ARC expands mesh wire operation - Plans fivefold increase in US exports
ARC Manufacturing has sunk $200 million into an automated fabric mesh wire plant, and is now looking to quintuple exports to the United States.
Chairman Norman Horne says the new plant at Bell Road in Kingston should grow overall sales at the private company by three per cent.
ARC already produces wire mesh products with two older machines, but said the fully automated fabric mesh production line would allow it to ship 10 container loads to the United States monthly, instead of the current two.
Speaking at the plant commissioning on Tuesday, the CEO said ARC is targeting the US at a time when that country is pressuring main building materials supplier China, which faces a 40 per cent increase in costs due to countervailing measures and duties.
ARC will export duty free to the US market under the Caribbean Basin Initiative, Horne said, while also indicating that his outfit is being helped by Chinese expertise.
"Although we will be competing against them with the finished product, the Chinese are assisting is with the engineering," he said.
For the new unit, the monthly production is estimated at approximately 350 metric tonnes.
ARC, which is already supplying markets in Grand Cayman, St Lucia, Haiti, Turks & Caicos Islands, Guyana, Dominica and the US, aims to sell 150 tonnes of the material, monthly, to overseas clients.
Fabric mesh, described as is a staple in the construction industry, is used for the reinforcement and strengthening of concrete structures - including commercial buildings and residential homes.
Horne said Monday that the value of the local market for wire mesh was around $40 million. He did not elaborate on whether he was quoting domestic or hard currency.
The new mesh wire plant comprises 6,000 square feet of new operational space. The line is capable of producing fabric mesh sheet and rolls at high speed of 65 welds per minute.
It will reduce energy demand by 60 per cent and also reduce labour costs, Horne said, even while noting he plans to hire at least eight new employees for the plant.
With features such as compact mesh sheeting, the new installation reduces the size of the product coming off the assembly line, allowing for greater quantities to be delivered, the company said.
Additionally, the production line is connected to the internet which allows for remote monitoring and online generation of daily reports.
The ARC group founded by Horne is engaged in manufacturing and distribution. The Kingston complex houses seven factories on 18 acres.
Horne said that although the company had balanced its inventories between manufactured products and trade items to reduce risk, manufacturing continued to deliver far higher margins.
ARC's strategy, he said, has involved "manipulation of imported raw materials" to devise products for the building industry.
"We import zinc rods and use these for seven products. We use wire rods for nine products. This fungibility is important for us to achieve profitability in Jamaica," he said.
The ARC chairman told Gleaner Business that turnover for the company amounted to $10.2 billion last year, with a "trending minor increase in 2017 over 2016."
ARC's other manufacturing lines include steel products, lumber products - inclusive of boards, lumber, plywood and wooden doors - cement and aggregates, roofing materials, binding wire, nails, tract and studs.