SOS back in the market for industrial racks
Stationery & Office Supplies Limited, SOS, has expanded its range of products with a line of industrial racking.
SOS, which is known for its supplies of office furniture and equipment, was previously in the business of supplying industrial racking but exited the space due to pricing issues. It left the company dealing only in ‘light’ industrial racking products that facilitates weights of up to 1,500 pounds.
But now it’s back in the market, having struck a recent agreement with a rack manufacturer who supplies companies in the United States, and has already landed two local supply contracts. The order size and clients were not disclosed.
The heavy-duty racking goes up to 36 feet and is able to hold up to 5,000 pounds of goods. The items are mainly used in the car parts business, food processing and hotel industries for more efficient use of floor space.
“We used to do this before and we would get orders from small companies, but the issue was really with pricing. We were bringing the products in from a company in the United States who was importing it from elsewhere and then reselling it here. Additionally, we had to go through a general racking person that dealt with local companies,” said Deputy Managing Director Allan McDaniel.
“What we were able to do is bypass that person and get significantly better pricing as distributor for Jamaica. Our aim is to take that distribution throughout the Caribbean,” he told the Financial Gleaner following the company’s annual general meeting on Tuesday.
He said SOS is now able to distribute and stock racks for 10 different companies.
The company is using newly developed space at Collins Green Avenue, Kingston, as showroom for the racks. The growing business may force SOS to seek additional property for warehousing space in as little as two years, McDaniel noted.
SOS posted profit of $134 million last year from revenue of $1.2 billion. However, so far this year, revenue and profit have been in decline.
At half-year, sales were down from $638 million to $472 million; while net profit was below $22 million versus $91 million at half-year 2019.
In the most recent quarter ending June, the company spun from a profit of $34 million to a loss of $22 million.
In response, the office supplier has been seeking out areas of opportunity, including the retrofitting of office spaces to conform to social-distancing protocols, the new rack contracts, and distribution of face shields. SOS has also been offering discounts to corporate customers for employees in need of office furniture to facilitate work-from-home arrangements.
As for book publishing subsidiary SEEK, McDaniel said that despite the delayed start to the school year, a peak season for booksellers that has been pushed back a month to October, the business has maintained sale levels.