Durrant Pate/Contributor

Jamaican-based soap manufacturer Blue Power Group is being weighed down heavily by two external factors: rising raw material costs and the 40% Common External Tax (CET) levy on its exports.

In spite of this, the management is reporting that the 4 Victoria Avenue Kingston-based company remains competitive. The company saw its profitability drop to $28 million during the July first quarter, down from the $48.5 million posted for the same period last year.

The financial results continue to reflect the adverse impact of compressed margins arising from increased raw material costs, compounded by the CARICOM trade rules that levy a 40% CET on the total cost of our essential raw materials. Blue Power remained competitive despite these challenges and maintained revenues of $232 million against the prior year’s $234 million. 

Steadily addressing margin pressure 

Company Chairman Jeffrey Hall reports that Blue Power is “steadily addressing the margin pressure being experienced by undertaking planned initiatives to drive volume growth through product development and improved marketing in partnership with our key customers and distributors. Blue Power continues to be the market leader in the manufacture of bar soaps for bath and laundry.”

The immediate plans focus on innovation as a way of extending its reach beyond value-priced product lines into new premium bath soaps with speciality attributes that address contemporary skin care and beauty needs, which are ongoing. Blue Power’s balance sheet, investment portfolio, and liquidity continue to remain strong. 

Cash and investments totalled approximately $620 million at the end of the first quarter. Its investment in the associated company, Lumber Depot Limited, continues to be an important part of its equity holdings and performed satisfactorily during the period. 

Blue Power continues to be optimistic about the competitive position and growth prospects for the business in Jamaica, as well as the opportunity to develop new markets. The company is also prepared to diversify the business through opportunistic investments in related industries.