Camilo Thame, Business Reporter

Workers at the Corrpak carton making factory at 154 Marcus Garvey Drive, Kingston, feeding cardboard on to a converter, October 19. The $300 million plant began operating 10 months ago.- Ian Allen/Staff Photographer Box plant investment paying off - eading to break-even on monthly turnover of $30m

On a bet that they could fill a need not entirely met by overseas firms at a price equal to the landed cost of imported products, Howard Mitchell and Charles Lym made a $300 million investment in a carton manufacturing plant in Kingston, which has been giving good odds.

Mitchell, executive chairman of Corrpak, says his plant should begin to break even on sales of $30 million a month less than 10 months after commencing production for the local market in August this year.

"We started getting boxes to market in the first week of August," Mitchell told The Financial Gleaner in an interview last week. "We should start breaking even by mid next year on $30 million a month."

'unique economies'

CorrPak's ability to reach profitability in less than a year, while maintaining competitive prices is based in no small part on its 'unique economies' which include the modern equipment involved in production, but importantly, the company has no debt to service.

"We are fully capitalised so we do not have any finance cost," said Mitchell.

Corrpak was created in 2004 as the manufacturing arm of Commercial Holdings Limited (CHL). Corrpak and CHL are owned by Mitchell, majority shareholder Charles Lym who started CHL in 1971, and Canadian business mogul, G. Raymond Chang. The three spent US$4.2 million over the 12 months to May this year to get the box plant running, creating 22 jobs.

The opportunity presented itself for the three when they realised that it was possible to get a 'sizeable chunk' of what Mitchell estimates to be a $1.4 billion industry at a time when the higher cost of shipping and handling packaging material, which is largely imported - about half from CARICOM - made it possible to compete on price.

The factory located on Marcus Garvey Drive near to Kingston's ports, takes reams of paper to convert to cardboard through its corrugated plant and then prints and transforms the cardboard into packaging cartons, through its converter.

The corrugated plant can put out 60,000 pieces in a normal eight hour run but the converter churns out roughly 30,000 boxes in the same time, requiring two shifts to maximise output.

Running on one shift

Currently, the plant is running on one shift employing 25 persons, but sales and marketing manager Lennon Crooks, believes his firm will have to operate for 12 hours a day two months ahead of time.

"Based on demand heading to two shifts earlier than planned," Crooks estimated. "We planned to start a 12-hour run by the end of the first quarter next year, but we may have to start in January."

Overall, Mitchell hopes to capture a quarter-share of the local market for carton boxes, including die cut boxes and food packaging boxes made for local quick service restaurants, such as Island Grill, which he is also a director.

Additionally, the company plans to expand regionally within the next three years.

camilo.thame@gleanerjm.com