KWL setting up pre-inspection facility for used car imports
Kingston Wharves Limited (KWL) is setting up a pre-delivery inspection facility at Tinson Pen in Kingston, with the aim of taking over the inspection service for used car imports.
The Jamaican Government mandated that pre-owned vehicles must undergo inspection prior to entering Jamaica's ports, a service currently contracted to a Japanese company.
Since implementation of the pre-shipment inspections in February, the time and cost for the importation of used motor vehicles have increased, said Chief Executive Officer Grantley Stephenson, while noting that KWL proposes to offer the service at a lower cost to importers.
"We are working with the Government to see if we can bring this pre-inspection to Jamaica to serve the entire Caribbean area and that will be one of our areas of focus for the remainder of this year," Stephenson said Thursday.
"The pre-delivery centre will be built out before the end of this year, as soon as we have received our special economic zone designation."
KWL's immediate plan is the continued expansion of the Tinson Pen near-port logistics centre, Stephenson told shareholders at the company's annual general meeting.
He said that in an effort to continue on its growth trajectory, KWL is also looking at other areas for logistics expansion.
KWL some years ago had acquired 13.8 acres of land behind Tinson Pen on Ashenheim Road off Marcus Garvey Drive and one of the projects slated for this year is the construction of another warehousing complex, which would be approximately twice the size of the recently opened total logistics centre at New Port West in Kingston, Stephenson also announced.
A third of that 300,000 square feet warehouse, which will be an even more modern facility, will be refrigerated space and the remaining 200,000 square feet will be for dry storage, he said.
Stephenson told the Financial Gleaner that about US$30 million will be invested to build out the additional warehouse space and that construction is expected to start by the end of this year.
"There are lots of opportunities and, as the Jamaican saying goes, 'you have to strike while the iron is hot'. We don't want to drag this thing out and then these opportunities go to other countries, because this is a highly competitive business. All our neighbours are becoming involved in it. So one has to move fast," he said.
The KWL CEO said provision will be made to lease part of the new storage space, noting that one of the main differences with the proposed new warehouse is that it will be made in a manner so that it can be subdivided.
"So if you are a small business and only need, say 3,000 square feet, we can provide you with that," he said, adding that "we will develop in phases".
Last year, KWL grew its profit by 25 per cent to nearly $1.65 billion. For the first quarter of 2018, profit increased 11 per cent to $374 million. Terminal operations contributed $1.3 billion to the $1.6 billion of revenues earned in the quarter, while divisional profits increased by 16 per cent from $331 million to $385 million.
KWL said the growth in revenues and profits reflected the strengthening of its domestic containerised cargo operations, along with an improvement in its domestic and trans-shipment services across a range of cargo types, including automotive, bulk and break-bulk.
The logistics services division also made gains with total revenues amounting to $397 million, an increase of 22 per cent over the corresponding period in 2017.
KWL said one of the drivers behind that revenue growth was the widened range of commercial services and the improved customer service experience that have become possible with the total logistics facility.
However, operating profit for the division was down 15 per cent in the quarter, due to start-up costs associated with the new facility at Tinson Pen.