Starting a business is easy, but it takes a dream and endurance to make it a successful enterprise. When the financial sector collapsed in the 1990s, the entrepeneurial spirit took a hit. Building a business within the last 30 years in Jamaica is no easy feat and special commendation must be made to those who stuck to their goal and made it work. This week in this series of Corporate Profile, we tell the story of FosRich Company Limited, a manufacturing and distribution entity run by an enduring entrepreneur, Cecil Foster.
Jamaica faced a variety of events in 1993 which continued to test the strength of the independent nation we call home. Inflation remained in the double digits at 30.1 per cent, the country experienced a 5.4-magnitude earthquake and heavy flooding. During that year, the Jamaica Stock Exchange (JSE) crashed at the same time the insurance sector was facing a liquidity crisis. In that year also, electorates returned the incumbent political party to office amid the instability.
However, that year marked two significant events which would forever change the face of Jamaica. The first was the founding of this publication by founder Gordon “Butch” Stewart who was recognised for his contributions to tourism and initiatives to defend the Jamaican dollar. The second major event was the birth of FosRich Company Limited by Cecil and Marion Foster. FosRich is the combination of Cecil’s last name and Marion’s maiden name, Richards.
The upstart salesman sold electrical products for different hardware companies where he learned his customer’s needs and wants along with the craft of the trade. This provided him with the vision of wanting to start a business in the electrical sales field which would benefit not only his customers, but the nation as well.
Foster started the company in his small studio apartment and rented a small 20ft by 10ft room at the back of a hardware to store goods.
“I would take orders when people called me and take the goods to all parts of the country. I would be delivering to Port Antonio and get there by 9 o’clock. I would be delivering to Negril and get there similar by 9’o clock because I would just jump in my van and deliver. That was how hard a job it was and at the time, there was a shortage of US dollars, the economic meltdown and goods were very short. You could just not determine what the price of a popular item would be,” said Foster as he reminisced about the beginnings of his business during one of Jamaica’s most difficult periods as an independent nation.
Unlike the present where the country has highways to cut the journey time going west, Foster had to spend more than seven hours at times driving just to build out his client base and ensure he could keep costs low. The dedication put out by Foster saw the founder forego a salary for a decade until he thought the company was in the right place to pay him for all the blood, sweat and tears he put out to get it going. He made sure his rent was paid and had food to eat during those years.
While the business was growing, Foster began to encounter new hurdles towards the growth of FosRich. One such issue was with the case of receivables from his clients who dragged out the payment cycle with him.
“People were not willing to pay me fast enough, so receivables were of concern. A lot of people would use the opportunity to tie me out as they know you’re a young man starting out and you are probably afraid to collect from them. So, it was a very tough time,” Foster explained.
This was compounded by the issue of purchasing the property on 79 Molynes Road whose denizen didn’t want to leave the space. He took Foster to court every month for over a year causing the original plans of expanding the offerings from the young business to be delayed. Though he eventually won the case, Foster faced another hurdle as he sought to acquire the property next door at 77 Molynes Road. While the owner agreed to sell, she doubled the price on him which he contended he couldn’t afford. The property was advertised for sale in the newspaper before it was taken off the market and sold to FosRich.
“She said you’ve been such a good neighbour. I should not have done this to you, and she sold it to me for less than what it was valued. We now have the two properties brought together as one and there’s where we built on both properties our current head office. We continued to buy goods from local suppliers and we started to store the goods in the rooms we had here in this place at 79 Molynes Road. I would then take the goods to the country. I’d leave at 10 o’clock in the night and come back by four in the morning loading up my vehicle to go to the country. That was for the first 15 years and it was a lot of work. I never saw it as a problem as I know what was required and I did it with real joy,” Foster recalled in the interview for this article with the Jamaica Observer.
The years of hard work began to manifest itself later on when various international companies approached FosRich to do projects in the country. These included Dutch electronic giant Philips, German-based Siemens and US-based General Electric who all heard about the company’s way of doing business and attitude towards getting the job done. This led to the company being part of the team which designed and installed the flood lighting for Sabina Park.
“They said they were looking for a partnership. They had gone to three other companies in the electrical field and they wanted to talk to me. Based on what they saw in the market, FosRich was the only company that fit their business model. From that meeting, Siemens spoke to them two to three years afterwards and said who is your partner in Jamaica and they said FosRich,” Foster detailed.
FosRich was bootstrapped from the beginning which saw Foster putting everything into the business which included mortgaging the family home to ensure the business was always on a good footing. This demonstrated the grit and determination of the founder as interest rates remained in the double digit range after the meltdown of the financial sector in the 1990s.
When he eventually planned the company’s initial public offering (IPO) in December 2017, Foster had no concept as to the company’s valuation due to his focus on the business. The offer was oversubscribed by 50 per cent with FosRich raising $200.91 million and becoming the 32nd company on the JSE’s Junior Market. The company’s current market capitalisation stands at $15.32 billion with more than 2,000 shareholders who have held from $2 when it listed to $30.50 today.
“I was never valuing the company at all. When the company was valued at more than $1 billion when we went to the market, I never knew as that was not my interest. My interest was just to find solutions for the market and keep pushing as God did the rest,” said the man who doesn’t separate business from his personal life, but reserves the Sabbath day for worship.
Since starting the company in 1993 with three employees, FosRich boasts a team of 165 employees at the end of 2021. The company serves every parish in Jamaica and has five retail outlets spread between St Andrew, Manchester and St James. The company grossed $2.35 billion in revenue and $199.31 million in net profit. Foster has set an ambitious target to grow the company’s top line by more than 80 per cent in 2022 through the PVC and electrical transformer business. FosRich is already 21 per cent along the way with net profit in the first quarter at $158.89 million.
While Foster is grateful for the company’s board of directors and team members, some having served for more than 20 years, he is most thankful for the support of his wife Marion. She serves as the chairman of the company which makes her Cecil’s boss. Apart from joining the company in 1996, she completed a management studies degree to complement the operations of the business.
“She has played a tremendous role. The Scotiabank at Cross Roads did not see me for 10 years. Nobody knew me, they only knew her. Two of the managers came to visit me and when they were leaving, they wanted to know if I was a phantom. She dealt with things quietly and precisely. She has always been an excellent person to work with in all aspects of the business. She’s one of the real reasons FosRich has grown because of the support she has given all throughout my life. There’s nothing that can exceed a supportive partner,” Foster proudly expressed about his wife.
While the world continues to navigate its way through supply chain disruptions, FosRich will be manufacturing PVC pipes for the domestic and export markets plus repairing transformers for the Jamaica Public Service Company Limited through its associate Blue Emerald Limited. This represents the company’s drive to not only support Jamaica but transform the markets it serves. The company was the first to introduce LED lights to Jamaica along with XPLE cables. While resistance was high for some of these products, the confidence of Alcan in the XPLE cables saw FosRich dominate a market when the competition lagged to source the product.
“We’re pretty buoyant about the fortunes of FosRich going forward. We are not going to give up and a pinnacle to reach if we keep doing the right thing with the right team members and growing through the right solutions for the market. We have to prove the business first as it’s not just about changing the market, but it’s to see where the niche is and where people are not willing to go. We are seeing the projections and what is going to happen because we’re now going to be rolling out the industrial pipes and already have requests which will make us do over half a billion dollars. We’re above target but see some opportunities in the market and need to take those opportunities,” Foster said about the company which will be returning to the public equity markets shortly.
While FosRich looks to achieve new heights every year, Foster continues to invest in his staff members. Apart from the company’s corporate university to enrich the staff through knowledge, they have also partnered with a Canadian company to send staff members up north to be trained into making coils for transformers.
“Never go into business to make money as your first point. Go into business to solve problems and find solutions. When you do that, you develop the skills to make sure that every solution you find, you make sure that there is a bottom line that comes to you. If you go into it for money, you’re going to be disappointed. Go into it because you want to find solutions and you want to give value to the people you’re trying to serve. They will see how genuine you are and people will want to do business with you. Give it your best shot,” Foster said as his words of advice to aspiring entrepreneurs.