Tropical Battery Company Limited said it is expecting its recently acquired US-based Rose Batteries subsidiary will be the main driver for its growth during 2025, adding that it will focus on growing the company’s market share globally before targeting another acquisition in 2026 of “one of our competitors.”

Rose Batteries, a San Jose, California-based producer of hi-tech battery packs and chargers, was acquired in January 2024 for about US$20 million. The company produces battery solutions for a number of industries including telecommunications, robotics, medical devices, and smart grids from two facilities, one in the US and the other in Mexico. A release from the company said it serves 200 customers in 30 countries across the Caribbean, Africa, the Middle East, Oceania, Asia, Europe, South America, and North America.

“Rose is a 60-year-old company…and they probably have about 5 per cent market share, so we have plenty of room to grow,” Alexander Melville, CEO of Tropical Battery, told the Jamaica Observer in an interview Friday. He added that the focus on growing market share for Rose Batteries’ hi-tech specialty batteries will be crucial to Tropical Battery’s plan to depend on organic growth to boost revenues and profits in 2025.

“It’s a very big market and that is one of the other reason why we bought it, this is such a large market, this specialty battery space. Everybody needs the energy and it is not always available and so you have to store it and bring it,” Melville said of the potential to grow its market share from 5 per cent for batteries used to power specialty equipment.

“We are hiring some more staff…and we are improving our processes and sales team, redoing our website and go to market strategy,” he continued as he gave a peak into strategies the company will employ to get more business. An indication from a release suggests that the robotics and medical devices markets will be keenly targeted with the company seeking business to build more of the batteries for the equipment.

“The robotics sector, growing at a 26 per cent compound annual growth rate (CAGR), and the medical device market, forecast to grow at an 8.2 per cent CAGR, offer promising opportunities for Rose to secure long-term contracts with original equipment manufacturers (OEMs). This diversification allows Rose to reduce reliance on a limited customer base, while Tropical can benefit from stable, high-margin revenue streams across these burgeoning markets and earning US dollars,” the release stated.

Melville for his part told the Business Observer that that will be the focus for Rose Batteries in 2025 “and then in 2026 we will probably look at another acquisition of one of our competitors and kind of merge them into us in California and that I think will give us significant growth over the following two to three years.”

He said discussions surrounding that acquisition in California is at a preliminary stage and expressed optimism “we are hoping to do one in Jamaica” also, but not before 2026.

Apart from Rose Batteries which it owns entirely after its January 2024 acquisition of the entity, Tropical Battery also owns 51 per cent of the Dominican Republic-based Kaya Energy. The stake was acquired in 2023.

The company is already starting to realise the benefits of the acquisitions. During the third quarter of 2024 — for Tropical Battery that corresponds to the period running from April 1, 2024 to June 30, 2024 — the company reported gross operating revenues of $1.9 billion, up from $728.8 million a year earlier, representing a 143.6 per cent increase year-over-year. Its three month earning were almost equal to the $2.1 billion it earned over the first nine months of its previous 2022 to 2023 financial year.

“This growth is primarily attributed to the 100 per cent acquisition of Rose Batteries in San Jose, California, and the 51 per cent acquisition of Kaya Energy in the Dominican Republic,” Tropical Battery said in its interim financials to shareholders published on August 7 this year. Further details on the impact of the subsidiaries on Tropical Battery’s bottomline were expected at the end of November, but days ahead of that deadline the company notified the stock exchange that its audited financial statements will be late “due to the late receipt of essential third-party documents required for an accurate and compliant audit.” However, referring to publicly available information so far, he said “sales are tracking up 100 per cent on last year.” The hope is that the full financials will be released by December 30.

But the publication of the financials and a push to realise the potential for growing Rose Batteries aside, Melville said in 2025, he will also focus on consolidating the three brands which now make up his burgeoning Tropical Battery group of companies. It’s Kaya Energy subsidiary, he pointed out, “has been very important for us and has helped us even here in Jamaica to win projects because the team in Dominican Republic in Kaya, they have 14 years experience in the solar business and they have helped us to win solar projects in Jamaica, large solar projects, US$2 million and US$3 million solar projects, so we didn’t have that expertise in house and now we do with the acquisition of Kaya.”

Melville outlined to the Business Observer that he went after acquiring 100 per cent of Rose Batteries and the majority stake in Kaya Energy to help Tropical Battery’s future growth because “it’s very hard for us to grow more in the battery space in Jamaica,” after 75 years in a market in which it holds a “60 per cent to 65 per cent market share” for the estimated 300,000 motor car and truck batteries that are sold in Jamaica each year. The market is estimated to be valued at $3.5 billion.

“So we have to do different products. So we have gone into solar here, and that’s a big growing area for us here in Jamaica. And then we decided to go into Dominican Republic in 2023, and that’s a bigger market.”

The rationale for acquiring Rose Batteries was “We like to grow into larger markets….so the US ticks that box. It’s a much larger market. The second criteria is that it is in the battery space. So they make batteries, different types of batteries for different technologies, more like a smart battery pack that comes with a computer chip board on the batteries. It really is a more clean battery tech compared to the traditional lead acid batteries that goes into cars and stuff like that,” he said adding that the business was also profitable.

“Rose Batteries strengthens our position in the energy storage market,” Melville said. “Their innovation in battery technologies, paired with our established distribution network, positions us to meet the rising demand for sustainable, high-performance energy solutions worldwide.”

“We’re seeing rapid growth in the global energy storage market,” Melville added. “By combining the strengths of Rose Batteries and Kaya Energy, Tropical is uniquely positioned to deliver comprehensive, sustainable energy solutions to a diverse range of industries, from residential and commercial to utility-scale energy storage,” he pointed out.

In addition to leveraging its technological capabilities, Tropical Battery said it is also targeting emerging markets, particularly in Southeast Asia, Latin America, and Africa, where the demand for renewable energy and energy storage is growing rapidly. The regions, it pointed out, face challenges like unreliable grid infrastructure and increasing demand for renewable energy integration.

Tropical Battery has been seeing strong growth in the last few years since listing on the Junior Market of the Jamaica Stock Exchange (JSE) in 2020. At that time, its revenues were $1.9 billion but reached $5.6 billion this year. It is moving to the Main Market of the JSE either by the end of this year or very early in the new year and an opportunity, Melville said, that will open it “to more liquidity and larger investors look at you like pension funds who are buying for the long term.”

He said more earnings will allow the company to fulfil its chosen corporate social responsibility projects.

“We focus a lot on education and the environment so we clean up all the old batteries and export the scrap. The more profitable we are, the more we can give away money to the things that are important to us which is education and the environment.”