Fri, 22 Jun 2018 02:00:14 -0400
Paramount Trading to manufacture bleach for SeprodBY KARENA BENNETT
In a deal worth $100 million, chemicals company Paramount Trading will further diversify its operation to include the manufacture of bleach.
During the company's annual general meeting on Saturday, CEO Hugh Graham announced the acquisition of bleach plant assets from Seprod Ltd, a move he said is in line with the over 25-year-old company's goals to strengthen its presence as a manufacturer in the chemicals market.
The bleach plant is expected to be operational by February 2018.
Paramount Trading currently lists chlorine gas as one of the technical/industrial-grade chemicals it supplies. The purchase of the upstream operation for Paramount signals a step in the right direction since chlorine gas is used in the manufacture of bleach, water infection and disinfection.
The company has already secured Seprod as its first customer. According to Graham, Seprod has contracted the company to manufacture bleach for its four brands and will distribute the product in its local and international markets.
“The process of repackaging chlorine ends up with bleach. If it were that we didn't have this opportunity, then we would have to sell the bleach ourselves, but now we have the opportunity of a customer so all of that product will go directly to Seprod,” Graham told the Jamaica Observer.
Paramount is also looking to secure more bleach-manufacturing contracts to further cement its place in the chemical industry. The CEO told the Business Observer that the production of its own bleach is not an issue being discussed now; the operation remains an option for the company.
As for exporting, “that may be a model that we may need to look at, whether we go directly or we partner with a distributor that is already in the market. The cost of developing a market would not necessarily accrue to us if we enter the market that way,” he said.
The chemical company plans on employing 15 people for the first phase of operation, which will be carried out at its home on East Bell Road in Kingston. He added that the company has also undertaken extensive training from the US Fire Department on chlorine emergency response.
“We believe there is still room for Jamaica to be competitive in the manufacturing sector, both for the domestic market and for exports. We are going to run a top-class facility that will not only serve our customers locally, but also help to better position Jamaica as a dynamic, multifaceted economy that can attract further investments from external parties,” Graham stated.
Paramount closed the 2016/2017 financial year with total revenue of $1.156 billion, an increase of 12.8 per cent over the prior year, while assets rose by 19 per cent to hit $1.02 billion.
The company said the growth was attributable to all areas of the business. Despite the increase in revenue, net profit declined 42 per cent to $101 million year over year, due in part to increased operating expenses.
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