By Lavern Clarke, Staff ReporterAT LEAST one Jamaican company has decided to take a chance on the economy.
Tank-Weld, owned by the Bicknell family, on Monday re-adjusted the prices on its steel products because it said it believed in Prime Minister P.J. Patterson's assurances that the central bank would be taking action to stem the slide of the local currency.
Bruce Bicknell, company director and chief executive officer of Tank-Weld Metals, told Wednesday Business that the manufacturing and construction company has re-priced its products at an exchange rate in the low 60s, having priced as high as $72 in the past few weeks.
The roll-back was effected on Monday morning at the opening of business. Construction interests reported that steel had risen to more than $30,000 per tonne, coming from just over $20,000 for half inch steel. Bicknell said some of the increase stemmed from a 55 per cent increase in world prices, which he said was selling a year ago for about $14,000.
The roll-back will now see steel selling at around $27,000 per tonne, he said.
"We decided to show responsibility in our trade and demonstrate confidence that the economy will be stabilised," said Bicknell. "We're speculating in the right way."
The comment was in direct reference to charges by Government that it was chiefly speculation that was fuelling the demise of the currency.
Bicknell said prices were adjusted originally from the $55 at which it was purchasing foreign exchange, representing a 31 per cent currency hike, and a massive foreign exchange exposure which the company decided to dampen by passing on the costs to customers.
He said Tank-Weld Metals took that decision because Government, up to the weekend, had failed to signal that it was on top of the situation and the company was operating in an atmosphere of uncertainty.
MEASURES TO REGAIN BALANCE
But that changed Sunday night after the Prime Minister's speech was broadcast on national television. Having heard Mr. Patterson's warnings to speculators and measures to regain balance within the economy, Tank-Weld decided to take the chance that strong central bank intervention would stem the dollar's slide.
"We decided to demonstrate faith in the country," said Bicknell. "We are confident that the speculators will get burned." In addition, the company has been lobbying its customers and other businesses to follow suit.
The re-adjusted pricing has cropped 20 per cent off the increases, and will be adjusted further. "Once the dust settles, we will be able to put in our final prices," the Tank-Weld boss said.
