Jamaica Broilers enters new markets, sees rising demand for processed foods
Jamaica Broilers Group Limited, JBG, entered six markets in the past year and is now looking towards both its regional and US segments to drive growth for the poultry company, notwithstanding logistical problems faced in exporting to new Caribbean markets.
Its new markets include Cayman Islands, Turks & Caicos Islands, Anguilla, Barbados, British Virgin Islands, St Martin and St Maarten. More recently, in the first quarter, it also started exporting to Trinidad & Tobago, as disclosed Wednesday at the company’s annual general meeting.
The foray into new markets comes amid the expansion of production capacity in the United States, a project that cost the company US$20 million and contributed to the near tripling of funds invested in the business last year, and the near $200-million expansion of the Cumberland hatchery, which was commissioned in May.
Groupwide, Jamaica Broilers’ capex spending climbed beyond $8.7 billion from $3.1 billion in FY2022.
The expanded Best Dressed Chicken US processing plant in South Carolina, opened six months ago, in February, and currently produces over 600,000 whole chickens per week, with capacity to grow, the company said.
Jamaica Broilers President & CEO Christopher Levy reported to shareholders on Wednesday that the plant was now at 85-90 per cent capacity.
“Volume ramped up quickly. It doubled the capacity of what we bought,” he said. JBG acquired the poultry operation, then known as Gentry Poultry Company, in 2019.
As to the newest markets: “We have sent a couple of trailers to Trinidad & Tobago,” said Levy. “The opportunities which we see for export in the region is encouraging. Logistics is difficult, but the reception of the products has been very encouraging. We are able to offer a suite of products to supermarkets, including chicken wings and more. It has been encouraging,” he kept asserting.
During the year, Jamaica Broilers cut its losses and exited the Haiti market, where political strife and natural disasters continually hobbled the operations there.
The group’s other Caribbean markets delivered revenue of $806 million, a three per cent increase over the prior year.
“Pulling out of Haiti, we have written off $1.1 billion, [but] we have still had the best year in history,” said Chairman Robert Levy. “Revenue this year was $91.3 billion and net profit the highest yet,” he said. Annual earnings rose 39 per cent to $4.29 billion.
Chris Levy, who is the son of the chairman, added that it was “a very dynamic” period for the group.
“We spent a lot of effort getting our loading bay up and running. It has helped greatly with logistics in Jamaica,” he reported.
JBG runs two vertically integrated poultry operations based in St Catherine and South Carolina. Jamaica remains its hottest market with annual revenue of $59 billion, but the US has been making big strides, with revenue nearing $33 billion.
Jamaica also contributes the most to operating profit, $7.57 billion, which doubled the US contribution of $3.79 billion.
Meanwhile, in Jamaica, the company is seeing growing demand from the quick service, food service and tourism sectors for processed foods.
“We spent a lot of time and money developing further processing products, resulting in a 51 per cent increase. The pipeline is quite exciting. We do all of this in bulk packing, so it gets into the food service and hotel market as well,” he said.
Product upgrades included the Hamilton’s Smokehouse line of deli slices, featuring the same product weight but more slices, from seven to 10, per pack.
The company is also collaborating with quick-service restaurants to tailor products to individual flavour profiles and menu requirements of their customers. Within this market segment, KFC remains JBG’s largest client, Levy said.
The company’s annual report also mentioned “significant wins” that included an agreement reached with the operators of Wendy’s to produce their chicken nuggets. It also provides a deboned chicken breast for the KFC sandwiches.
Jamaica Broilers core business is poultry, but it also produces other meat products as well as animal feeds.
The group’s primary product, chicken meat, increased sales by 21 per cent during the year.
The pig and layer segments are expected to grow for small farmers and the company, it was noted, as the hospitality sector continues to expand and local consumption of pork and table eggs remain on the rise.
Concomitant with its expanding activities, the company, which had assets estimated at $79 billion at the end of the July first quarter and is now operational in multiple markets, adopted new articles of incorporation at Wednesday’s meeting.
“With the developments in the US and the additional subsidiaries and the company in eight different jurisdictions, it is necessary to develop new articles,” Chairman Levy said.