Bleach business diversifies ahead of going public

Avia Collinder, Business Writer

Alfred Thomas wants to take his four-year-old company public, but isn't ready to take the plunge just yet.

Instead, he will use the next two years to expand the product range at Pioneer Manufacturing Distribution Company, and venture into new Caribbean markets before offering the stock on Jamaica's junior market in 2012.

The Kingston-based company, whose proprietary brand of bleach, Chloro-Do, is manufactured by others in Jamaica and Trinidad under outsourcing contracts, is hunting new cash to further diversify its range of distribution products, and build on regional business alliances to tap into new markets, come next year.

Thomas, Pioneer's chief executive officer and principal shareholder, said he would be investing about J$35 million in 2011 and 2012 to create a distribution footprint in the eastern Caribbean for its bleach brand.

The company has owned Chloro-Do for three years, but does none of the manufacturing of the three products produced under the brand - Chloro-Do bleach produced in Jamaica, a lemon version produced by Ansa McAl Chemicals Limited of Point Lisas, Trinidad, and Chloro-Do Blue, a laundry soap manufactured by Seprod - only the distribution.

Thomas said the bleach is made by two Jamaican firms, which he declined to name.

Pioneer also distributes on behalf of 10 overseas companies - L'Oréal Caribe; Bon-O-Bon Agencies; Perfetti Van Melle; Turbo Plus; Chocolaterie Guylian NV; Punto Rojo; Dr Pepper Snapple Group; Hulco Sales Corp; Industrias Tip-Top; and Cefa Central Farmaceutica SA.

Its portfolio of distributed products include, Mentos sweets, L'Oréal and Garnier hair products, Pro-Pet dog food, Nantucket fruit juices, cosmetics, La Bella Boco and Guylian chocolates, Cugi cookies, Clabber Girl baking powders, Lavalon fabric softener, Bactex soap, and Sutton deodorants; as well as locally produced Hercules garbage bags.

Pioneer's regional alliances include Ansa McAl Chemicals, part of a conglomerate with tentacles throughout the Caribbean.

But plans to leverage that and other relationships to push Chloro-Do into the export market will have to await the acquisition by Pioneer Manufacturing of geographical indication and quality markers from the Jamaica Bureau of Standards.

The Chloro-Do brand was initially purchased from Colgate-Palmolive in 2007 for an undisclosed price and with financing from the National Export Import Bank of Jamaica. The bleach was originally developed by Mead Johnson in the 1970s but was later sold to Seprod. The brand was again sold to Colgate-Palmolive in 1996, which also acquired the Castile, Mildex and Sudsil brands from Seprod at the time.

The bleach product, in which Colgate appeared to have lost interest, in favour of newer products, has proven to be a winner for its new owners.

It has grown to hold the number two position among bleaches on local shelves and contributes 20 per cent to company revenue, Thomas said.

"The brand had become dormant," he told Wednesday Business, referring to the period prior to Pioneer's acquisition.

"When we bought it, we reassured the Jamaican public that the bleach was back with quality and stability. In the last three years we have gained significant market share (and) our service levels have eliminated other brands," the CEO said.

But Thomas is two years off the mark on his plan to attain pole position in the Jamaican bleach market, which he had predicted in 2007 would have happened a year into the acquisition when its main rivals included Chlorite, Ajax and Chlorox.

The EXIM loan, like other debts, he said, is "comfortably" being serviced.

"Our target was to break even in three years and we have accomplished this," said Winston Barrett, Pioneer's director and financial controller.

"We are in our fourth year and we are now showing a small profit."

Another top seller for Pioneer Manufacturing is the L'Oréal brand, for which the company secured exclusive distributorship in 2007 and for which market in the retail sector is said to have grown by 300 per cent since acquisition.

The skin and hair-care line now contributes 20 per cent to company revenues, matching the performance of the Chloro-Do line.

Soaps in general contribute 35 per cent to revenue, with total income for the company split 25 per cent from manufacturing and 75 per cent distribution. With the planned build out of the Chloro-Do brand and the addition of other products to the manufacturing line, it is expected that this ratio will reach 50:50 in 2012.

The company has also added Pro Pet dog food, which they say is selling well in a market increasingly interested in prepared meals for animals.

Market research also led the company, its officials said, to introduce other products including deodorant and fabric softener.

Pioneer Manufacturing was started in 2006 by Thomas, a Harvard marketing graduate and former distribution and marketing director at HD Hopwood.

Thomas, along with two of his friends, provided 60 per cent equity and borrowed the remainder of the cash for start-up.

The company's staff number 35, including sales representatives, merchan-disers and others. Depending on the availability of financing, which is again being sought from EXIM, Thomas said, the staff complement is expected to increase by 10 in the next 24 months.

austanny@yahoo.com