PARAMOUNT Trading (Jamaica) has set its sights on an aggressive target of quadrupling both its revenues and profits by 2027 as it builds out its manufacturing arm to satisfy demand for its products in the local and export markets.

Hugh Graham, CEO of Paramount Trading, outlined that the target is part of the company’s four-year plan.

“We have an objective to quadruple the company in four years, that’s the goal,” Graham told the Jamaica Observer in an interview. He later clarified that the targets for quadrupling are both revenues and profits. Paramount Trading’s revenues in the prior five years to 2022 rose 23 per cent to $1.7 billion while its profit tripled to $174 million. It’s latest financial statements show $1.6 billion in revenues earned over the first nine months of its current financial year which is on track to surpassing $2 billion by the end of the financial year. Its profits which were just under $180 million in the same period is expected to exceed the $200-million mark by the end the current financial year. Paramount Trading’s financial year ends on May 31 and begins June 1. Quadrupling revenues would mean the company’s sales in 2027 will be around $8 billion while its profits would reach above $800 million.

“If you think about it, what we are doing in manufacturing now is peanuts,” Graham continued in clear reference to the fact that at $197 million in sales last year, manufacturing contributed just 11 per cent of the $1.7 billion total.

Paramount currently manufactures cleaning and sanitation chemicals, lubricants and baking powder. It also imports a range of industrial chemicals and deals chiefly as a business-to-business manufacturer and distributor.

“In terms of the buildout, the lubrication would be the biggest opportunity now that we have for growth,” Graham pointed out. Lubricant sales for motor vehicles and industrial equipment in 2022 accounted for 10 per cent of total sales for Paramount. However, Graham is convinced the lubricant business alone will help in achieving the target of quadrupling revenues and profits in four years.

“When you talk about lubricants, the importation of lubricants from the US alone costs in the region of US$110 million. And that’s just from the US and doesn’t count imports from the rest of the world,” he said.

“The market is there, and so that is where Paramount will look to focus in the next few years.” He said Paramount is aiming to replace “at least 50 per cent of imports. That’s where the growth opportunity is”. With US$50 million in sales, the lubricants plant alone would bring in an extra $7.7 billion, which is roughly four times Paramount’s sales in 2022.

Still, his eyes are not set only on the Jamaican market for lubricants. “We have the possibilities of exporting [as well] because there have been enquiries,” he told the Business Observer.

“I just made a trip to Guyana three weeks ago and even though some people were saying I was late to the party, I didn’t find that in my own interactions with potential customers in Guyana.” Those customers are set to visit the Paramount lubricant plant on Waltham Park Road in St Andrew this week and Graham believes with the level of interest shown so far in his products “before the end of the year we should start exporting to Guyana.” He, however, said the company is not only looking at Guyana but “they are the closest to ink a deal with” among potential long-term regular exports. It now does spot exports to other countries but the quantities “are minimal”.

However, he said there are other opportunities in the chemical business which will also drive growth as it spends $1 billion building out its manufacturing capabilities. The company breaks out its revenue streams into five areas: chemicals, construction, manufacturing, lubricants and transport.

The company built its lubricating plant five years ago at a cost of $600 million. However, before it could get down to serious production, the COVID pandemic shuttered the economy and reduced demand for its products. Graham said the company was forced to pivot during that time to use the filling plants to bottle bleach, detergents, hand soaps, dishwashing liquids, anti-bacterial soaps and sanitisers which were growing in demand at the time.

“During the heavy lockdown the packaging of one million litres of alcohol that Wray & Nephew donated to the Government was packaged by Paramount,” he acknowledged. Graham said his chemicals were also instrumental in getting bars reopened.

“COVID helped to fast-track the production at the plant,” he noted.

However, with demand for the cleaning and sanitation products falling 60 per cent since its peak at the height of the pandemic with imports flooding the market again, Paramount is once again pivoting.

“You may here me say we want to grow revenues four times and think it’s an audacious goal, but it’s not. It’s just a goal. Last year we had about 10 new hotels, where are they getting their supplies from?” he asked as he indicated one avenue of increased focus from the company. “Our visitor numbers are up and they have to eat food. The linen they sleep on has to be cleaned. The pool has to be cleaned more often as well. So the opportunities are there [to grow] and it’s not even challenging to get to that.”

Graham added that all his major customers, entities such as Seprod, Red Stripe, Caribbean Broilers and Wray & Nephew are expanding and he expects their increased activities to result in greater demand for the chemicals his company produces and distributes.

“A rising tide raises all ships,” he pointed out. He said opportunities from current partners alone will drive growth. As for the manufacturing of cleaning and sanitation chemicals, Graham said the area “still provides growth opportunities because companies are still asking us to package sanitisers for them. Some are launching new brands or changing the manufacturer of their brand.”

“Our objective is to provide local solutions which people can turn to instead of importing. So a company that would have its brand made outside of Jamaica, we will be approaching them to have the brands made here.” Paramount now does white-labelling with bleach producing the Vitex brand on behalf of Seprod and Cari-Med has also reached out to the company to produce a line of sanitation chemicals for it.

Adjoining the lubricant plant is another production facility in which various grades of baking powder are produced. Graham is also going for growth with that product.

“When you look at all the hotels that are coming and with the mega supermarket chains having a baking department. All of them do cakes and bread and all of that, so that side of the industry is growing outside of the traditional bakeries. Also in the hotels they do their own baking, so that’s a whole market to go after.”

He said the company is also looking at a digitisation strategy which will propel it into the e-commerce space where its customers can order products and even watch live streams of production and packaging if they desire.

“Our digital footprint should be at least 35 per cent of what we do to get to that objective [of quadrupling revenues and profits].” A drive is also being made to leverage its transport equipment as a separate business unit offering haulage services to companies.

“What we need to deliver on that is the human resources and we have made some strategic internal moves to do that.” Graham said the change includes hiring a chief financial officer who will also oversee the company’s digital strategy.