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Jamaica Broilers pumping US$20m into expansion of US facility

Jamaica Broilers Group, JBG, is expanding its Best Dressed Chicken US operation, a project that’s intended to get the poultry producer churning out double its current production capacity by mid-2023.

JBG has allocated a budget of approximately US$20 million split between capital expenditure and working capital for the expansion which is now roughly 75 per cent complete.

It’s the second phase of expansion works carried out by JBG since the acquisition of Gentry Poultry Company in 2019, the first of which got the company, which was later rebranded to the Best Dressed Chicken US, producing double its capacity as at acquisition.

Now, JBG wants to double that capacity again.

“It’s a continuation of our expansion strategy for The Best Dressed Chicken in the US. We wanted a steady expansion, not in a knee-jerk way, but a very slow deliberate expansion of the brand. We have positioned the Best Dressed Chicken as a mainstream brand in the US, which means that it’s not limited to the ethnic nor diaspora market,” JBG Senior Vice President Ian Parsard told the Financial Gleaner.

Today, the Best Dressed Chicken line is available in over 20 states in the US and is offered in tray and semi-bulk packs. Its customer base spans the wholesale broker market all the way through to high-end retail operations, Parsard said.

The expansion is primarily aimed at fulfilling demands from existing customers, but in the process, JBG hopes to acquire new ones.

“These customers like our products and wants to try our range of offerings. We are not looking at significant expansion of the product range at this time. We are going to be producing more chilled tray packs, that’s more of a premium line in the US than the frozen products,” he said.

The US continues to be a fast-growing market for JBG, contributing 44 per cent of group revenues at $76 billion for the financial year ended April 2022. The segment grew 42 per cent year on year. For the first quarter ended July 2022, it reported a segment result of $815 million, 40 per cent over the $580 million achieved in the comparative quarter of 2021.

JBG said the improved performance was primarily driven by the increased production and sales in the Best Dressed Chicken line of products, as well as increased feed sales.

The ongoing expansion of the US facility may very well be the final project for the facility over the short to medium term, Parsard said.

But over time, the company could place back on the table plans to acquire another US-based business to grow its US footprint. Those plans were placed on hold late last year after President and CEO Chris Levy told shareholders that JBG had backed out of a deal to acquire the assets of a US-based poultry processor.

The company was going after the assets of Simply Essentials Poultry Plant which closed operations in August 2021. The business, located in Charles City, Iowa was placed on bankruptcy auction.

Levy, while detailing events, said the process to acquire the assets of Simply Essentials was a “complicated one” which led to JBG pulling plans on that purchase.

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