Blue Power gets toehold in Hispanic market through new distributor
Blue Power Group Limited chalked up another year of $1 billion sales, saying the turnover, which was up by $15 million year on year, was fed by both growth in both the soap and lumber divisions.
Exports also performed well for the company, which plans to grow its overseas markets even more this year through a new soap-distribution partnership.
Of the $1.06 billion of sales by the group at year end April 2015, the lumber depot at Gordon Town Road in St Andrew accounted for $735 million. The Victoria Avenue-based soap division registered sales of $325 million.
Each operating segment grew sales by more than $7 million for the year.
Blue Power Group's export earnings remain comparatively small, relative to its Jamaican sales, but the demand is apparently rising. Export sales of $35 million outperformed the previous year's $26 million, fed by new distribution contracts for the United States and Guyanese markets.
The company expects the new arrangements to boost sales, "especially of the laundry soap", in its US market through new distributors, Iberia Foods, whose core focus is on Hispanic and Caribbean markets, said Blue Power chairman Dhiru Tanna at the company's annual general meeting on Tuesday.
Sales growth was also driven by new products that were launched in the fourth quarter under the Blue Power Castile line.
"Our customer surveys are pointing the way to determining the range of products that will eventually form our core range," the company said.
Blue Power group traditionally targeted the lower-income bracket through wholesalers but is now forging distribution links to tap the middle- and upper-income markets and has signed a deal with MegaMart to have its products displayed "for a limited period" in all four locations operated by the supermarket chain.
"We are discovering in terms of buying soap that uptown tends to behave just like downtown," Tanna said of market strategies to push sales through bundles packages of various fragrances of soaps.
A new wrapping machine commissioned last year also allowed the company to roll out the new soaps with more cost-effective wrappings, "enabling us to sell the products at affordable prices".
Blue Power made net profit of more than $70 million, down from $93 million in the previous year. The company is back to paying corporate income tax after five years of full waivers but still enjoys a 50 per cent discount under the 10-year incentive programme for junior stock market companies.
The lumber division contributed $26 million of net profits, while the soap division contributed $45 million.