Sat | Aug 19, 2017

ARC Manufacturing expands markets into the Caribbean - Panama next as company considers listing on stock exchange

Published:Wednesday | January 25, 2017 | 1:00 AMNeville Graham
Deanell Barnes, vice-president of marketing, operations and international business at ARC Manufacturing.
Inside the Arc Manufacturing plant at Bell Road, Kingston.
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Norman Horne's building materials company ARC Manufacturing Limited is taking incremental steps into new regional markets, and is now preparing its next shipment of nails and roofing to French-speaking neighbour, Haiti.

ARC is already doing business in another Caribbean country, although that too is fairly new, as it opens up distribution channels for materials manufactured at its Kingston plant.

"It's an ongoing process," said vice-president of Marketing and International Business Deanall Barnes.

"We actually started shipping both nails and zinc from the last quarter of 2016. We also have a contract for shipments to Cayman Islands that we've been honouring since early 2016," he said. The company ships zinc to Cayman.

The Haiti contract calls for 15 containers of common wire nails and 10 containers of galvanised aluminium sheets, commonly called zinc sheets. Barnes declined to state the value of the contract.

ARC's sprawling complex spans 22 acres, encompassing its manufacturing and distribution operations, but the company says it is in negotiations to acquire another four acres to expand.

Its Caribbean foray starts with supplying markets from its Kingston plant, but ARC plans to ramp up its regional presence at some point to include manufacturing.

 

INITIAL STRATEGY

 

"The initial strategy is to do distribution but we are looking at setting up a small plant in Haiti where the major drawback is the consistent supply of electricity," Barnes told Gleaner Business. "Despite that, we are actively pursuing such a plan," he said.

ARC's growth plans are being executed as the company contemplates going public via a stock market listing.

For now, however, ARC is not willing to divulge much about its sales, nor the amount of capital it is currently investing, nor the size of the operation and its capacity.

"We can't say that, in terms of tonnage, just now; but we are in a position to produce enough wire nails and roofing material for the region including Jamaica, Trinidad and Haiti," said Barnes.

"We're still a private entity with the intention of going public, so it is only a matter of time before that information will be in the public domain," he said.

ARC Manufacturing has been producing roofing materials for over 18 years. But its regional market push also extends to supplying other materials, such as perimeter fencing, which it began producing in early 2016.

"Last week, we signed off on another 12 containers with a Florida-based company for chain link fencing to be delivered in Haiti," Barnes said.

Alongside the manufacture of construction wires and mesh, nails, fencing and roofing products, ARC also operates as a distributor of materials, such as lumber, steel and steel products, and cement.

In three to five years, Barnes said, the aim is to grow exports to 25 per cent of total revenue.

Its next target is the construction market in Panama. That country has been experiencing a construction boom in recent years, especially linked to the expansion of the Panama Canal to accommodate super cargo ships, which was finalised and commissioned last year.

"We head off to Panama in another two weeks to open that market for chain link fencing. It's just a matter of conferring with two major companies there, hammer a final price and set things in motion," said Barnes.

Founded by Norman Horne, ARC started out two decades ago producing wire nails, but expanded to roofing then barbed wire, chain-link fencing, welded mesh wire for concrete reinforcements and a lumber treatment plant. ARC also supplies its own brand of cement, ARCPlus, which is produced on its behalf by Caribbean Cement Company. Before that deal was struck, under ARC Systems, it competed with Caribbean Cement as an importer of the commodity.

ARC's policy, according to Barnes, is that a new line or new equipment be added every year. In keeping with that policy, in 2016 the company bought a new machine that will produce tracks and studs used for interior panelling and roofing, Barnes said.

Tracks and studs are currently imported, and ARC will be the first to manufacture them locally. It will also be able to produce metal purlins for roofing.

"In another 60 days we will be commissioning a tracks and studs machine," said Barnes. "It was a small investment, but with it, we can offer that product to the Jamaican market."

neville.graham@gleanerjm.com