Lasco Manufacturing pauses product launch due to pandemic disruptions
Lasco Manufacturing Limited, LASM, has developed a new line of products that it will first offer to the local consumer market before seeking sales overseas. But the products may not hit supermarket shelves anytime soon, at least not until a greater level of normality returns to business amid the pandemic.
The roll-out of new products is just one way in which the manufacturer, which is the second-largest revenue generator of the three-pronged Lasco affiliated companies, is looking to improve its year-on-year performance. The broader plan includes acquisitions and strategic partnerships, entry into new export markets, and the automation of plant and processes to lower costs.
Lasco Manufacturing has been making slow but steady progress on identifying brands or products compatible with Lasco’s powdered goods and the iCool beverage food lines for acquisition or strategic partnerships. The company has also pumped some US$75 million of investment into equipment and technologies for the past decade to slash costs and improve efficiencies. Investment in technologies continues, Managing Director James Rawle said, with specific manufacturing processes targeted for the 2021 financial year.
As for the launch of new products, consumer buying patterns have changed over the past 18 months due to the pandemic, Rawle said, including the frequency of shopping, what consumers buy, and the shopping budget. As such, he said LASM would be treading cautiously on the roll-out of any new products.
“We are going to be launching new products, but the environment has to be right for it. We are still in the COVID era and we have to be careful how we do that,” Rawle told the Financial Gleaner, following the company’s annual general meeting on Wednesday.
The new products will be a mix of dry goods and beverages, he added.
For the year ended March 2021, Lasco Manufacturing grew earnings 41 per cent to $1.37 billion, on revenues that rose marginally to $8.2 billion.
A review of the first quarter ending June 2021, showed that LASM earnings jumped 18 per cent to $401.7 million, on revenues which grew 26 per cent to $2.3 billion. Gross profit margin for the quarter was 36 per cent, compared to 39 per cent in the previous period, the decline largely due to higher raw material and shipping costs, the company said.
“Whatever new products we launch should give us better margins, it shouldn’t dilute it. We are also looking to see what other products we can acquire to improve the business overall,” Rawle said.
LASM’s locally manufactured products compete in the food, personal care and home care market segments. Some 90 per cent of the company’s revenue is made in Jamaica. It’s trying to grow exports and is actively seeking markets in Latin American, particularly Venezuela and Colombia.
“Typically, we launch products in the local market first, get the learnings from it, and thereafter push the products in the export markets. The same strategy will be used for the new products,” Rawle said.