than a year ago, amid a near one per cent contraction in construction GDP.

However, Paramount Trading CEO Hugh Graham says that while the coincidence is remarkable, the decline at the chemical and lubricants company was more related to the ending of a large six-month contract to supply specialised construction inputs.

“We were at the end of the contract at Princess Hotel. We were the main admixture provider to that contract. Now that the wet-works are finished, our involvement at this stage is at an end,” Graham said, adding that he is optimistic that the company can make up for the fallout.

For the first quarter ending August, revenue slid from $595 million to $426 million. Graham didn’t specify the value of the Princess contract, but said such large jobs typically bring in US$1 million to US$1.5 million.

Paramount Trading is the local agent for Sika adhesives and admixtures, a product range that Graham describes as essential for delivering construction projects on schedule.

It typically takes 28 days for high-strength concrete to cure; this time can be shortened to even seven days, using the right admixtures, he says.

“All of these projects that are delivered in 12 months or so, it is admixtures that the industry uses to push them along. It would be impossible without it,” he said.

The company is also looking towards its food and industrial chemicals portfolio to deliver good results and re-energise its bottom lime, which skidded 37 per cent in the first quarter to $57 million.

Graham says Paramount will continue on its growth strategy using revenue diversification, innovation and talent acquisition. At the same time, he is lamenting a shortage of personnel at all levels of the business.

The latter is now a common lament amid record unemployment at 4.5 per cent, a level generally considered to mean that an economy is at or near full employment..

Graham says with labour being scarce, thought should now be given to importing workers, especially in specialist areas.

business@gleanerjm.com