Energy products trader and pipe manufacturing company FosRich has entered the United States through the newly incorporated FosRich USA Inc, which is expected to start doing business by the end of summer.
CEO of FosRich Company Limited Cecil Foster, who was in New York this week, said the company is registered in the state of Delaware and will operate from New York.
Its initial target market for its PVC pipes and fittings is the tri-state area of New York, New Jersey, and Connecticut.
“This area has a lot of Jamaicans and a lot of developers who are friendly with Jamaicans. In addition, there are Jamaicans who, even if they don’t own businesses, are in decision-making or influential positions,” Foster said.
FosRich started the production of PVC pipes and fittings from its Marverly Avenue complex in Kingston four years ago, while its associated company Blue Emerald produces large-diameter, industrial-grade pipes and fittings.
FosRich doesn’t intend to compete directly with US firms, but rather, to trade in a niche segment as a black-owned business with roots in Jamaica, said Foster.
The PVC pipe segment is one of 11 lines of business at FosRich, which also includes distribution of solar energy products and transformer rebuilding or repair. However, the New York office will only be the conduit for trade in PVC pipes. Manufacturing of the pipes in the US remains an aspiration for the future, Foster said.
FosRich produces pipes conduits and fittings for industrial and household use to ASTM standard. ASTM International, formerly known as American Society for Testing and Materials, is an international standards organisation that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services.
“We have the ASTM standard in manufacturing our pipes. We’re a black-owned business and we’re registered and working in the USA,” Foster said.
“Once you’re registered and certified under the programme, then there is at least a trillion dollars’ worth of business available to us. These are contracts that must go through minority businesses,” he asserted.
Foster said he’s targeting September to begin shipments, but declined comment on the size of the operation being set up and the investment being made.
The buildout is happening as FosRich prepares to approach shareholders for fresh cash via a rights issue, brokered by Mayberry Investments Limited, that’s targeted to raise $126 million in early June.
“The first order of business is to set up the business and we hope to be fully up and running by the end of September,” Foster said of the American operation.
“What we have is just a simple office. There will be no retail operation, but rather, a location where we can interact with the various platforms and respond to needs as quickly as possible,” he added.
For the first time in its history, FosRich reported quarterly revenue above $1 billion for the period January-March 2023. However, earnings dipped as expenses and taxes climbed. Profit amounted to under $122 million, compared to nearly $159 million in the comparative period in 2022, but a portion of the gap in performance resulted from the roll off of the initial portion of tax the waiver extended to it as a junior market company when it listed just over five years ago.
FosRich had a tax bill of over $17 million in the March quarter, compared to zero in the comparative period last year.