Blue Power soap sales strengthen with bias towards hygiene
SOAP MAKER Blue Power Group has seen a rise in sales as a result of the higher importance placed on cleanliness amid the COVID-19 pandemic.
The company also announced that its export sales doubled due to the addition of large US retail chain Walmart as a sales channel.
“Jamaicans are very interested in antibacterial soap in all its forms,” said company director Jeffrey Hall, who chaired the annual general meeting held at the Hope Zoo in Kingston on Monday. Blue Power is chaired by its founder, Dhiru Tanna.
“There is a bias towards hygiene that will likely continue throughout the year,” Hall said.
Blue Power, which makes soaps for laundry and personal care, recorded double-digit growth in sales in the fourth quarter ending April, as well as for its first quarter ending July.
The “huge uptick” in usages of antibacterial soaps should continue throughout the year notwithstanding competition, Hall added at the company’s in-person annual meeting.
“There has been a pivot both for Jamaicans at home and overseas,” he said.
The company did not introduce any new products in the market during the quarter. Hall said, however, that the current health environment offers opportunities, and the company would innovate where necessary.
The group spun off its Lumber Depot division into a standalone listed company last year. This resulted in the restating of the 2019 financial results to eliminate the discontinued lumber operations.
FIRST QUARTER EARNINGS
Blue Power earned $161 million in revenue for the July first quarter compared to $118.7 million a year earlier from continuing operations. Profit before tax totalled $44 million, up from $26.5 million a year earlier from continuing operations. The company also made a bigger net profit at $33 million for the quarter compared to $23.4 million a year earlier, even though it now pays full income tax at 25 per cent following the expiration of its 10-year waiver as a junior market company It paid half that rate in 2019.
Export sales showed a dramatic increase of 111 per cent over the same quarter last year, boosted by extra shipments to the United States, where the company was able to display one of its products in “several Walmart stores”, according to the statement accompanying the company financials.
ACCESS TO CARICOM MARKETS
Exports to the Caribbean region are challenged due to increased tariffs on its products after the company lost preferential access to Caricom markets.
Hall expects Caricom to make a ruling on the matter later this year.
“Caricom continues to review the matter. We feel that the manufacturing we do in Jamaica should be sufficient to qualify for entry without tariffs. The matter is under review, but we have made strident arguments. We feel this is a position that not only for the soap industry should take, but Jamaican manufacturing in general,” he said.
In late 2019, Blue Power became ineligible for special treatment for its exports to the region under the Caricom trade treaty, based on a new ruling by the World Customs Organisation, WCO. It’s due to the company using imported palm oil-based noodles as raw material, which the trading body viewed as a breach of the rules of origin that make them eligible for preferential access to Caricom
It meant that Blue Power’s soaps sold to markets in the region would no longer enter at zero tariff, but rather, attract the same 40 per cent duty as products imported from outside the region.