Paramount trading gets Fesco contract
Paramount Trading (Jamaica) Limited has secured a contract manufacturing and private labelling services agreement with Future Energy Source Company Limited (Fesco).
The contract, which will see Paramount producing and distributing Fesco's line of lubricant products, is valued at approximately $216 million.
Paramount Trading, via a notice on the Jamaica Stock Exchange (JSE), advised that the agreement is in line with the company’s continued effort to strengthen its presence as a manufacturer in the lubricants business.
The company has been seeking to optimize operations at its new $600 million lubricant plant in Kingston, which was opened in October 2019.
The factory employs 100 persons.
Paramount had previously indicated its intention to import the raw materials and manufacture 90 per cent of the lubricants that it will distribute on the local market in conjunction with US-based Allegheny Petroleum Products Company.
In November, the company also completed an Asset Purchase Agreement with Allegheny Petroleum Products. The agreement allows Paramount to acquire the right, title and interest for all the assets of Allegheny under the joint venture.
The company also said that it has secured via licensing, rights to make certain and distribute products of Allegheny Petroleum Products to the entire Caribbean.
Products made at the plant include engine, transmission, hydraulic and circulating oil. The plant has a capacity to produce 220,000 gallons of blended oil per day.
The new plant also offers oil analysis, technical and engineering services.
Paramount has been listed on the JSE Junior Market for seven years, but has been in operation for 28 years.
It is the local distributor of Sika construction products and Allegheny Petroleum oil and lubricants. Fesco will now be added to lines produced.
In its recent six-month report for the period ended November 30, 2019, Paramount reported revenues of $768 million, which was three per cent less than the similar period in 2018 when revenue was $795.5 million.
Net profit for the six months was $39.55 million compared to $37.51 in 2019.
Management noted that for the six month period, total capital expenditure was $268 million, representing funds used to build out manufacturing operations.