Sun | Dec 17, 2017

Sapphire Agriculture muscles into fertilizer market

Published:Thursday | September 14, 2017 | 11:43 AMNeville Graham

Backed by more than 200 distributors and 15 H&L Agro locations, Sapphire Agriculture Jamaica is muscling its way into the local fertilizer market, having launched its full product line at the Spanish Town Road, Kingston headquarters of H&L on Wednesday.

It was the culmination of a partnership which began in February, but which was formalized in August with H&L Agro taking exclusive distributorship, according to Sapphire Jamaica Managing Director, Daniel McHugh.

“We’ve been in the market as a standalone company for some time," McHugh said. "The operation came under my directorship in January and we started exploring a partnership with H&L in February. We’ve moved that along to the point where in August it became the exclusive distributor,” he added.

It is not immediately clear who are the backers of Sapphire. McHugh soft-pedaled on queries, saying only that the players are in it for more than gathering a quick margin.

“We have very, very serious investors behind us who are not interested in a quick buck, but entering into markets and industries where attention and investment are necessary,” he said, emphasizing that the business is about more than fertilizer.

“That ranges from agriculture and fertilizer supply to the new and emerging medical cannabis industry, and hopefully as soon as next year maybe we can step into something tourism-related as well. We are here as serious business people and we are here for the long haul,” McHugh declared.

He made no secret that the company is muscling its way into a crowded market where other players have conglomerate and international backing. McHugh is holding on to the numbers but says his backers and the partnership with H& L means they are serious.  

“We didn’t want to enter the market as a small scale fertilizer company," he said. "We wanted from the very outset to be a big boy, a serious player. We understand that it is very expensive to come on board on this scale, let alone reach these many farmers. We won’t give the level of investment. Suffice it to say that it is serious enough to show our belief in the Jamaican market,” McHugh added.

The Sapphire line of products covers the full range of fertilizers delivering the standard nutrients of Nitrogen, Phosphorous and Potassium, or NPK, along with required trace elements. Sapphire has positioned itself by adding 1-3 points more of each of the nutrients for the specific blend. The blends are carried in an organic medium that also carries more of the NPK in the ratio 4:3:3. McHugh says this is a deliberate strategy to reel in and hold on to customers and deliver benefits.  

“All of our blends have a 4:3:3 in there which is slow-released. That NPK is low enough so it’s not harmful, but good enough because it’s slow-released so that the plant can always pull on that nutrient. So when you get the initial NPK boost for 30-35 days the 4:3:3 is there for the next 90 days. Therefore when it comes to the next cycle there is an overlap that gives the plants a constant source of fertilization, hence bigger yields and better crops,” McHugh said.

H&L Agro carries other competing products despite the exclusive distributorship. CEO of parent company Hardware and Lumber, Lloyd Distant says the Sapphire team approached the company after they had been selling into the market. He surmised that Sapphire saw the benefit of a partnership "because of our reach and the expertise we have in the market," noting that this is a good business proposition for H&L Agro.  

“This gives us an opportunity to extend our product line. Indeed, we carry products from our competitors, and in this case competitors of Sapphire, but to the extent that we are here talking about a product that carries organic matter then this is an opportunity to partner in a different way and with a company that is bringing something else to the market,” Distant said.

Sapphire fertilizer is produced in the Dominican Republic, according to McHugh. He adds that Sapphire is an international company in multiple countries throughout the Caribbean and South America. He said it was too early to give a year-on-year comparison about the company's revenue and growth.

“We’re increasing in multiples on a monthly basis. We know that at a certain point that growth will plateau but for now we are talking about doing volumes that are three and four times what we had in previous months,” McHugh said.

At the launch, there was a testimonial from coffee farmer, Gladford Brown, who says that he and other farmers who started out with a few sample bags of Sapphire fertilizer are now using the product by truckloads. McHugh says that is evidence of what is happening in the tight market.

“Growth has been steady and positive. Even during drought and rains people have been calling, wanting our products because they see the benefits. Those who have switched to Sapphire products have continued to stay. In fact, we’ve never had somebody come across to us and switch back,” McHugh said.

neville.graham@gleanerjm.com