8 months ago
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FosRich Company limited has struck $1-billion deal to acquire a business in Montego Bay, signalling the company’s readiness to start making a serious play for business as a hardware retailer.
The energy products trader and pipe manufacturer has bought out the former Bayside Supersaver Hardware “lock stock and barrel”, and will reopen the store under a new name in two weeks, said FosRich CEO Cecil Foster. The business, which sells an extensive range of hardware products, including cement, lumber, and steel, will continue to operate from its St Claver’s Avenue location in the resort city. It was owned by Irene Chin.
“We’ve totally taken over the space and we’ll be operating from that prime, central location under the FosRich brand,” Foster told the Financial Gleaner.
FosRich’s core business is retail sales of electrical products, energy products, including solar and battery storage lighting products, industrial products, including switchgear and electrical panels and hardware products. In 2019 a sixth product line was added when FosRich commenced operation in the manufacturing of polymerising vinyl chloride pipes, better known as PVC, as well as conduits for the domestic and export market. An associate company, Blue Emerald, produces industrial grade PVC pipes and fittings and refurbishes electrical transformers.
Hardware has been growing steadily as a line of revenue but had remained “a miniature part of FosRich’s business, which it wants to grow to the number one segment in another two years,” Foster said.
FosRich generated nearly $3.7 billion in record revenue for the financial year ended December 2023. This was 10 per cent more than the $3.37 billion generated for 2022. Net profit was $235 million compared to $325 million for 2022. The fall in profits was triggered by a 30 per cent spike in administrative and selling expenses, as well as a higher tax bill.
As a junior market company, FosRich initially received a full waiver on income taxes for five years, but now its second round of incentives provides for only a 50 per cent waiver over five years, which now sees it paying taxes at 12.5 per cent, starting December 2022. The shift saw its $1-million tax bill climbing to $42 million in 2013,
FosRich already operates six customer-facing branches: two in Montego Bay and one each in Mandeville, May Pen, Old Harbour and Kingston. Foster says the Cottage Road location in Montego Bay will be converted to a distribution hub for western Jamaica, while the Fairview location will continue to cater to a more “up-market lighting and household hardware clientèle,” he said.
By late April FosRich also expects to open its eighth customer location at the Drax Hall Commercial Centre in St Ann. The 4,000 square foot ‘boutique location’ will cater to both commercial and household clients, offering the full range of lighting, solar and electrical products.
The company distributes global brands Philips Lighting, Victron Energy, Siemens, NEXANS and General Electric. FosRich has also deepened its relationship with Chinese tech giant, Huawei, to supply solar power generation and energy storage systems including inverters, panels and now industrial grade lithium-ion batteries.
Foster says all those products will be on sale when the company starts moving into its supercentre location, which is now under construction at Molynes Road in Kingston. The five-level edifice will serve as a flagship location for the FosRich Group, he said.
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