Site logo

GK doubles down on water in deal for Unibev

GraceKennedy Limited has signed an agreement to purchase 100 per cent shareholding in beverage company Unibev Limited, an advancement on the deal it struck two years ago with the company to acquire the 876 spring water brand.

The announcement of the transaction, the cost of which was not disclosed, follows on other disclosures by the food and financial services conglomerate that it recently expanded its distribution partnership with Swiss-owned Nestl? Jamaica.

Both deals will serve to deepen the food trading side of the group’s operations, but the Unibev acqusition is also expected to take GraceKennedy into a new area of the beverage market – production of flavoured water.

Group CEO of GraceKennedy Don Wehby also disclosed that a tetra pak plant was under consideration for the Unibev site in Portland, but as to what products are to be packaged there, that remains vague. However, he said he was due to receive a report on the feasibility of the plant within a few weeks, which would determine the next steps.

GraceKennedy expects to take full control of the Unibev business from current owners Shane Brown, Anthony Brown and Tamara Phang, by mid-September.

The acquisition follows the takeover of Catherine’s Peak Bottling Company Limited from Spike Industries Limited in February, when GK doubled its interest in the Catherine’s Peak water bottler from 35 per cent to 70 per cent.

It’s also one of three “sizeable deals” that GraceKennedy Group CEO Don Wehby said the conglomerate would close on during this year, one of which is a provider of financial services operating outside Jamaica. The companies are part of a pool of approximately 11 prospects that GK’s M&A unit is targeting.

Regarding Unibev: “We have already signed the share purchase agreement which is binding, so now we are doing further due diligence,” said Wehby.

“There are some closing conditions that we have in the share purchase agreement, but I expect GraceKennedy to be running the plant in another four to six weeks,” he told the Financial Gleaner.

The transaction places GK in an even stronger position within the Jamaican spring water market. It’s planning to introduce new sizes for both brands, Catherine’s Peak and 876, and is preparing to enter the flavoured water market under the 876 brand.

Unibev procures and packages water at a factory in Spring Garden, Portland. GraceKennedy has been in partnership with Unibev since 2017, first as distributor of 876 spring water through GK subsidiary World Brands Services, then later as owner of the brand, which Unibev continued to produce under contract.

Wehby said Catherine’s Peak spring water has also had a relationship with Unibev, for several years, as producer of its five-gallon water. That relationship will continue under GK’s full takeover of Unibev, he said.

“We have a fully integrated spring water strategy. We have the water source, the bottling plant, and we own the brands. What we are focused on now is sustainable growth and innovation, and we are looking at flavoured water and the potential for export of 876 water, since its a growing brand in Jamaica,” Wehby told the Financial Gleaner.

“We are also considering setting up a tetra pak plant on site,” he added.

“I have asked my team to do a feasibility study and business case for tetra. I expect that will be presented to me in a few weeks. We will then determine the next steps,” he said.

The 101-year-old conglomerate currently sells Grace coconut water in one-litre tetra pak size on the international market, mainly in Canada.

Once the acquisition of Unibev is complete, it will become GK’s sixth manufacturing facility in Jamaica.

As for its expanded arrangements with Nestl? Jamaica, GraceKennedy’s World Brands will market Milo, Nescaf?, Nesquick, Nestum, Cheerios and Nature’s Heart Almond Milk, among other products.

The non-exclusive arrangement comes three years after Nestl? inked a co-manufacturing arrangement with Diary Industries Jamaica, which is a joint venture between GraceKennedy Limited and Fonterra of New Zealand.

Since 2020, Diary Industries has been producing processed cheese, yoghurt, and powdered whole milk under the Nestl? Everyday brand, marking Nestl?’s re-entry into the powered milk business.

Wehby said the arrangement was one of several advances the group has made since the start of the year.

In an update of some of its dealings, GraceKennedy said in its second-quarter earnings report that it has completed the acquisition of Scotia Insurance Caribbean Limited, now rebranded GK Life, and recently received regulatory approval to begin operating in St Maarten, which will add a 13th market to that business by the end of this year.

Earlier this year, subsidiary GK General Insurance formed an alliance with the Scotia General Insurance Agency, and is now the underwriter for the ScotiaProtect platform.

Meanwhile, GK Money Services is expanding GK’s Jamaican remittance business through a partnership with Unicomer Jamaica Limited under which the services of Western Union will be available throughout the Courts furniture chain.

As for its money services business segment, GK says it continues to add new features and customer touch points to the GK Mobile One app.

“These are just some of the strategic initiatives our team have been pursuing, as we work towards achieving our 2030 vision,” Wehby said, in reference to the company’s goal of becoming a global consumer group.

For the second quarter ending June, GK reported earnings growth of seven per cent to $2.2 billion on revenue that grew at a similar pace to was also flat at $39 billion. For the half-year, earnings rose 13 per cent to $4.5 billion on revenue of $78 billion.

Read More


  • No comments yet.
  • Add a comment