Business
JAM | Feb 19, 2022

JFP Limited resilient despite pandemic setbacks

/ Our Today

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Jamaica Fibreglass Products (JFP) Limited’s booth at the JMA EXPO 2018 at the National Arena in Kingston. (Photo: Facebook @jfpmfg)

Now marking 36 years of operation, JFP Limited has proven resilient during the pandemic, boasting a robust pipeline of J$255 million for the 2022 financial year. 

For instance, more recently, the company has been awarded a J$153 million contract to manufacture and outfit the check-in counters and baggage scales at the Sangster International Airport (MBJ) in Montego Bay, which is expected to be completed during the current financial year.

During the COVID-19 pandemic, the company even produced testing booths for the Ministry of Health to assist with safe COVID-19 testing. JFP, which is recognised as a first-rate custom design contract decor manufacturing company and the largest contract manufacturer in the Caribbean region, goes to the equities market starting Monday, February 21 with an initial public offer (IPO) of shares.

The company is seeking to raise J$280 million from the IPO priced at $1 per share for the 280-millions shares on offer. Over the years, JFP has expanded its manufacturing capability to include office furniture, furniture for hotels, point-of-sale items, cabinetry, and laboratories.

Resilience during COVID-19

During the COVID-19 pandemic, the company even produced testing booths for the Ministry of Health to assist with safe COVID-19 testing. The company started with the manufacture of custom fibreglass products but as the business evolved, the product offerings grew.

JFP is now capable of manufacturing just about any item conceivable out of most materials including wood, metal, solid surface, and acrylic. JFP chief executive officer (CEO), Metry Seaga admitted that the COVID-19 pandemic brought some challenges, as delays in contracts caused a 12.1 per cent downturn in revenues in 2020 in comparison to the prior year’s outturn of J$503.7 million.

Metry Seaga, chief executive officer of JFP Limited. (Photo: Facebook @JMEAlimited)

This contrasted sharply with 2019, where revenues more than doubled compared to the year before. However, despite the downturn in revenues, gross margins remained robust increasing from 46.5 per cent in 2019 to 52.5 per cent in 2020.

Company executives attributed this increased profitability to their strong focus on a strategic plan to improve expense budgeting and management in a difficult economic climate.

Rationalising operations

“We rationalised operations to achieve greater efficiency and improve our margins. This meant reducing staffing costs, adopting new technologies, streamlining our imports process, and sourcing material locally where possible. We also adjusted quickly and introduced new product lines that ensured our continuity and delivered profits,” said Seaga.

Going forward, JFP anticipates favourable tailwinds for revenues to materialise from the hotel industry, as some 521 new rooms are expected to be added to the current stock of hotel rooms on the island in this financial year alone. The Ministry of Tourism recently announced that this is projected to grow to 7,000 new hotel rooms over the next two years.

Along with the growth of the hotel industry, the anticipated expansion of Jamaica’s casual dining and quick-service industry, along with the ongoing development of the business processing outsourcing (BPO) sector, also spell a bright future for the furniture manufacturers. Stephen Sirgany, founder of JFP highlighted, “It’s a proud feeling to see JFP grow from its humble beginnings, which started with a couple of employees working under a mango tree, to a 75,000 sq. ft. facility employing approximately 75 employees.”

Stephen Sirgany. (Photo contributed)

This achievement is positively reflected in revenues which grew over the past five years at a compound annual growth rate (CAGR) of 11.6 per cent from $285.5 million in 2016 to $442.8 million in 2020. The company’s resilience during the nine months ended September 2021, saw sales at J$210 million.

As a result of the COVID-19 pandemic, there were multiple unforeseen contract delays, which have delayed the company’s revenues for the nine month period. The expected revenues from these projects were J$81 million.

JFP continues to deliver growth, with operating profits of $93.4 million for the 2020 fiscal year, up 17 per cent compared to the prior year. JFP has risen steadily to become one of the largest furniture contract manufacturers in the Caribbean with a reputation for high-quality products.

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