Gov’t Looking to Boost Business for State Tyre Company

Photo: JIS Photographer Transport, Works and Housing Minister, Dr. the Hon. Omar Davies (2nd left), and Permanent Secretary, Ministry of Transport, Works and Housing, Audrey Sewell (2nd right), listen, as Jamaica Ultimate Tyre Company Limited (JUTC II) Factory Manager, Hugh Smith (left), explains the tyre retreading process being undertaken by company employee, Ecolas Hughes, during the Ministry officials’ tour of the entity, situated on Maxfield Avenue in Kingston, on June 28, to familiarize themselves with the operations and staff. The entity, which specializes in tyre retreading, repairs and sales, and computerized wheel alignment and balancing of vehicles, is an agency of the Ministry.

The Ministry of Transport, Works and Housing is seeking to widen the Jamaica Ultimate Tyre Company Limited’s (JUTC II) client base, to include more public and private sector customers, as it seeks to maximize earnings for the company and realize savings for the Government.

JUTC II, a subsidiary of the Jamaica Urban Transit Company (JUTC), is regarded as one of the profitable agencies of government, having recoded gross profits ranging between $12 million and $30 million from its operations, which primarily entail tyre repairs, retreading and sales, and computerised wheel alignment and balancing.

Its major client is its state-owned parent company, and PETCOM is also a key customer.

Transport Minister, Hon. Dr. Omar Davies, who spoke to journalists following a tour of the company’s Maxfield Avenue-based factory and offices in St. Andrew on Friday, June 28, said while he is satisfied with the entity’s operations, discussions with the management have yielded “some things, which we need to do to expand their business.”

“For example, starting with the Ministry, itself, there is a lot more (business) we can put through JUTC II. We are always thinking of how we can expand and improve. I have some ideas, which I will share with the Permanent Secretary (Audrey Sewell), in terms of starting with entities in the Ministry, in utilising the services. This is a very important entity, because it is profitable. There aren’t very many public sector entities which fall in that category,” he stated.

While assuring that the move is not aimed at “taking away business from the private sector,” Dr. Davies argued that JUTC II “could do more” which would redound to “significant savings to the Government.”

General Manager of JUTC II, Kenry Jackson, explained that apart from the services it provides to the JUTC, the company has established business arrangements with several agencies that supply them with tyres for repairs.

“We also have a sales team…which literally goes across the island, collect the tyres, take them in, we retread them, (and) they take them back (to the various clients),’ he informed.

Mr. Jackson said the entity’s operations have enabled it to move from a situation where it was operating at a loss to its current position where, since 2009 “we have been showing a healthy bottom line, and it’s something we intend to continue, in spite of the challenges that we face.”

Outgoing Chairman, Dennis Chung, informed that the entity’s profits had increased steadily up to the 2012/13 fiscal year “when it took a dip to about $12 million”.

“For the fiscal year to date, already, for the first two months, we are over a million above target…we are at about $4.6 million. So, on that track, we think we will hit the $30 million again this year,” he stated.

Dr. Davies also took the opportunity to extend gratitude to Mr. Chung, who is a noted economist, for his service over the past six years.

“He has taken on a new position (as newly appointed Chief Executive Officer of the Private Sector Organization of Jamaica [PSOJ]) and he is demitting office. So I felt that I should come just to let him know that we appreciate what he has been doing,” the Minister said, while adding that selection of a new Chairman “will be dealt with shortly”.

JUTC II was formed in 2001 with a view to effecting savings in the operational cost of the JUTC, by providing a stable quality of long-lasting re-treaded tyres for the bus fleet. The company has since extended its services to other Government agencies and private entities.

Contact: Douglas McIntosh

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