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Spur Tree teams with Exotic Products in new joint venture

Published:Friday | May 15, 2015 | 5:00 AMTameka Gordon
Trevor Blake of Exotic Products (left) and Albert Bailey of Spur Tree Spices Jamaica, show off their new partnership agreement at the signing on Wednesday, in Kingston.

Spice and condiments manufacturer Spur Tree Jamaica has partnered with St Thomas-based agro-processor Exotic Products Limited to form a joint-venture company, which will see the roll out of new products under the Spur Tree line and expansion of Exotic's contract-packing business.

The joint-venture company, which has not yet been named, will be owned 50/50 by the partners, Spur Tree Chief Executive Officer Albert Bailey told the Financial Gleaner.

He said Spur Tree would steer the management and operations of Exotic Products.

As the larger company, Spur Tree will further invest an initial $32 million in the joint venture, split between infrastructure upgrades and working capital in the first year. Bailey said adding more investments will follow as the venture gains traction.

Located in Danvers Pen, Exotic Products manufactures ice cream mixes, pie fillings as well as seasonings and sauces out of its 13,400-square-foot factory.

It originally began operations in 1991 but reorganised itself and was relaunched in 2000 with an expanded product range, including tinned ackee and callaloo for the export market and currently employs 50 full-time persons with 80 seasonal workers.

Under the arrangement, both plants will benefit from infrastructure upgrades as the companies move towards improved production to tap markets in Florida and Atlanta, Bailey said.

Spur Tree's own plant has seen upgrades with an additional 5,000 square feet added to meet the demand for more manufacturing and warehousing space through another $25 million earmarked for improvements to its plant, Bailey said.

The partnership will see the expansion of Exotic's contract packing lines with an emphasis on processing of fresh fruits such as Otaheiti apples, mangoes and guava, to create concentrates for other manufacturers.

The relationship between the companies began more than two years ago with Exotic contract packing ackee and callaloo for Spur Tree's operations.

"So what we are going to do is expand the operation of the plant beyond the ackee and callaloo that they are focusing on, to look at producing other items under the Spur Tree label, contract pack for other persons and also introduce new items under the Exotic label," Bailey said.

The companies will push exports of its puree seasoning blends or mash.

Spur Tree will also venture into farming under the agreement. The company plants to make use of 150 acres of lands owned by the principals of Exotic to plant onions, escallion and pepper, with an initial five acres of pepper to be cultivated. And it will also shift some of its production to Exotic's plant.

"What we are going to do is rationalise. Some things that we make here now, for example, pepper mash that we are doing for our own production, we will look at moving that up there," Bailey told the Financial Gleaner.

Spur Tree will continue its current arrangements with farmers who supply the entity with pepper and other seasonings for its production.

CEO of Exotic Products, Trevor Blake, says the partnership will open markets for Exotic's products, and that the company expects to double its current sales "in about three years".

With 84 per cent of its revenue now coming from exports, Spur Tree also expects to double sales each year, "at minimum", from the partnership.

tameka.gordon@gleanerjm.com