THE Tank-Weld Group has deepened investments in its logistics operations, building out a new 200,000-square-foot warehouse to improve its efficiencies which is allowing it to turn attention to expanding the range of products it now manufactures.
The new warehouse space, located at Ferry Pen, Six Miles in St Andrew, is in the final stages of preparation for commissioning later this month.
"It's going to significantly improve our efficiency to our customers, particularly along the southern belt from Savanna-la-mar [in Westmoreland] to Morant Bay [St Thomas]," Chris Bicknell, chairman and CEO of the Tank Weld Group, told the Jamaica Observer in a tour of the facility last week.
The distance the new warehouse will serve encompasses all Jamaica's southern parishes, and covers more than 250 kilometres. Bicknell said it was built at a cost of almost US$20 million.
"It's going to be the Kingston hub for all our building materials distribution," the Tank-Weld boss continued, adding that it will complement the logistics operation for the northern parishes which is handled from two locations — one at Tank-Weld's port in Rio Bueno, Trelawny and another in Montego Bay, St James.
Distribution for the southern parishes is currently handled from the Seaward Drive, St Andrew, head office where it juggles for space with walk-in customers, a situation Bicknell says creates bottlenecks in the company's operation.
"The two things were causing a lot of congestion, so this [new warehouse] frees up everything."
He said when the distribution operation for the southern parishes is relocated to nearby Ferry Pen, the current Seaward Drive location will be transformed to make it more friendly for walk-in customers while remaining as the headquarters for the Tank-Weld Group.
Before the new warehouse was built, Tank-Weld operated 400,000 square feet of space in the capital between Seaward Drive and Spanish Town Road. With the addition, it now has 600,000 square feet of space in Kingston. On the north coast between Rio Bueno and Montego Bay, the company has another 600,000 square feet of space. In total, when the new Ferry Pen distribution centre is open at the end of January, Tank-Weld will operate from 1.2 million square feet of space at five locations. Rio Bueno, where the port is, is the largest location with 500,000 square feet of space.
"The reason we have survived and remained successful so far is because we have been able to maintain razor-sharp efficiency at every step of the supply chain and you have to, because if you don't maintain razor-sharp efficiency at every stage of the supply chain, you won't survive in this industry, because remember we are just a small country," Bicknell observed as part of the reason why the company had to build out new warehouse space for its operations.
He said part of that is building out relationships as well, which the company has been doing with its partners for the past 30 years including maintaining a good credit rating which enables it to get products without questions.
The next step is the shipping logistics. "We have to induce large vessels to stop in Jamaica and to do that you need large volumes. [Luckily,] we've been able to achieve volume and critical mass with the shipping people to make a stop in Jamaica. We have also invested heavily in our port which is specifically designed for break bulk facility for Jamaica."
"Having designed and invested heavily in a very efficient break bulk facility that has improved and helped our efficiency level at that stage of the supply chain, we had to make the heavy investment in warehousing to ensure goods are stored under cover," he added.
"On top of that, we wanted to ensure our warehouses are not the normal warehouses with forklifts all over the place. We have no forklifts in the warehouses. Its all mechanised with overhead cranes which moves cargos. It improves efficiencies, it reduces damages and it is safer. "
The buildout of its newest warehouse in Ferry Pen comes six years after Tank-Weld started to construct similar facilities in the area which it rents to various companies.
The lands on which they are built is part of some 60 acres of "dump land" at Ferry Pen which Bicknell said Tank-Weld acquired 20 years ago, with a vision to transforming it into "the largest warehousing district in Jamaica".
"There is 500,000 square foot [of warehouse space] here, all rented," Bicknell told the Business Observer. Clients include Wisynco, Wray & Nephew, Derrimon Trading, Lanco Paints, Label Craft — a Barbados company that prints labels for companies across the region, Creative Distributors — a tile company — and others.
The Tank-Weld boss said the company quietly went about building the facilities, testing the readiness of the market for his vision of creating a new warehouse district with the first building, a 60,000-square-foot structure in 2016, which, to his surprise, was rented before construction was completed.
"I thought I was going to get a lot of small companies, but what I got was large companies," he said.
"I knew one day this would be a breakthrough in warehousing. That was the plan I had here for this land, to be an industrial warehousing complex for Kingston, because as you know, Kingston is jammed up and there is no space. Here you are right at the outskirts of Kingston, just a few miles from the port and you can jump on [modern] highways and go west or north," he pointed out in reference to the opening of the Edward Seaga Highway which runs north to south and the PJ Patterson Highway which runs east to west, both which are roughly within a mile of each other off the recently upgraded Mandela Highway.
So far, Tank-Weld Group, through its Tank-Weld Steel Fabrication subsidiary — the construction arm of the group — has built out six warehouses in the area, two of which it will use for itself while renting out the others to various companies. Plans are already drawn for a seventh warehouse with 200,000 square feet of space. Construction on the seventh warehouse is scheduled to start later this year on 10 acres of land.
Tank-Weld builds its own warehouses, having been doing so across the island for the past 50 years. The company has done several in the last few years including the Wisynco warehouse at Lakes Pen, the GraceKennedy warehouse at Bernard Lodge and the nearby Cari-Med warehouse also in Bernard Lodge, all in St Catherine as well as the new Derrimon Trading headquarters on Marcus Garvey Drive, St Andrew.
Bicknell said Tank-Weld's new distribution hub at Ferry Pen will not only free up space at its Seaward Drive location, but also at its Spanish Town Road location where it has been manufacturing for the past 15 years. Products coming out of its factory include "many profiles of roofing, purlins, nails, fabric mesh, expanded metal, chainlink fence, track and studs." The total area of the Spanish Town Road location is about 200,000 square feet, but roughly half of the space is used for storing building materials. The rest is taken up by machines which churn out the various items the company produces.
"What you are seeing here is overflowing stock," Bicknell said as he pointed to the building materials which are being stored in a large section of the manufacturing plant.
"We ran out of space at Seaward Drive and was just trying to hold products wherever space can be found. But having now completed the distribution centre at Ferry Pen, we can turn to manufacturing."
The plan is to relocate the building materials to the Ferry Pen warehouse and expand the range of products that are manufactured by Tank-Weld.
"We are adding new lines," Bicknell said, but declined to say what new products the company will be manufacturing. He however said four new products will be added to the line the company now produces.
"What I will do is share that information with you when the equipment arrive in Jamaica. But we have already placed the orders for the machines that will be used in manufacturing and they will be arriving later this year."
He said with the expansion into manufacturing, the company will also go after the export market more aggressively.