By Al Edwards, Business Co-ordinatorEARLIER THIS week, R. Dhiru Tanna officially opened the factory that manufactures Jamaican laundry soap Blue Power, thereby sounding the clarion call for what many consider the dying local manufacturing sector. Located in downtown Kingston at 4 Victoria Avenue, the factory produces 120 tonnes of soap a month. There are 72 bars sold in 10.8 kilo boxes. Blue Power accounts for 30 per cent of the market and produces between 1,400 tonnes to 1,500 tonnes a year. The Jamaican market produces between 4,000 and 5,000 tonnes of soap a year.
Speaking with the Financial Gleaner, Blue Power's managing director Dr. Dhiru Tanna said: "The total investment including working capital for this project came to J$35 million. Raw materials account for much of that. We export to the Cayman Islands, the United States, Guyana and the United Kingdom Sales in New York are picking up and that is encouraging."
Jamaica is the largest laundry soap market in CARICOM. The company's own brand is Blue Power but it also produces soap for Lasco Distributors, Barco Caribbean, Industrial Sales and HiLo .
The directors of Blue Power are: Dhiru Tanna, Peter Millingen, Kenny Benjamin and Tony Hart. Kenny Benjamin owns the building from which Blue Power is operated and opted to take shares for the rental equivalent. Dhiru Tanna has had a long association with the manufacturing of soap. His family started a soap making business in Uganda back in 1935. That enterprise is still in business and now has 25 per cent of the Ugandan market.
Blue Power operates on an extremely small margin and hopes that with better brand awareness and larger volumes, it will be able to improve its margins. Blue Power Limited made a substantial loss in the first 18 months of its operations and has now began to operate in the black on a monthly basis.
Blue Power actively supports local producers and importers of supplies. The major contributor is West Indies Paper which makes the cartons used for packing.
Blue Power Limited is a 100 per cent subsidiary of Lumber Depot Limited based in Papine. Both companies have a common Board of Directors.
Mr. Tanna said that Blue Power was looking to manufacture a cocoa bathing soap by the end of this year. He said that one of the biggest obstacles he faced was raising finance for reconditioned machinery.
" We started by servicing the Jamaican market which took to Blue Power laundry soap really well and in November 2002 we sold our first box of soap. People who operate businesses in manufacturing have been so battered in recent years that they are beginning to say there is no future in manufacturing. But maybe small ventures that service the local market primarily is the way to go."
The special guest speaker at the opening ceremony was Mrs. Dorothy Pine-McLarty, a partner at the law firm of Myers, Fletcher and Gordon, who said: "Manufacturing commenced in 2002 and already Blue Power has captured a significant share of the local market and has begun to penetrate markets in the United States, United Kingdom, Cayman and Guyana. Blue Power comes at a time when the regeneration of downtown Kingston is paramount. It also gives those of us who work downtown a chance to know that there is still life in the capital city of our country and that manufacturing is not dead in downtown Kingston.
TAKING THE RISK
"Dhiru tells me that at first, he wasn't certain that a manufacturing venture like this would be successful and although he completed all the usual applications to indicate that he had great faith and that he would be employing quite a few persons within a couple of years deep down, as he was not quite sure of the outcome, he was reluctant to involve any financial agencies at that time. He persuaded his friends, relatives and friends of relatives to finance the project, they did but the financing was short-term. Now as we all see, the project has taken off.
" Any business operation that can overcome its initial glitches, achieve all of this and become viable within two years can be regarded as successful in any language.
" Dhiru tells me that he is actively putting together details for an expansion plan which will involve increased production and, of course, of necessity, a much larger work force. It is my hope that these plans will also offer opportunities to investors partial to the re-birth of manufacturing in downtown Kingston."
