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JP bets on cold-pressed tech to unravel fresh juice market in Europe

Published:Wednesday | July 1, 2015 | 12:00 AMCamilo Thame
Jeffrey Hall, chief executive officer of Jamaica Producers Group.

Jamaica Producers Group (JP) is betting on cold-pressed juice technology that will extend the shelf life of its fresh juices from a week to nearly two months.

Within the next three months, the company's Holland-based juice-manufacturing business, A.L. Hoogesteger Fresh Specialist B.V., will close out a $200-million round of investments-aimed at improving sustainable capacity and introducing two new ways to treat beverages.

Pulse electric fields treatment, which passes small currents through the juice to kill bacteria and high-pressure processing, which uses 6,000 bars of pressure, or the equivalent weight of all the water in the deepest trench in the Atlantic Ocean, to kill micro-organisms are going to be utilised to preserve the taste of juice while adding weeks to product life.

"Traditionally, the way to extend shelf life is to pasteurise, which essentially boils the juice and which changes the taste and destroys the nutritional value," said JP CEO Jeffrey Hall at the company's annual general meeting last Friday.

"By Q3 (which begins next week), this will be the only facility in the world that produces fresh juice and provides this range of treatments to allow for extended shelf life," he said.

Having a fresh-juice line which can be kept on refrigerators for months makes it much easier for JP to deepen its penetration into Northern Europe. Outside of The Netherlands, it has already established footholds in Belgium, Germany, Austria, and Sweden.

market expansion

Hoogesteger General Manager Michiel van 't Hek figures that the rest of Scandinavia is ripe for the picking, and France presents an opportunity for market expansion. But the cold-pressed juice factory might be a key to unlocking tremendous potential for coconut water, which is typically frozen or pasteurised.

"There are a lot of coconuts in Jamaica," he said.

JP's push to grow its business in Europe is complemented by initiatives to drive exports in the Americas.

Last September's acquisition of the other half its joint-venture holdings in a snack-manufacturing and distribution facility in the Dominican Republic helped push earning growth by 29 per cent in the first quarter of 2015, according to Hall.

It also supports efforts to grow its Monte Cristi brand in the Spanish language markets in the Caribbean and the United States.

While pushing its export sales, it has embarked on a three-year plan to reduce the number of sites from which it operates by 25 per cent.

"We want at the end of the three-year process to have at least 50 per cent of our sites operating with two or more of our business," said Hall.

A $40-million renovation and reconfiguration of its Cross Roads ripening and snack distribution facility is a centrepiece of the restructuring.

"This year, we will be breaking ground on the redevelopment of our JP commercial centre in Cross Roads," Hall said.

The facility will extend its operations from fruit and snacks to include head-office business and some commercial activities of Tortuga (the makers of rum cake) and its coffee business, and allow for phased expansion of those activities over time.

"We are expecting to see a material improvement in the operating expenses," Hall told Wednesday Business, while adding that "the project will require some restructuring, but I don't expect there to be a reduction in jobs".

JP is also in the process of restructuring operations at two of its other interests - Mavis Bank Coffee, of which it owns 50 per cent, and Four River Mining, of which it owns 49 per cent.

Mavis Bank, which sells the Jablum brand, took a beating last year when higher prices and lower supply of inputs resulted in an $83-million loss, compared with a profit of $9 million the year before. Four Rivers reported a $77-million loss last year, compared with $12 million profit in 2013.

"We acquired a 150-acre coffee farm with the objective of securing our supply business," said Hall, who expects to see 25 per cent of its coffee beans come from contracted, supported farms or own farms within three years.

The mining operations are being consolidated in St Mary after the venture decided to exit the Clarendon site and recommission its plant and equipment to the north coast.

"We will be able to produce a year-over-year increase of 25 per cent," Hall told Wednesday Business. He is projecting that the additional capacity at the St Mary site will be fully operational by the third quarter of this year.

"This will allow us to participate in the expansion of construction projects on the north coast.

JP's increased investment in Kingston Wharves is already paying off. The additional 12 per cent in the cargo handler, in which the food and logistics conglomerate now has a 42 per cent stake, coupled with a 40 per cent increase in the port company's profit, resulted in a doubling of JP's share of profit to $80 million in the first quarter of 2015.

But that means that share of profit from other associates and joint-venture companies fell year over year by 20 per cent to $23 million during the three-month period.