FOSRICH Company Limited is looking to deepen its roots in the manufacturing sector with the company ready to expand into the production of industrial polyvinyl chloride (PVC) pipes as early as this month.
“Our plan for expanding in manufacturing is underway,” Cecil Foster, managing director of FosRich Company Limited, told the Jamaica Observer.
Foster said the company is now awaiting clearance to operate under the Special Economic Zone act.
“We are told we will get that approval in the next two weeks and when we get that, we will begin the manfacturing of industrial PVC pipes,” he added. The pipes to be manufactured range in size from two inches up to 12 inches.
“We are now developing relationships with a major player to distribute our [industrial PVC] pipes in Jamaica.”
Manufacturing is expected to start before the end of May. The Business Observer was told that staff and equipment are already in place awaiting the Jamaica Public Service (JPS) Company to connect the power supply to start the process.
Quizzed on the size of the market for PVC pipes in Jamaica, Foster estimated it to be $20 billion of which industrial PVC pipes used mainly in large infrastructure projects make up the lion’s share, costing about $100,000 for a 20-foot length.
However, industrial PVC pipes are not the only products FosRich is considering producing in the island.
“We are also seriously looking at the manufacture of transformer coils in Jamaica. Transformer coils are key to the operation of transformers and instead of us keep buying them from abroad, we are looking strongly to manufacturer them here and export to Canada,” Foster added.
He however said plans to enter the production of transformer coils are at an early stage. “That is something that could be tied down in the third or fourth quarter of this year.”
FosRich has been repairing transformers for JPS in recent years. Before that the JPS would import transformers to replace those that went bad. Foster said the transformer repairs business continue to be a strong performer.
FosRich first entered the manufacturing sector to diversify its income away from lighting and energy in 2019, moulding electrical PVC pipes and fittings.
Despite growing strongly since then, the company still depends on in-store sales for up to 60 per cent of its revenues.
Revenues topped $2.3 billion in 2021, up 24 per cent. The company’s sales saw growth in every parish except Portland where revenues declined by 12 per cent. St Elizabeth recorded the strongest growth in sales for Fosrich, up 47 per cent last year. Trelawny and St Thomas with sales growth of 38 per cent were next.
“I think when we decided to go public, we read into the market and saw that it was underserved and set targets to fill the gaps,” Foster said as he praised his team for delivering and shareholders for believing in the company. They will get an opportunity to participate in a rights issue and additional public offering that is to be approved by the shareholders at the annual general meeting in June along with a stocksplit.
Fosrich recorded growth in every year of the last five years, even in the midst of the novel coronavirus pandemic, with net profit up 59 per cent last year to $199 million.
Key to the company’s growth is also a swivel to the export market. FosRich now exports its electrical PVC pipes to Barbados.
“The electrical PVC pipe exportation to Barbados is continuing. We have a shipment getting ready to leave as we speak,” Foster outlined. He said the company is looking for new export markets for the line of electrical PVC pipes which are marketed under the Solid brand.
“We are talking with companies in the Cayman Islands and Guyana in a strong way and are hoping both will come to fruition in the next few months,” he noted.
He also said the company is now exporting Huawei solar inverters, a product carried among its inventory.
“We started exporting Huawei solar inverters to the Bahamas last month,” he disclosed.
FosRich is the regional distributor for Huawei solar inverters. It now has responsibility for Haiti, Turks and Caicos, Bahamas and two other Caribbean islands. “We are the gateway for Huawei solar inverter products going into those countries. Our responsibility is to be in the space in those countries and supply them so they dont have to worry about getting it from China. We are able to supply directly from the Huawei warehouse either in Panama or here in Jamaica,” he explained.
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