Paramount adds revenue stream with oil lab
Paramount Trading Jamaica Limited plans to expand its revenue stream by offering a local option for testing oils in high-performance engines.
The service will obviate the need to mail such oils overseas for testing.
The oil laboratory is "the only facility on the island that can provide services to analyse used oil. This will be a vital service for industrial and fleet customers that depend on oil evaluation to inform the health and efficiency of their costly engines," said Managing Director Hugh Graham in the company's newly released annual report.
Graham was unable to quantify the market potential with the testing lab, but he told the Financial Gleaner that the lab was opened about six weeks ago to a fair degree of interest.
He believes the service will gain traction with market trust and increased visibility.
Paramount surpassed the $1 billion mark in revenues for the first time in the year ending May 2016. Its profit after tax grew 19 per cent to $173 million, up from $146 million a year earlier. The lab forms part of the company's joint venture to set up a lubricant blending plant in Kingston with American partner Allegheny Petroleum, which owns the Altra brand of lubricants.
Paramount Chairman Radcliff Knibbs explained in the annual report that the lab would offer quantitative and qualitative analysis of oil samples and begin operations within the calendar year. Knibbs said it would allow for Jamaican companies to get "crucial information" about the health of oils in two days compared to the current system of sending away the samples and waiting upwards to a fortnight for feedback.
"This is a good example of how we envision bringing real value to Jamaican businesses and individuals through this partnership," the chairman said.
From 2015, Paramount announced plans to form a joint venture with Allegheny Petroleum in a move that would result in a US$4-million or roughly $500-million investment. In July this year, both partners launched construction of a 13,500-square-foot plant in Kingston to manufacture industrial and food-grade lubricants.
"It is anticipated that this will improve the company's overall efficiency and position us to be a major player in the local lubricant market with a keen eye on regional expansion to other Caribbean territories," stated the annual report. Construction is expected to be finalised by year end.
Paramount became a publicly traded company in December 2012, two decades after its 1991 founding. The company is engaged in the importation and distribution of chemicals and other related products. It also distributes the Sika brand of hardware products, including anchoring adhesives and sealants.