Arc Manufacturing expands roofing operation
It has been a year since hardware company Arc Manufacturing segued into the production of metal roofing tiles, but the company is already boasting of a one-third claim of an estimated $2-billion market.
That is the closest Wednesday Business got to an assessment of the size of the manufacturing operation from Vice-President of Marketing and International Business Deanall Barnes.
"Whilst I'll not indicate what our gross revenues have been since the start of the year, I will tell you that we're comfortable with where we are thus far, and we're fully aware that there exists tremendous opportunities for further growth," Barnes said.
Arc Manufacturing spent close to US$3 million on its roof manufacturing line, which was installed by a New Zealand contractor. The project was financed with local debt.
"Our negotiations with the domestic bank have given us trade financing at a rate that is very competitive. This is sufficient to compete with the American institutions," said Norman Horne, the chairman and president of Arc.
The plant is operated by solar power, through a 100kw photovoltaic system. The excess power is sold to Jamaica Public Service Company, operator of the national grid, when the machines are idle.
"When we look at our JPS bill, before and after, we are very confident that within three, or maximum four, years it will pay for itself. We're, in fact, ahead of projections despite the decline in energy costs," Barnes said.
ARC declined to go public with the production capacity of the new line. Horne said it was proprietary information. "The only thing I will say is that we have the capacity to supply enough tiles to satisfy demand in Jamaica and Caricom in a single shift," he said.
Arc produces tiles in a range of colours, including terra cotta, in addition to shades of red, blue and green and grey. The tiles come in three profiles Classic, Spanish and Shake. Barnes says there is a natural fit between the new line and the galvanised aluminium sheets that Arc has been producing for over 18 years.
"It is a natural fit to the circular and industrial profiles that we were doing. So this is really an extension of what we have," he said.
Arc sources raw material from India as a continuous coil that is pre-coloured. The coil is split then cut into one-metre blanks that are, in turn, stamped into the shape of the tile. The company has also established forward linkages by partnering even with competitors to distribute the manufactured roofing tiles.
"The strategy is clear. We want to increase our throughput by using backward and forward integration. We do that by partnering with competitors and our suppliers," said Barnes.
Arc is a two-decade-old company founded by Horne. In addition to roofing, the company produces nails, barbed wire, chain-link fencing, welded mesh wire for concrete reinforcement; operates a lumber treatment plant - the boards are imported untreated in large sizes, cut to specification, and then treated - and supplies its own brand of cement, ARCPlus, which is produced on its behalf by Caribbean Cement Company. Prior to that business arrangement, Arc was a competitor to Caribbean Cement as an importer of the commodity.
Arc Manufacturing produces its various hardware products from a complex at Bell Road in Kingston, and operates a distribution centre in Montego Bay. The company also distributes through agents in key towns.