BRP will operate a fifth plant in Mexico, this time to build boats there – a division launched just under five years ago. This new complex could, in the long term, allow this division to cross the bar of the billion dollars of income, believes an analyst.
The project – which will see the light of day in Chihuahua, in northern Mexico – is estimated at 220 million and should result in the creation of 1,300 jobs in this country, where the manufacturer of Ski-Doo, Sea-Doo and Can-Am set foot in 2001, according to its website.
“Our absolute concern for innovation and the constant growth of the segment make this additional production capacity in order to launch products that will transform the navigation experience and to realize our business strategy for the marine group”, affirms the president of this division, Karim Give.
The start of activities is scheduled for 2025. This will be the fifth production site of the marine group, which was created in 2018 following the acquisition of Alumacraft, a manufacturer of aluminum fishing boats.
Annual revenue of 400 million
Among analysts who follow the activities of the Quebec multinational based in Valcourt, Martin Landry, of Stifel GMP, estimates that the Mexican factory of the marine group should allow the company to generate annual revenues of more than 400 million.
“The announcement suggests that BRP anticipates potential revenues well above its target of 1 billion for the financial year 2024, he wrote, in a note sent to his clients. A new factory portends new products to be rolled out over the next few years and demonstrates the company’s confidence in gaining market share in the marine industry. »
The company laid the foundations of its marine group through acquisitions. After Alumacraft, it got its hands on the pontoon builder Manitou in August 2019 before buying Telwater the following year. In North America, the pontoon niche represents a market of more than 4 billion, according to Mr. Landry. BRP’s market share is estimated at 10%, according to the analyst.
Last year, the company’s marine division generated revenue of $532 million, or about 7% of total revenue of $7.7 billion. For the nine-month period ending October 31, divisional revenue was $390.5 million.
BRP already builds personal watercraft, three-wheeled motorcycles, all-terrain vehicles and two-seater UTVs in Mexico. The factories are located in Juárez and Querétaro. According to Mr. Landry, production costs in this country are six to seven times lower than in Canada, which explains, writes the analyst, the choice of the manufacturer of recreational vehicles.
“In addition, the labor shortage observed in Canada and the United States does not seem to materialize as much in Mexico,” adds Mr. Landry.
On the floor of the Toronto Stock Exchange on Friday afternoon, BRP stock was trading at $105.88, up 65 cents, or 0.6%.
- Number of factories currently operated by BRP worldwide. The only plant located in Quebec is in Valcourt.