Blue Power doubles investment in factory upgrade
The Blue Power Group, which sells soap and lumber, invested $65 million to expand its soap line and warehouse space.
The company initially estimated the investment at $30 million but that figure doubled, according to statements in its newly released financial report.
During the course of the year, Blue Power increased warehousing capacity, added air conditioning to the lumber depot, new bathing soap machinery, streamlined its production processes, implemented a second shift, introduced new products and new packaging, and started co-packing for three more distributors. In the process, the company added 18 more jobs across the two divisions.
The investment aided in growing profits, exports, revenues and employment, said Blue Power Chairman Dhiru Tanna. Earnings per share rose to $2.16 for the full year ending April 2017, from $1.35.
"In the soap division, we now have the capacity to produce substantially more product on a timely basis and our thrust in the coming year will be to work with our existing distributors and the companies for whom we co-pack to achieve more sales," said Tanna in comments prefacing the financials.
The company made yearly profit of $122 million, a 60 per cent improvement over the previous year's $76 million. Sales surpassed $1.4 billion, up 15 per cent from $1.2 billion last year.
The lumber depot division, which supplies both small contractors and large firms in the construction sector, showed an increase of 11 per cent and the soap division improved by 24 per cent. Export sales continued growing and was up 31 per cent.
Buoyed by the results, Tanna telegraphed confidence: "We believe the competitiveness of the Jamaican dollar will permit us to do better," he said.
In the domestic market, a large number of retail outlets, including supermarkets and pharmacies, now carry Blue Power products. In recent years, Tanna complained about weakening consumer spending and imports which clogged retail outlets at the expense of Blue Power products. It resulted in flattening sales at $1 billion. The results this year, manifested in double-digit sales growth, indicate a change of market atmosphere.
"We have achieved this while maintaining our special relationship with wholesalers in Kingston, who tend to move substantial quantities of product by supplying smaller shops and street vendors," said Tanna.
"In the export arena, we have continued to support the distributors of Blue Power products who have shown improved results. In addition, we have established relationships with three local distributors who acquire their branded products from us for export."
Blue Power operates from two areas of Kingston - a soap factory downtown at Victoria Avenue and its lumber depot in Papine. The company remains virtually debt free with long-term liabilities at $1.9 million, a fraction of its capital base of more than $670 million.