PA Benjamin claws back export
Published:Friday | December 10, 2010 | 12:00 AM
Avia Collinder, Business Writer
P.A. Benjamin Manufacturing Company, the 131-year-old personal-care and flavour-products maker, has added three new export markets to its business line-up after losing out on some foreign sales following the folding of one of its major distributors.
Chairman and Chief Executive Errol Powell said Belize, Turks and Caicos and the US Virgin Islands have come on stream as new markets and should compensate for the earlier loss of business, which had slashed annual export performance this year.
Cross-border sales account for 30 per cent of P.A. Benjamin's output.
Older markets for the firm include the United States, Canada, United Kingdom, Cayman, The Bahamas, Trinidad, Antigua, Grenada, Guyana, St Vincent and St Lucia.
And in other moves designed to stimulate earnings, the company has also moved to add third-party contract packaging.
This move has the potential to increase business and output without the need for additional investments, Powell said.
"It is too early to say how much business we plan to do," Powell said of the new arrangement.
He already has one small contract with a party he would not name.
The manufacturer said he will also be be rolling out new products next year.
Over the last three years, P.A. Benjamin has invested J$30 million in a new filling line, expansion of factory and warehouse space, introduction of a new computerised management information system and took seven new products to market.
The investment included J$16.9 million for plant upgrade and expansion to achieve greater efficiency and productivity.
A new point-of-sale system, the company head added, resulted in a 12 per cent improvement in local sales so far this year.
Last year, P.A. Benjamin realised sales growth of 15 per cent despite the recession, Powell said.
Exports, however, have not kept pace with local market gains, as the loss of a major foreign distributor coincided with the emergence of counterfeit Benjamins products overseas.
"Both problems are being addressed and we expect to resolve them in the near future," he told the Financial Gleaner.
Cost containment remains a central plank of the company's business strategy even as it pinpoints the need to improve exports through the maintenance of an active marketing intelligence network, Powell said.
The timely identification of market opportunities is expected to go hand in hand with the introduction of new products, product extensions, and improved product presentation.
"Increased growth in our overseas markets, through introduction of new products as well as our ability to increasingly earn foreign currency, has made the company more self-sufficient and less dependent on the commercial banks," the CEO said.
The company operates in several competitive market segments but is not, Powell insists, daunted by the influx of competing foreign brands.
P.A. Benjamin Manufacturing was established in 1879, originally called Benjamin's Jamaica Healing Oil Factory after its founder, who quickly targeted Jamaicans abroad with his concoctions.
In 1930, the company was bought by the firm Cecil B. Facey, followed by purchase in the late 1950s by the Matalon family.
Then in 1962, P.A. Benjamin, along with Cecil B. Facey, was incorporated into the newly formed ICD Group of Companies until 2000 when the company again changed hands.
The company is focused on pharmaceuticals, cosmetics, food flavourings and sauces.
Its current best-sellers, Powell said, include the new Benjamins hand sanitiser, which was created in response to the pandemic outbreak of the H1N1 virus.
The company engaged its research and development team to develop a hand sanitiser that did not require the use of water.
Powell has identified as current challenges, high utility costs, which he said have been tackled innovatively. Several measures have been adopted to curtail water and electricity usage.
"We were able to contain the increase in kilowatt-hour consumption above last year to 8.7 per cent, with a 20 per cent increase in production," the CEO said.
"This was effectively a nine per cent reduction in consumption per unit of production, and has added significantly to increased productivity," he said.
Inside the P.A. Benjamin Manufacturing Company factory in Kingston.