Flexible Solutions International said that shipping from its newly built Panama facility will commence in the first quarter of 2026, a move that will allow the company to bypass the 30‑58.5 % tariffs it has paid on raw materials imported from China for U.S.‑based export products.
The tariff range reflects the U.S. duties imposed on Chinese imports, which have fluctuated between 30 % and 58.5 % since the 2018 trade actions. By producing the bulk of its international sales in Panama, FSI will avoid these duties entirely, preserving margins that have been eroded by the tariff regime.
Fiscal 2025 was a transition year for the company. Q4 revenue rose to $9.10 million, up 3 % from $8.84 million in Q4 2024, while the full‑year total of $38.50 million represented a modest 1 % increase over 2024. In contrast, Q1 revenue fell 19 % to $7.47 million and the quarter ended in a $277,734 net loss, largely due to capital expenditures for the Panama plant and the retooling of the Illinois facility.
CEO Dan O’Brien explained that the 2025 results reflected the costs of building the Panama plant and the challenges of a weak agricultural market. He said the company is now positioned to shift nearly all international sales to Panama by the end of Q1 2026, freeing space in Illinois for higher‑margin food‑grade production and expressing confidence that 2026 will see a reversal of the 2025 downturn as food‑grade contracts ramp up.
Strategically, the Panama facility is a cornerstone of FSI’s pivot to the food and nutrition supplement market. Management has set a 2026 revenue target of $30 million from new orders, with an additional $25 million expected annually thereafter, and aims for a 2027 run rate of $50 million to $60 million in food contracts. The shift is expected to improve margin profiles once the Panama plant reaches full capacity and the food‑grade mix expands.
The operational milestone marks a significant step in FSI’s transformation plan. By eliminating tariff costs, unlocking Illinois capacity, and accelerating the food‑grade business, the company is positioning itself for stronger profitability and higher growth in the coming years.
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