Agro-processor Norsai Entreprise to boost production, grow product line
Tameka Gordon, Business Reporter
After seven years in business, agro-processor Norsai Enterprises Limited is getting ready for its next big step - year-round production from its base in Poorman's Corner, St Thomas.
The company has already secured loan financing from the Development Bank of Jamaica to increase output of grocery items, and is already eyeing some 36,000 businesses nationwide to deepen its markets, as well as increased business from products packaged under contract for foreign clientele.
As it reorganises, Norsai also plans to reclaim control of its own distribution, previously outsourced to an unnamed partner.
The $30-million loan from DBJ will allow the company to begin manufacturing year round at its 28,000 square-foot plant at the Yallahs Industrial Complex, double its staff, and add products to its portfolio, says the company.
Established in 2009 by Mohammed Islam, the agro-processing company produces canned ackee, callaloo, frozen roast breadfruit and herbal teas which it exports to the United Kingdom, Canada and the United States. The name Norsai is a contraction of Islam's middle name and his wife's first name.
"Our main products are ackee in can, and callaloo, and we do herbal teas like cerasee, peppermint and lemon grass," Islam told Sunday Business.
Norsai will add canned carrot juice and mango juice to its line for the Jamaican retail market, with raw material sourced locally, he said.
A line of food items - baked and butter beans, cooking oil and ketchup, among other things - are to be added to the company's portfolio, but these will be sourced from overseas for local distribution, the businessman said.
"The $30 million from the DBJ will actually be going towards our working capital because we have just actually started our own distribution on the local market," said Islam.
"For the local market, we are trying to push mostly the juices and the ketchup, even though the market is very competitive - but the volume is there," he said.
To this end, the company has bought five Hiace buses to distribute its products into corner shops and mom-and-pop stores in the rural areas of the country, as it seeks brand penetration.
"From our research, there is almost 36,000 country shops across Jamaica so we are targeting them," he said.
Norsai will seek first to penetrate St Thomas, St Mary and Portland with its newly added grocery line and juices before extending to other parishes, he said.
The company will have two brands on the market. The grocery items will bear the Norsai label while the juices will be distributed in partnership with Pran, a brand from Bangladesh that Norsai Enterprises has inked a deal with, Islam said.
"Pran already has fruit juices which they want us to distribute here. Anything I make in juices will be under the Pran brand," he said, adding these will also be aimed at the local market.
The company is also fielding interest from another local company it currently supplies, to produce a carrot juice product for that label, he said.
Regarding the company's ackee and callaloo products, "95 per cent of what Norsia produces goes overseas. The other five per cent is sold to the north coast hotels," Islam told Sunday Business.
Contract packaging, or co-packing, "will always bring in more revenue but I believe in the next 18 months, revenue will be split 50/50 between our businesses," the businessman said.
The company produced some 24,000 cases of ackee last year and is looking to more than double its sales within the next 18 months, Islam said, helped by the $30-million DBJ Voucher for Technical Assistance loan.
"We focus a lot on ackee because it is our cash cow," he said.
The drought, as well as Jamaica's wobbly economy, has curtailed Norsai's operations, however. These factors were influential in the decision to diversify the company's product line, said Islam.
"We can produce about 40,000 to 50,000 cases of ackee but the problem is sourcing the raw material. We don't get a lot of any of the raw material we need. We could do a lot more because the market is there overseas," he said.
He said the company will not export any of the new grocery items in its line "because we will not be able to compete on the overseas market", but will continue with its mainstay products.
Prior to the injection of the DBJ loan, Norsai spent close to $6 million for a fruit pulper machine and a homogeniser to prepare for the addition of its juice line. "With the equipment and the working capital, we can work all around the year," said Islam.
The addition of the new products and ultimate increased production will see the company keeping its 70 staff members on for the year, instead of the seasonal employment it offered. Islam adds that the company sometimes employs up to 140 staff at the height of production.
A native of Bangladesh, Islam came to Jamaica to visit family members but was enticed to stay by the prospect of setting up his agro-processing company.
With an already established background in agro-processing and a master's degree in applied chemistry, he set up shop in St Thomas and eventually bought the current home of the factory from its previous owner.
The large, single-story complex sits on 9.5 acres of land but Islam has chosen to buy raw material from local farmers instead of growing his own crops.
The plant space is also not fully utilised. It includes an unused cold-storage room that Islam says he has no immediate plans to commission because of the high cost of energy.
"I learn from other successful people, and if we follow the model of these successful people ..., then we too will grow," he said.