Lasco Distributors Limited, LASD, has made progress on the expansion of its warehouse in St Catherine, planned for completion in 2024, and is already eyeing a similar project for the pharmaceutical arm of the business in Kingston.
For the Kingston project, the company is considering whether to retrofit existing space or erect something new.
As for the ongoing project, LASD is adding 65,000 square feet or 50 per cent more warehouse space at White Marl alongside the expansion by affiliated company Lasco Manufacturing Limited, LASM, which is adding 75,000 square feet of space. The manufacturing plant will grow to 515,000 square feet under the current project.
LASM is pumping about US$10 million ($1.55 billion) into the floor expansion and the addition of new manufacturing lines to increase production capacity aimed at fulfilling demand in the local, regional, and international markets. The company, which started out as a producer of powdered beverages in Jamaica, later expanded to canned products, dry goods, as well as liquid beverages under the iCool and Lyrix brands.
Since the start of the year, the company, headed by James Rawle, has released new products, including a further reduced-sugar iCool drink targeted at schools and facilities such as hospitals. It has also added three new flavours under the iCool brand: ginger lemonade, pink lemonade, and lemonade.
The factory is being expanded in tandem with the growth of its product portfolio and markets. Accordingly, LASD, which handles all of LASM’s distribution, is expanding its warehouse to facilitate storage of the additional stock.
The two expansion projects represent about US$18 million of investment.
“The idea is to increase the square footage by 50 per cent, or 65,000 square feet, but there is also the consideration of storage in height,” said Managing Director of Lasco Distributors John De Silva.
“We are installing industrial racks, which brings additional storage capacity,” he said during his report to shareholders at the company’s annual general meeting last Wednesday.
The industrial racks are being assembled currently for installation early next year.
The distribution company produces the most revenue among three affiliated Lasco companies, but the manufacturing operation brings in the most profit. The third and smallest affiliate is Lasco Financial Services, which is in the business of money services and microfinance.
For the three months ending June, both LASD and LASM reported double-digit growth in revenues and earnings, but LASM had the fatter bottom line results at $526 million. LASD’s profit for the period was $447.6 million.
Outside of the Lasco’s locally made products, LASD is also exclusive distributor in Jamaica for products foreign brands Curves, FreeJoy, and SlimFast. Its business is separated into the nutrition, food, and beverage division, hygiene, and healthcare, which is managed by the pharmaceutical division.
According to Rawle, speaking in his capacity as chairman of LASD, the distribution company is eyeing new additions to the pharmaceutical portfolio and will be building out a new warehouse at the Red Hills Road complex to facilitate the new business.
The designs have been approved, but as to the execution of the project, Rawle said it would gestate until the company had come up with the most cost-efficient option for the buildout of the new space.
“The idea was to expand the warehouse to accommodate the expansion of the pharmaceutical store, but we are thinking again because there is another solution that has come up on the same premises that makes sense,” said Rawle, who is chairman of all three Lasco affiliates in addition to being the managing director of LASM.
“The building can be easily retrofitted to provide the space that we need,” he said.