Blue Power considers Cuba, VenezuelaThursday, September 01, 2016
BY KARENA BENNETT Business reporter firstname.lastname@example.org
Soap and lumber manufacturer, Blue Power Group, wants to expand its product offerings to Cuba and Venezuela, on completion of its $30-million upgrade in production facilities and warehouse space.
Chairman of the company Dr Dhiru Tanna reckons that the new markets — in addition to markets already captured — will boost export sales to roughly 25 per cent, up from the current 15 per cent of profits it currently accounts for, over the next five years.
Export sales for 2016 stood at $53.5 million, up $17.9 million or 50 per cent more than what the company posted a year earlier. Dr Tanna is optimistic that the sales will continue its upward trend as the company "does what it has been doing in the past".
In attempts to boost flat profits resulting from cheaper imports into Jamaica and reduced disposable income from key consumers, Blue Power has been aggressive in appointing distributors for potentially profitable markets.
The latest decision to include Cuba and Venezuela as part of its target markets comes as research shows that the countries are in short supply of most consumer items, providing an opportunity once the market opens up.
"Once we see that we have the capacity, following our expansion, to tap into more markets we will look into getting into Venezuela and Cuba, which could have huge potential for us," Dr Tanna said in a release from the company.
The $30-million upgrade will see the company reorganising its production facilities at Victoria Avenue in Kingston as well as the addition of an extra line for bathing soaps. A new warehouse space is to be added to a lot next door, and the company will streamline the production of its laundry soap line while adding two new wrapping machines.
Blue Power currently supplies several markets in the Caribbean as well as the US and the UK with its washing soap, Carbolic soap, Castile beauty soap, washing powder and the most recent additions — Castile mosquito repellent bath soap and laundry soap.
So far, Blue Power’s US Distributor, Iberia Foods, has secured shelf space for the company’s products, while Guyana’s distributor has exceeded expectation, according to Dr Tanna.
"Having started with just the blue laundry soap in Guyana, the distributor has expanded its offerings to Carbolic soap and hotel-sized soap. We continue to support the efforts at penetrating that market with promotions and advertising," the chairman said in the company’s annual report.
As for Barbados, export efforts in that market with a promotional offer are beginning to bear fruit after Blue Power cemented an order for a second container of products.
Blue Power’s financial year shows increased sales and improved profits despite a substantial tax liability of $9 million.
Overall sales for the 12 months saw a 15 per cent increase from $1,060 million last year to $1,216 million in the year under review with the Lumber Depot Division showing an increase of 17 per cent and the Blue Power division improving by 9 per cent.
Dr Tanna has credited the improvement in local sales with several initiatives including creative animated television advertisements, as well as new and better packaged products.