McDonald’s retirement becomes effective Wednesday 1st May, 2013. He has been succeeded by Mustaffa Tarra, who served prior as senior manager of regional marketing at Berger Paints Emirates Limited.
McDonald leaves behind Berger, a subsidiary of Asian Paints, as the most dominant paint company in Jamaica with more than 55 per cent of the market. He is credited with playing a pivotal role in developing the 60-year-old paint manufacturer’s corporate strategy and policy directions that led to significant growth during his tenure.
The former managing director told the Business Observer that one of the cornerstones of Berger’s success has been its focus on quality, which has allowed the brand to develop recognition spanning across generations of Jamaicans. Berger holds the ISO 9001:2008 quality mark, as well as the ISO 14001:2004 environmental management standard.
“We don’t compromise quality, regardless of what we do,” McDonald said.
“A great part of our business is repeat business, and there are several cases we ask younger customers why they buy Berger and they say because they saw their parents buying it and have no complaints,” he added.
A culture of customer centricity has also been critical to Berger. McDonald said this led the company to developing products such as its popular tinting system, Colour World. With over 80 systems across Jamaica, Colour World allows customers from almost anywhere in Jamaica to get any particular colour they want.
“Thirty-two years ago, what we did was communicate to people what paint could do and how to apply paint and so on,” McDonald noted.
“Now, people know what paint is and how to apply it. What we have adapted is a customer-centric philosophy where we try to find out what customers want and try to surpass their expectations,” he said.
Another major difference between the local paint market today and the one McDonald entered into when he joined Berger as financial controller in 1981 — after working in senior management posts at Price Waterhouse & Company, West Indies Sugar Company and Clarendon Distillers Limited — is that there were about six brands, while today there are 19, with a substantial number of cheaper imports.
In a tough manufacturing environment, local paint producers have long complained that they are being ambushed by the cheaper imports without any protection from Government.
Berger has managed withstand the competition despite the challenges and in fact reported that it carved out a bigger share of the local market over the nine-month period ending December 31, 2012, when it posted net profits of $42.5 million on revenues of $1.3 billion, up three per cent and eight per cent respectively year on year.
“The consumers buy the cheap products once but don’t buy it again because the quality is poor,” said the former Berger boss.
“But we have differentiated ourselves from them by having after-sales services. If you buy a gallon of our paint, if you have a problem in application, preparation or anything, we have technical people who will go out on site and look and recommend and so on,” he continued. “When you buy a gallon of those cheap imports, that is it, nobody is there to investigate or correct any problems.”
A major complaint in the paint industry is that the Bureau of Standards does quality checks at the local factories but not on the imported paints, McDonald revealed.
“We don’t have much fear of the imports, because of our service and our quality, but I still think it should be addressed by the bureau,”
Aside from imports, McDonald also takes issue with Government policy that has traditionally been unfriendly to manufacturers.
He said that manufacturing must be integral to any recovery plan Jamaica has to address the account imbalances. But, even in the recent tax package, he said the country has acted in a manner that is counterproductive.
“Our own thinking is not geared towards this fundamental problem we have, where we have to improve our exports,” argued McDonald.
“This administrative feat that they introduced, for example, is making our products even more uncompetitive.”
Similar to other manufacturers, most of Berger’s manufacturing inputs are imported.
The economic downturn has had an adverse impact on sectors, such as automotive and construction, critical to the paint industry. With many of these sectors still struggling today, in a stagnant market, Berger has aggressively sought out foreign markets, enjoying tremendous success in the process — export paint sales volumes grew by 56 per cent last year.
Berger’s strongest export market is Belize, where it claims more than 30 per cent market share.
“We have an agent who warehouses and distributes, and of course we have introduced the tinting platform down there,” noted McDonald.
“So what we do is ship bases and colourants, and then they can tint whatever colour for whatever areas. We are growing at a pretty good pace, there and it is part of the reason why we are able to show the performance that we have,” he said.
McDonald said Belize is “a natural fit” because of its similarities to the Jamaican market, including the seasonalities. The company also has a presence in smaller territories such as Cayman Islands and Turks and Caicos, and has its sights set on communist Cuba.
“We are looking at Cuba, but of course there is the bureaucracy there,” McDonald said.
“We have all our documents approved and all that, so we are moving through. It is something we are pursuing actively but, at the same time, we are moving to grow Belize even more,” he added.
McDonald was made regional managing director for the Berger Caribbean units in 2006, and in 2008 was appointed to the Management Council of the International Business Unit of parent company Asian Paints, one of the 10 largest coating companies in the world with 23 paint manufacturing facilities servicing over 65 countries.
Post-retirement, McDonald remains on the Berger boards as an independent director.
He listed fostering a harmonious working environment, both within Berger and between the company and the community around which it operates on Spanish Town Road, as one of his most proud accomplishments of the last 30 plus years.
In terms of staff, McDonald boasted that Berger has a very low turnover, with over 60 per cent of the company’s 100 staff members having served there over 10 years.
“I think by communication and education, and building a trust, I think the company has showed remarkable improvement,” he said, noting that in recent times, the company has hardly had any disruptions.
Berger Paints is a major contributor to infrastructure development and nutrition programmes at the Riverton Meadows and Callaloo Mews Early Childhood Development Centres, in the communities adjoining the plant.
“We generally support community projects and the community looks on us as their friends,” he said.
His immediate post-retirement plans are to rest and travel, as he weighs several options currently on the table.
“That’s one of the beauties of retirement. You can take your time and choose what you want to do,” McDonald told the Business Observer.
“But whatever it is I do, it will be something to give back to the country. I haven’t decided, but I certainly won’t be sitting back.”