BLUE Power Group, which exports soaps to the diaspora, says it is having difficulty selling in local supermarkets.

Major supermarkets offer 52 brands of soaps, 90 per cent of which are imported, Blue Power Executive Chairman Dhiru Tanna said on Monday at the company’s annual general meeting held in Kingston.

“We are trying to slowly inch into that market but a major difficulty is trying to get shelf space,” he said.

The local manufacturer distributes its products to wholesalers and cart vendors in downtown Kingston. This increases demand for the product, which subsequently results in exports to the diaspora.

“So we end up creating a market abroad and then the [local] supermarket comes second,” he said. “Ninety per cent of the bathing soaps in Jamaica are imported, and it’s been very difficult to get a foothold in the market, which we have done, but we have been very lucky but also very nimble by watching our expenses.”

The Business Observer had earlier reported that Blue Power plans to add three new soaps to its product line. It currently manufactures 10 different bars of Castile soap. Also, it makes soap for AriLabs, GraceKennedy, and Lasco.

The new soaps will better compete against “cheap” imports from Asia that offer greater fragrance varieties, Tanna said. These soaps, particularly those from Malaysia and Indonesia, are also selling at similar prices which keep profit margins low at Blue Power.

“I can’t raise the prices because [people] will buy the imports,” he told shareholders. “We suspect that some of these soaps are not paying taxes because they match our price.”

The company will also modernise its packaging in an attempt to appeal to wider consumers.

“Sometimes the packaging affects the purchase. One, to make it look more attractive and second, to avoid adding labels to the products… it would look better on the vendor’s cart,” he said.

The company made $29 million net profit during the July quarter, compared to $30 million a year earlier, but blamed the slight drop in revenue on its Lumber Depot, which earned $6 million profit or $18 million lower than year-earlier levels.

The reduction, the company said, was due to the expected discontinuation of contracts to supply Government with materials on behalf of organisations located overseas.

Blue Power Group hopes that the income from its new soaps will offset the taxes it will pay next year.

“We have to make more money,” he said of the company which will start paying a 12.5 per cent tax rate starting the end of April 2015.

“If we make, say $100 million, then the tax bite would be $12 million. But this is part of what [management] is trying to do. To get more sales from the same store rather than build a new store and using technology. At the same time, we are launching new products… so more pharmaceuticals and a new Castile soap range called the Tropical Fragrances,” he told shareholders at the meeting held at the Guardsman group headquarters owned by director Kenny Benjamin.

The company received a 10-year tax holiday as a consequence of listing on the Junior Market of the Jamaica Stock Exchange in April 2010. The first five years ending April 2015 offer a full tax break with subsequent years offering a tax rate equivalent to half the going tax rate.