Jamaican Teas Limited, producer of Caribbean Dreams and Tetley teas, is acquiring a property at Temple Hall in the hills of St Andrew to execute its long-held plan to add new production capacity for the growing business.
The tea maker, which also produces soups and spices and other food items, says it will be investing $320 million in the acquisition and development of the property which spans 60,000 square feet of space on about three acres of land.
CEO John Mahfood expects to move into the new facility and ramp up operations there by the end of the year.
JamTeas has been hunting for additional manufacturing space since 2020. Its initial plan was to grow capacity at its current Bell Road, Kingston complex from 22,000 feet to 34,000 square feet, but later shelved that option. Instead, it redirected funds towards outfitting 10,000 square feet of space at the leased property on Montgomery Avenue for production of its soups and dry spices.
“We have outgrown both locations and so we had plans of expanding the Bell Road plant by another 10,000 square feet, but now we see where we need a much bigger location. The two locations combined are about 35,000 square feet and even if we increased it another 10,000 square feet it would not be sufficient,” Mahfood told the Financial Gleaner.
“We needed somewhere in the region of about 60,000 square feet that can keeping us going for another five to 10 years in one location,” he said.
The acquisition of the Temple Hall property is expected to be completed by November. The complex is large enough for Jamaican Teas to consolidate the Bell Road and Montgomery Avenue plants under one roof. But, there is one shortcoming: its distance from the port of Kingston. Around 60 per cent of its manufacturing revenue comes from export.
“It’s relatively far, but within Kingston and Spanish Town there is very little move in ready factory space available of that size,” Mahfood said of the Temple Hall facility. “The reality is that people will have to start looking outside of Kingston and Spanish Town for spaces to develop as the economy grows,” he said.
He added that the company also explored the acquisition of about five to 10 acres of land in Kingston or St Catherine, but was unsuccessful in finding a suitable property.
Still, Mahfood is upbeat on the future of the business, stating that any additional expense the company will to spend on travel will be offset by savings to be garnered from the consolidation of the two facilities.
“We have to be paying double amount for electricity, security, management and moving goods around from one location to the other. We haven’t run the number as yet, but just the rent and maintenance costs that we will save from the second location will make a significant difference,” he said.
Jamaican Teas plans to relocate its equipment and office stationery from the two locations over the Christmas period when the company takes it annual two-week break from production. It will give up the leased Montgomery Avenue facility, but Mahfood is still weighing the option of selling or leasing the Bell Road plant.
“We haven’t made that decision but we won’t be using it,” he said.