Thu | Aug 22, 2019

Tropical Battery pumps $60m into new Ferry HQ

Published:Wednesday | June 26, 2019 | 12:29 AMKarena Bennett/Business Reporter
A graphical representation of the Tropical Battery headquarters being developed at the Kingston 876 complex in Ferry, Kingston.
A graphical representation of the Tropical Battery headquarters being developed at the Kingston 876 complex in Ferry, Kingston.

Battery distributor Tropical Battery is pumping about $60 million into what will soon be its new headquarters at the Kingston 876 commercial complex in Ferry, Kingston.

The new location – which spans 1.7 acre of which 25,000 square feet will be used for the building – forms part of strategic plans by the 69-year-old company to more than double growth over the next 10 years.

Vice-president for sales and marketing, Daniel Melville, told the Financial Gleaner that Tropical Battery has budgeted $35 million in leasehold improvements and furniture costs for the new headquarters. The other $25 million was used to purchase and install a 120-kilowatt solar-energy system which is expected to cut Tropical Battery’s electricity bill by $500,000 per month.

“Tropical Battery has outgrown its current warehouses, and we need more space as we plan for growth over the next 10 years. We are looking forward to cutting the cost of some overheads. This new location will bring senior management, warehouse and retail under one roof,” Melville said.

The facility will be open to the public come October.

Tropical Battery will merge its corporate office and two warehousing operations on Ashenheim Road, Kingston, into one operation at Kingston 876.

Currently, Tropical Battery occupies a two-storey building at 14 Ashenheim Road, which holds its corporate office and warehouse space, while across the road at 15 Ashenheim Road, it has another warehouse space and a retail outlet.

“We have to pay double the expenses for things such as light bill and security,” Melville said.

The operation at 15 Ashenheim Road will remain open for business after the relocation until the company can assess the impact of the overpass at Portia Simpson Miller Square, commonly referred to as Three Miles, on its business.

While Tropical Battery looks to enhance operational efficiencies through the relocation, the company is also focused on expanding its distribution business in Jamaica.

Last year, it expanded its battery portfolio with the introduction of Tropical Battery-branded alkaline batteries manufactured on its behalf. The products were rolled out in AAA, AA, B, C, D, and 9V sizes.

“It will also effectively keep us close to our core of energy storage,” Melville said in reference to the business which started as a manufacturer of lead acid storage batteries following its acquisition from American businessman Tex Williams by John Melville in 1967.

Tropical Battery has also responded to demands for greater levels of sophistication and a wider range of batteries for motor vehicles with the launch of lithium-ion batteries for hybrid and electric vehicles. Melville added that the company has expanded into the lubricants market with its brands of API-certified oils specially formulated for Jamaican roads and climate.

“We started about six months ago with the lithium-ion batteries, and sales are growing. We doubled sales of our alkaline batteries in 2017-18, and for the year 2018-19, we are projecting 70 per cent growth,” he told the Financial Gleaner.

Tropical Battery will be hiring an additional 10 people at the Ferry complex, bringing total staff to 120.

The relocation will result in the company having six branch offices – 15 Ashenheim Road, Grove Road and Ferry in Kingston; 6 Villa Road in Mandeville, Manchester; Catherine Hall Trade Centre, Montego Bay, St James; and Coconut Grove, Ocho Rios. Tropical Battery also has a network of over 1,000 dealers and distributors across the island.

Melville says the company expects that the new Ferry headquarters will bring additional business to the company due to its strategic location off the Mandela Highway.

Developer of the commercial complex, Fredrik Moe of Cascade Group, similarly believes that the overpass that connects the development to the Mandela Highway will serve as a sweetener for potential investors looking for commercial space on the outskirts of Kingston.

“It will place us at the most important point for islandwide distribution as both the East-West and North-South highways join close by. It is also very close to the port and takes us out of the congestion of the city,” Melville said.

karena.bennett@gleanerjm.com