Editorial | Beyond McIntosh’s closure

While this newspaper understands the uncertainties of business and does not have the details of what drove the decision, we are saddened by last week’s disclosure by McIntosh Bedding Company that it is closing after 60 years.

This sense of melancholy is deepened by the timing of the announcement, just days before the end of the year, giving the feel of an elongated exclamation mark on the act.

But more profound in the passing of this iconic family-owned business is its symbolism as a deeper erosion of Jamaica’s manufacturing sector – unless the space being vacated by McIntosh will quickly be occupied by another domestic firm. The alternative, assuming the demand for beds in Jamaica does not diminish, is that the production slack will be filled with imports.

In the circumstances, the McIntosh development, The Gleaner believes, deepens the case for a robust discussion about a coherent industrial policy for Jamaica in support of Prime Minister Andrew Holness’ declaration for his government’s “pivot” from macroeconomic stability to a search for strong and sustained growth.

Launched in 1964, McIntosh Bedding Company primarily manufactured Sealy mattresses under licence from Tempur Sealy, the giant US bedding company. McIntosh sold its products in Jamaica and the Caribbean.

Up-to-date statistics are not available, but a decade and a half ago, the privately held company reported that it had about 30 per cent of the Jamaican market for mattresses. What that translated to in dollar terms was not disclosed. However, McIntosh had a handful of domestic competitors, primarily Boss Furniture, Jamaica Bedding Company, and the Morgan Group’s Therapedic Caribbean.

However, apart from domestic production, the trade data website TrendEconomy put Jamaica’s import mattresses and related bedding material in 2023 at US$128 million. Another data site, Statista, estimates revenue from the bedding (non-mattress-related) segment of the market at US$4.79 million in 2024.

ANNOUNCED EXIT

This is part of the backdrop against which McIntosh Bedding announced its exit from the market last weekend.

“After 60 years of serving the needs of our clients in Jamaica and the Caribbean, it is with deep regret that McIntosh Bedding Co Ltd must close its doors,” the company’s founder, Donald McIntosh, said in a statement. “It has been our pleasure serving Jamaica as we focused on supplying a wide variety of quality products, with an emphasis on customer service.”

Without providing specifics, Mr McIntosh said that despite the best efforts of its managers, the company was unable to overcome decades of challenges, a recent and significant one being the COVID-19 pandemic.

“... We have been left with no choice but to say farewell,” Mr McIntosh said.

Presumably, McIntosh Bedding, in common with companies globally, faced supply-chain disruptions during the pandemic. That, if it were the case, would probably have been compounded by the difficulty of competing with cheaper imports from Asia in the face of issues such as high price of energy and other inputs as well as low labour productivity.

Such problems would hardly be peculiar only to McIntosh and/or its domestic competitors. And even if they were not issues that drove McIntosh’s decision, or did apply to other players in the sector, they are widely felt in the manufacturing industry, generally, despite its growth of 2.3 per cent in 2023, to account for nine per cent of GDP. Last year’s growth was driven mostly by food and beverages. Other segments contracted.

If manufacturing grows in 2024, trade data for the first eight months of the year suggest that again, the outcome will, at best, be uneven. Up to August, the value of Jamaica’s imports, at US$4.949 billion, was 2.6 per cent lower than for the same period in 2023. However, the Statistical Institute of Jamaica explained that the decline was “largely attributable” to a 12.7 per cent decline in raw materials/intermediate goods and a 1.9 downward shift in fuels and lubricants.

LESS ACTIVITY

In other words, fewer things that are shaped into final products came into the island. Which means less activity in factories.

At the same time, earnings from exports declined by 13.8 per cent to US$1.387 billion.

Months ago, Aubyn Hill, the trade and investment minister, called for Jamaica to pivot to an export-led economy, an idea for which this newspaper has great sympathy. It is a significant part of what is necessary if Jamaica is to break out of its decades-old confines of low wages, low productivity, low technology, and anaemic growth.

But as this newspaper and others have argued, and Prime Minister Holness implicitly acknowledges, this is unlikely to occur without an explicit, coordinated strategy – involving, among others, Government, the political Opposition, the private sector, labour organisations and civil society groups – around which there is national consensus. An industrial policy.

As we have suggested before, the National Partnership Council, given the range of parties involved and its broad mandate, is a good place to start these discussions.