Wed | Dec 8, 2021

FosRich to wade into export market with PVC pipes

Published:Wednesday | May 5, 2021 | 12:05 AMNeville Graham - /Business Reporter
Cecil Foster, CEO of FosRich Company Limited.
Cecil Foster, CEO of FosRich Company Limited.

Aiming to sustain its momentum after record performance last year, electrical company FosRich is months away from entering the export market with PVC pipes that it will supply to construction markets in the region. FosRich, which began...

Aiming to sustain its momentum after record performance last year, electrical company FosRich is months away from entering the export market with PVC pipes that it will supply to construction markets in the region.

FosRich, which began manufacturing the pipes two years ago, expanded the plant in December, but wants to finalise market research before taking the plunge in supplying foreign markets.

“We’re doing all of the studies right now,” said CEO Cecil Foster. “Some things may break faster, but the target is by the latest March 2022,” he told the Financial Gleaner after the simultaneous release of the company’s audited annual report and first-quarter financials.

The new line, in which FosRich invested about $30 million, grew capacity by 25 per cent to around 16 million kilogrammes, volumes that exceed the current level of demand from the Jamaican market for FosRich’s pipes.

“The market is already taking all that we’re manufacturing. We’re in a position to ramp up production some more, so the next move is exports,” Foster added.

FosRich is currently the only company manufacturing PVC pipes in Jamaica. It jumped into the market after determining it could produce the material about one-third cheaper than imports that the construction sector was entirely reliant on.

PVC was previously produced in Jamaica by ThermoPlastics and later Omni Industries.

“We were in the market and we saw that everybody was using PVC, yet no one had produced it for the last 10-15 years. That for us was an opening because, when we looked at the numbers, we could save 32 per cent on importation costs by making it locally,” Foster said.

The company awaits the finalisation of contracts later this year to estimate the expected impact on group revenue.

The electrical company has grown both sales and profit consistently since its market début at the end of 2017, and the pandemic did nothing to change its trajectory.

FosRich Company Limited closed 2020 with revenues of $1.9 billion, the highest since its market début in 2017. After-tax profit was also at a high of $126 million. The earnings momentum was maintained during the first quarter ending March 2021, with revenue up 22 per cent to $549 million share, while profit increased eightfold to $38 million, or from one cent per share to eight cents per share.

The company is in the business of manufacturing pipes, repairing transformers, and distributing electrical devices, hardware items and solar equipment, from locations in Kingston, Clarendon, Manchester and St James.

“The PVC and hardware lines were our biggest performers. They were among the seven that grew, the other four were just about flat but none under,” Foster said.

FosRich has been in business for 26 years, since 1995. Its plan to sell PVC to regional customers will mark its first foray into markets beyond its home base, with its own product. The company is otherwise considering supplying the FusionSolar photovoltaic equipment it currently distributes for Chinese tech company Huawei in Jamaica, to regional clients.

“Yes, we are working on the PV equipment sales at the same time. There are indications there that we may even make those first deliveries before the pipes,” Foster said.

neville.graham@gleanerjm.com