Omni going after more exports

PVC pipe maker Omni Industries Limited, which aims to list on the Jamaica Stock Exchange, JSE, announced plans to increase exports to one-fifth of total sales, or $400 million, within two years.

“Today, with our influx into the Panamanian market, [exports] have increased to 15 per cent of total sales,” said CEO Patrick Kumst in an investor briefing at midweek. “And we are expecting 20 per cent for our export potential over the next 12 to 24 months,” he said.

When matched against group sales, the export target would increase from $300 million to $400 million.

Omni “always” exported to the Caricom market, but the segment traditionally accounted for five per cent of total sales for the company that came into existence 50 years ago. The company operates from its seven-acre facility at Twickenham Park in Spanish Town. It caters to over 1,800 local and foreign customers.

Kumst said the company continues to operate in Jamaica, despite high energy costs, because it gets savings in other realms, such as staff costs. He added that the company recently installed a 300-kilowatt solar-powered generator to reduce its light bill.

Omni generated a profit of $151 million on revenue of $2 billion in 2023. Profit was flat year-on-year.

Its revenue is generated mainly from the sale of pipes, fire hydrants and crates. Kumst said Omni was the only manufacturer in Jamaica that makes buckets and crates for the beverage, food and paint industry.

“We are in three distinct market segments,” he said. “In PVC pipes there are a lot of importers into the island”, he added, while also citing two of the noted suppliers of PVC pipes in the market, Tank-Weld and FosRich.

“But when you look at the industrial packaging sector, Omni stands alone,” Kumst asserted.

The company supplies commercial clients in the private sector, as well as state entities. The latter includes the supply of fire hydrants.

“Yes, we do distribute fire hydrants and I would say that we are the main suppliers. Not only to that market but also to the Jamaica Fire Brigade. They rely on us, not just for new fire hydrants but also to replace damaged ones, or even components within the hydrant,” said Kumst.

The company plans to raise $500 million in its initial public offering of shares via the junior stock market. Most of the proceeds will go towards funding the expansion of the business. Omni plans to buy equipment to increase its productivity and competitiveness.

The IPO, the first for 2024, opened for subscription on Friday. NCB Capital Markets is lead broker.

Omni Industries emerged in 1974 aiming to take on a market that was dominated by plastic pipe imports. The founder, the late Uwe Kumst, a German entrepreneur in Jamaica, initially specialised in the production of garden hoses. The company swiftly garnered market share by prioritising reliability and adherence to German engineering standards. Later, it expanded beyond consumer goods to include industrial products, such as PVC electrical conduits and pipes, in its portfolio.

During the company’s formative years, Von White joined forces with Uwe Kumst as partner in the business. Today, White serves as the company’s chairman.

business@gleanerjm.com