Durrant Pate/Contributor

Ahead of its initial public offer (IPO) of shares, which opened on Friday (May 17), Jamaican thermoplastics manufacturer Omni Industries Limited is eying regional expansion as it seeks to take a bigger piece of the Caribbean market.

The company sets its sights on expanding to Trinidad, Barbados, and Guyana in the near future, it seeks to raise J$500 million from its IPO. The Twickenham Park-based company hopes to gain the necessary investments to boost production capacity and efficiency to meet its big expansion plans.

Omni Industries currently exports to St. Lucia and St Vincent within the Caribbean Community (CARICOM) and recently broke into the Central American market by exporting beverage crates to Panama. At present, about 15 per cent of the company’s total sales come from exports. 

Projections on regional expansion

Between the next 12-24 months, Omni Industries aims to elevate this figure to 20 per cent. Furthermore, with a monopoly on plastic industrial packaging manufacturing in Jamaica and several other advantages, such as being among the nation’s leading suppliers of PVC pipes and fittings servicing top players in the construction industry, Omni’s executives say that the company is officially entering its second major growth phase.

Omni also plans to enter into additional product categories within the next 24 months, such as plastic chairs, 20-litre motor oil buckets, and bread trays.

Managing director Patrick Kumst told Wednesday’s investor briefing, “This introductory entry into the Central American market made us realise that we can compete. There are opportunities outside of these that we’re interested in, such as in Guyana, with their economy slated to boom through oil production. We are also confident that we can get into the other territories, such as Barbados—which we’re already in dialogue with to provide beverage crates—and Trinidad. Little by little, we’ll be looking at additional territories.

Many opportunities opening up

Kumst sees many opportunities opening up for the company noting, “A lot of trucks transporting products from bakeries all use a particular tray for transportation purposes. That product is not being made in Jamaica. Everybody has to rely on importation, so we see a market niche that we could get into. Meanwhile, we also see opportunity in the bulk motor oil industry. People are importing motor oil in bulk and repackaging it, and those packing containers are currently being imported. We intend to capitalize on this.”

Omni has the benefit of a diversified revenue profile by being part of three distinct market segments: construction (51 per cent of sales), industrial packaging (38 per cent of sales), and houseware (11 per cent of sales). NCB Capital Markets Limited, lead broker and arranger for the IPO, believes that herein lies the company’s high growth potential and the value to investors in subscribing. 

NCB Cap Markets endorses IPO  

Alex Johnson, manager of origination and structuring at NCB Capital Markets, hailed the Omni IPO as a very exciting investment opportunity in a promising company.

“Omni’s revenue is very diversified, given that it operates in mainly three different industries; it has strong brand recognition, especially among its business-to-business relationships; and it has a very strong performance record and value creation. When we look at the historical performance of the company, it’s a mature company that has been around for 50 years, and the fact that the company is not highly leveraged is a very good selling point,” he added.

Omni’s combined IPO and offer for sale of 500 million shares priced at J$1 per share is set to close on May 31. The company is making available 250 million new shares for subscription in the IPO, whose proceeds will accrue directly to Omni while a separate 250 million existing shares are being offered for sale by existing shareholders. 

Of the total shares, 120,931,383 shares have been set aside for members of the general public, 234 million for key partners, 20 million for employees of the company, and 125,068,617 shares for NCBCM and its affiliates.