Lasco Manufacturing Ltd (LASM) indicated Monday that it expects to see savings from its recent assignment of sister company Lasco Distribution Limited (LASD) with the responsibility for export distribution.

Last week, LASM announced the appointment of LASD as the exclusive distributor for the export market to take effect on April 1, 2016. All export sales will be transacted by the associate company which is expected to drive growth of all LASM`s brands in the overseas market.

The Lasco-affiliated group of companies includes Lasco Distributors Ltd (founded in 1988), Lasco Manufacturing Ltd (1994) and Lasco Financial Services (2004). All three companies were listed on the Jamaica Stock Exchange (JSE) in October 2010.

Robert Parkins, managing director of LASCO Manufacturing Ltd, told the

Jamaica Observer that the key benefits of the new business model include greater efficiencies in the supply chain and marketing activities.

“There will be economies of scale in ordering and planning and marketing expertise; and a simpler and leaner supply chain having one distributor servicing both markets – both local and export,” Parkins said.

LASM will apparently dispose of its sales and marketing division, whether by merger with LASD or other means. The managing director referred to “one sales and marketing team”, with “greater synergies in marketing activities”.

For the three months ended December 31, 2015, LASM cited operating expenses which rose by $312.8 million or 82 per cent over the prior year’s $383.1 million to $696.0 million due to reasons including higher marketing expenses.

Net profit for the company for the period was $763.5 million compared to $426.3 million for the same period in 2014, an increase of $337.2 million or 79 per cent. Earnings from exports were not disclosed.

Parkins said that LASM will now benefit from “a new focus on the manufacturing of high-quality, good value products and product innovation, while LASD can focus on their expertise in sales, marketing and distribution”.

Parkins said Lasco Manufacturing’s main export markets are Caricom, USA, Canada and UK. “Lasco Food Drink and Lasco LaSoy soy beverage products are our key products that we currently export. These brands are the greater share of the export sales,” he noted.