JFP eyes US market

CEO of JFP Limited, Metry Seaga, says he is confident the company can successfully compete in larger international markets.

On Monday, JFP, formerly known as Jamaica Fibreglass Products, released the prospectus for its initial public offer and offer for sale. The company is seeking to raise $280 million by selling 280 million shares at $1.00 each. If the offer is successful, they intend to list on the Junior Market of the Jamaica Stock Exchange.

Speaking on Taking Stock with Kalilah Reynolds, Seaga said part of the funds raised will go towards expanding the company’s presence in the Caribbean and the United States.

Traditionally, he said, 10-40 percent of the company’s sales are from exports.

“It is our intention to bring that number up to about 50 or 60 percent,” he said.

“We feel at JFP that it is critical for us to start to use Jamaica’s location in the Caribbean and in North America to reach out to the richest nation that is a stone’s throw away from us,” he said in reference to the United States.

He noted that the Caribbean Basin Initiative (CBI), which Jamaica is a part of, allows beneficiary countries duty-free access to the US market for most goods. He also pointed out that the cost of shipping from Jamaica to the US is low.

“It costs US$2000 to take a 44 ft container from Jamaica to as far as Houston, Texas, which is on the south coast in the middle of America. It is cheaper to ship from Jamaica than it is to bring product by truck or rail from middle America, or the west coast, to the east coast,” he said.

Seaga noted that the cost of transportation and electricity were two of the major concerns the company had when considering international expansion.

“We have laid a good foundation (for expansion)”, the CEO said, adding, “JFP is 100 percent solar-operated during the day time.”

“We have invested in a solar (panelling) system that covers almost our entire 70,000 sq ft roof. We can operate at 100 percent capacity, during the daytime, without using JPS (Jamaica Public Service). So, our electricity rates are actually less than America’s,” he explained.

“So, we have overcome those issues and we are confident we can successfully compete in that market,” he said.

Seaga also insisted that the quality and dedication of JFP’s labour force is comparable, if not surpassing, the labour force in the US.

“I will say this proudly, I will put a Jamaican worker, who is equally compensated and equally trained, against any worker, anywhere in the world and I will bet my worker is gonna be more productive and build a better quality product at the end of the day,” he said.

He added that the company has also started planning for expansion by engaging potential employees who are still in school.

“We have recently formed relationships with a couple agencies, HEART Trust and another private that I prefer not to name at this point, that we have about 19 youngsters coming to start training,” he said.

“We want to have staff that is ready and available. So, we’ve started the process by bringing young people who are training in this field and giving them in-house training, while they’re at school so that by the time they graduate they’ll have a job,” he added.

Seaga said that the company also plans to build on existing relationships with multinational companies such as Starbucks and KFC.

“So, we’re not going in blind … we’re gonna go into the relationships that we already have. And, when you enter a company and you show your portfolio and say ‘I am an approved vendor of Starbucks, KFC and TGI Fridays,’ they look at you differently,” he said.

“They stop looking at the fact that you’re from Jamaica and thinking that you are from a little island with sun, sand and sea only and they really start to look at you,” he added.

He also noted that despite all the negative impacts that the COVID-19 pandemic has caused, it has always opened a door into the market, as American companies are now searching for new furniture and decor suppliers.

“We are now seeing companies coming from as far as California to as close as Jacksonville Florida, who are saying to us [they] would normally order [their] hotel furniture from China but they are telling us that we can’t get it for 12 months’,” he noted.

He said that JFP sees this as an opportunity to get and keep these customers by showing them that they can produce an amazing product at a fair price in the time agreed with Jamaican workers.

“Lumpy” business

Meanwhile, Seaga has also addessed some concerns about the company’s numbers.

According to the prospectus, JFP’s revenues and profit both fell in 2017 and 2018, before doubling in 2019. The numbers took another dip in 2020 due to the pandemic, but remained well above 2018 levels.

“Our business tends to be lumpy when you have large contracts. When you’re doing a hotel, it may be a US$1 million job. If one of those contracts comes through or ends prior to a financial year, it can skew the numbers significantly,” he explained.

Seaga said that in 2019, the company decided to aggressively pursue the hotel business, leading to a big jump in revenues the following year. They have since provided furnishings for the Spanish Court and AC Hotels, among others. JFP has also won the bid to furnish the new ROK Hotel currently being completed in downtown Kingston.

However, 2021 revenues have slowed, with sales for the nine months ended September 2021 down to $210 million, compared to $312 million for the same period in the prior year.

“A lot of the projects we were working on took a lot longer than expected,” he explained, but pointed to the pipeline for 2022, with $255 million estimated through to Q3. This includes a $153 million contract to manufacture and outfit the check in counters and baggage scales at Sangster International Airport in Montego Bay.

The company’s IPO and offer for sale is set to open on Monday, February 21 and scheduled to close a week later.

The lead broker for the invitation is GK Capital Management and the selling agent is NCB Capital Markets. Orders can be placed via NCB’s GoIPO platform.

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Sashell Williams2024-09-03T21:40:31-05:00