Jan 2013 Financial News

Hardware & Lumber eyes new products in profitable agri division

Jan 16, 2013

FACED with declining activity in construction, an industry to which it is invariably linked, Hardware & Lumber (H&L) Limited will continue to leverage its robust retail and distribution network to cash in on opportunities in agriculture.

H&L CEO Andrea Coy said the company is focused on introducing new products for the agricultural sector through subsidiary AgroGrace. From six locations islandwide, AgroGrace supplies pesticides, fertilisers, vegetable seeds, animal feeds, home garden items and farm equipments.
"A lot of the focus on H&L is (centred on), 'if construction is down, H&L must be down'," said Coy.

"We are not going to go into farming, but the focus is to get better at retail to ensure that we mitigate the issues there may be on the construction side, as well as look for new opportunities as they come," she added.

Coy was speaking with the Business Observer yesterday at the launch of two new pesticides — Revus and Engeo — for sale at AgroGrace stores. Revus is a fungicide, which Swiss manufacturer Syngenta says is resistant to washing off by rain and very effective in helping to prevent diseases in crops due to its action inside and outside leaves. Engeo, also manufactured by Syngenta, is a solution to control foliar pests in vegetables.

"We are continuously looking where there are genuine needs that are not being met," said Coy.

Led by its agricultural division, H&L more than doubled net profits to $14.2 million for the nine-month ended September 30, 2012 compared to the corresponding period the year prior. H&L's agricultural segment reported profit before tax of $108 million over the period, while its wholesale hardware and retail hardware household division were both in the red to the tune of $58.5 million and $28.3 million, respectively.

The construction sector declined by over four per cent during the first three quarters of 2012, according to data from the Planning Institute of Jamaica. The industry has recorded annual growth only once (2011) over the last five years as it struggles to cope with the global financial meltdown.

Don Wehby, head of H&L parent GraceKennedy, said in an earlier interview that the company will add new products to the portfolio and continue to seek ways to provide building solutions more efficiently in order to reduce the costs in the segment as it copes with the sluggishness of the construction industry. H&L operates 10 Rapid True Value stores, which retail a wide variety of general household goods and building materials.

Meanwhile, speaking at the launch ceremony held at the H&L Sports Club in Kingston, Agriculture Minister Roger Clarke stressed the importance of ensuring that chemicals used by farmers to control pests comply with new international food safety standards.

"Currently, farmers worldwide have to contend with food safety regulations, including the Food Safety Modernisation Act (FSMA) being implemented by the USA," said Clarke.

"We at the Ministry of Agriculture are making sure that we are fully on board," Clarke said.

The FSMA, considered to be the most sweeping of America's food safety laws in more than 70 years, gives the US Food and Drug Administration unprecedented authority to better ensure that imported products meet the country's standards and are safe for its consumers.


Source:
BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com
Jamaica Observer
Wednesday January 16, 2013

http://www.jamaicaobserver.com/business/Hardware---Lumber-eyes-new-products-in-profitable-agri-division_13405085#ixzz2IAnKqQGi