LASCO Distributors Limited (LASD) is acquiring a property neighbouring its pharmaceutical warehouse on Red Hills Road in Kingston, driven by an increasing need for storage space amid greater demand for its products.

The property acquisition is the latest in a series of actions taken by LASD and affiliated company Lasco Manufacturing Limited (LASM) within the past year, to keep up with double-digit growth in earnings the companies have experienced over the three-year period spanning 2020 to 2023.

Growth is down to single digits for LASD this year, based on data from its just-released annual report for the financial year ended March 2024. However, LASM’s earnings have stayed on track, posting year-on-year growth of 14 per cent to reach $2.3 billion. Meanwhile, LASD reported earnings of $1.45 billion, 6.9 per cent up on the $1.3 billion in profit it made the prior year.

Both organisations also reported year-on-year revenue growth, driven entirely by organic means.

“We changed the plans for Red Hills Road; we acquired a building that will provide us space for any overflow storage in the interim. It’s next door,” James Rawle, chairman of all three Lasco-affiliated companies – LASD, LASM, and the smallest of the three, Lasco Financial Services Limited.

Rawle told shareholders at the company’s last annual general meeting that LASD was exploring development works on existing lands at 27 Red Hills Road to accommodate a new warehouse for pharmaceutical products. Building designs were already approved.

However, the company was recently presented with a new opportunity.

“We are in the process of acquiring the new property. There is an existing building on that property and it’s about 14,000 square feet of storage, which is more than adequate for what we want,” Rawle said.

“We will still have to do some retrofitting given that the building will be used to store pharmaceutical products; there will be some specifications that we would still be required to meet. But, it’s not a big job and so the turnout time on that is expected to be short” he continued.

The cost to acquire the property was not disclosed since the deal is still being finalised.

Amid works to improve the storage space at the Red Hills location, the chairman said the companies have already gone through a third of the US$18-million budget allocated for expansion projects at LASD and LASM’s Whitemarl, St Catherine, operations.

LASD is adding 65,000 square feet or 50 per cent more warehouse space at White Marl. LASD, which is the largest revenue earner of the three affiliated companies, earns cash from being the exclusive distributor of products made by LASM. LASD is also the exclusive distributor in Jamaica for foreign brands such as Curves, FreeJoy, and SlimFast. Its business is separated into the nutrition, food, and beverage division; hygiene; and health care, which is managed by the pharmaceutical division.

Meanwhile, LASM is pumping about US$10 million ($1.55 billion) into floor expansion and the addition of new manufacturing lines to increase production capacity aimed at fulfilling demand in the local, regional, and international markets. The company is adding 75,000 square feet of space, which is set to increase the square feet of the plant to 515,000.

LASM is investing in equipment and technology to improve efficiency. But beyond that, the companies are preparing for product expansion, recognising room for growth both locally and internationally. The manufacturer of Lasco, iCool and Lyrix brands recently released new products, including three new flavours under the iCool brand: ginger lemonade, pink lemonade, and lemonade. Rawle promises there is more to come.

“We are in expansion mode and we are lining up for some additional investments. As you can see from our numbers we have been steadily improving, but there is still scope for expansion so we are extracting as much as we can from the present installation and planning further expansion,” Rawle said.

“We will stay in the food and beverage line in various formats,” he added.

In line with the expansion, the chairman said the companies will seek to employ additional staff. Combined, both LASD and LASM hire roughly 600 people.

“We are always in the market looking for people; in fact, one of the biggest challenges is to find talent. We spent a lot to upskill our technical people because we continuously upgrade our equipment.

“We are automating where we can, and we have to do that for our efficiency, but it’s a constant search for talent. It may not be in the form of a job fair, but we are constantly looking to hire and train people,” Rawle said.