Blue Power is making efforts to reclaim Caricom markets with a significant portion of sales now coming from the region.
In his latest letter to shareholders, Blue Power Chairman Dhiru Tanna said that management and the board are exploring all avenues for restoring exports to Caricom, which constitute about 20 per cent of the company’s sales.
The company is working with the Ministry of Industry, Commerce and Investment to reclaim its export markets in the region after losing its Certificates of Origin for exports in 2019.
The certificates were cancelled after the emergence of a conflict between Caricom authorities and Blue Power over ingredients in its soaps that were from outside the region.
Since then, Blue Power has looked in particular at each country in which the importation of ingredients (raw materials) have passed manufacturers certification standards and government approvals for duty-free sale
In a previous letter, Tanna said, “It is very much in the interest of Caricom to permit products made by these “certified” manufacturers to be traded on a duty-free basis in the region. Without such interpretation, there will be many missed opportunities for production and employment in Caricom as well as a lack of competition and extra imports from non-regional countries.
Overall, for the nine months ended January 31, 2021, export sales for Blue Power increased during the quarter from JM$22 million to JM$53 million, while other income remained relatively the same as in the previous year.
The company also increased exports to the United States.
The company now derives revenue from manufacturing, rental of property, and provision of management services to previous subsidiary Lumber Depot Limited, which now operates on its own.
For the third quarter, revenue reached JM$179 million compared to JM$111 million in the previous year — an increase of 61 per cent.
Management said that a significant part of the increased revenue is due to sales of lumber which did not exist in the previous year.
The company noted that within Jamaica, it added a new revenue stream from sales of lumber and ply board imported for sale to Lumber Depot.
The financial results for the nine months show a profit of JM$111 million before tax and JM$83 million after tax.
This compares with JM$66 million in after-tax earnings for the previous year, which included earnings of JM$21 million from discontinued operations (i.e. Lumber Depot as a division in the first quarter) and significant redundancy costs.
Total comprehensive income for the nine months included gains from changes in the value of equity holdings, which amounted to JM$88 million, resulting in JM$171 million for the nine-month period.