6 months ago
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Lighting and manufacturing company FosRich is aiming for five times greater revenue in three years.
By the end of 2027, the company should have reached $22 billion in annual revenue, said CEO Cecil Foster, an effort the company has dubbed ‘Pinnacle 2027’.
Its turnover in 2023 was $3.7 billion, reflecting growth of 10 per cent. However, the early start to 2024, January to March, began with a downswing in both profit, which fell to around a quarter of year-prior levels, and sales, which skidded by 20 per cent.
Reporting to shareholders at FosRich Company Limited’s annual general meeting on Tuesday, Foster said after a period of deep investments over the past two to three years, the company had set the ambitious target based 0n the revenue potential and early performance of the endeavours at expansion and diversification..
Speaking to the Financial Gleaner after the meeting, Foster said to meet the target, the company will follow three tracks.
One of the initiatives involves expansion of the range of PVC pipes and other plastic products it manufactures, a project now in its early stages. FosRich manufactures PVC products at its Maverley Avenue plant in Kingston and through associate company Blue Emerald from its base at Hayes, Clarendon.
Blue Emerald also repairs electrical transformers for light and power company Jamaica Public Service. Foster earlier told shareholders that Blue Emerald will be deepening its involvement in electrical transformers by manufacturing certain vital components.
“We’ve just eked out a channel of raw material supplies, because the aim is to manufacture these major items such as coils for the transformers that are made from full copper or full aluminium,” he said.
As the second area of focus for revenue growth, Foster told the Financial Gleaner that FosRich aims to increase distribution of electrical products, lighting and finishes through its network of six business locations and three dedicated hardware stores. Its three hardware stores will operate under the ONS brand, catering to two market segments.
“At the Old Harbour, St Catherine and the Millennium Mall, Clarendon locations, we are catering to the small local contractors and artisans by offering proximity and ease of doing business. The Montego Bay location is aimed at supplying large quantities of hardware to big projects,” Foster said.
Both the Old Harbour and Millennium Mall locations have been in operation for two years. The Montego Bay outlet was formerly Bayside Supersaver Hardware, which recently “was bought out lock, stock and barrel” by the electrical company and will reopen under the ONS brand name, Foster said.
The third ‘Pinnacle’ initiative involves the supply of hardware products to large projects inside and outside Jamaica, some of which will flow through associate company FosRich USA, which has officially opened for business in Tennessee.
Foster says given that at least 10 per cent or US$1.6-billion worth of federally funded infrastructure projects are guaranteed to involve small to medium businesses, especially in the states of Tennessee, New York, Texas, Kentucky and North Carolina; and given that these companies will need support in accessing construction hardware, lumber and PVC pipes, FosRich has positioned itself to take advantage of the opportunities.
For the first quarter ended March 2024, FosRich posted nearly $860 million in revenue, down from $1 billion in the March 2023 quarter, while net profit plummeted to $33 million from nearly $122 million.
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