Durrant Pate/Contributor

Jamaican soap manufacturer, Blue Power Group, delivered another solid quarter in January 2024 in which revenues went up 14 per cent while shareholder profits surged by a whopping 288 per cent. 

The improved third-quarter profits for January reflect the combined effect of improved revenues, a range of initiatives to improve plant productivity and labour productivity, improved procurement conditions and logistics costs and a change in the sales mix to focus its production capacity on higher-margin products. These factors also explain the improved year-to-date profits. 

Shareholder profits for the combined nine-month period ended January 31, 2024, totalled J$120 million compared to J$29 million for the comparable period in the prior year. Blue Power benefitted from its ongoing initiatives to develop and maintain strategic long-term customer relationships with some of the leading soap brands and distribution enterprises in Jamaica. 

Ongoing investments in plant and equipment 

The management reports, “These relationships are supported by our ongoing investments in plant and equipment to improve competitiveness and reliability and to expand our range of high quality and speciality soaps. These initiatives contributed to our improved gross margins. Importantly, the Group also increased its net finance income and the share of profit from associates.”

Blue Power’s investment in associated company, Lumber Depot Limited, performed satisfactorily during the period. With the improved operating performance, Blue Power now has a healthy business supplying the Jamaican market with laundry soap and a wide range of bath soaps including value products, medicated soaps, anti-bacterial soaps, beauty soaps and natural soaps that include local ingredients and locally made formulations that support healthy skin. 

The company reports that it is now the leading manufacturer of soaps in the Jamaican market noting that an important part of its plan for sustained business growth is its ongoing commitment to efficiency and innovation. During the quarter, Blue Power continued to complete capital projects and make improvements to its quality systems, efficiency, facilities and product lines. 

Business model constraints

According to company chairman, Jeffrey Hall, “We remain hopeful that these improvements will allow Blue Power Group to grow its volumes in the years ahead by manufacturing and co-packing bar soaps for regional and international markets. We note, however, that some of these opportunities will be constrained because our business model faces a challenge from regional producers who have sought to apply trade rules to add to our costs and limit our prospects for business growth in CARICOM.

The Blue Power balance sheet, investment portfolio, and liquidity also remain strong. The value of its cash, investments and associated company interests totaled approximately J$808 million at the end of the third quarter. 

The company currently holds land that is adjacent to its core operations and is suitable for the expansion of its plant over time as well as for the development of commercial buildings that can contribute in due course to our rental and investment income. This, Hall trumpets, puts the company in a position to diversify the business through opportunistic investments in related businesses to counter any challenges that it may face in the market for bar soap.