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Nestlé Jamaica exits manufacturing in deal with Musson Jamaica

Published:Friday | November 20, 2015 | 11:00 AMNeville Graham

By year end the Musson Group, through its wholly owned subsidiary, Musson International Dairies Limited, will take full control of the dairy operation of Nestlé Jamaica.

The terms of the transaction were not disclosed.

The deal will see Musson acquiring Nestlé's Betty condensed milk and Supligen food drink brands, as well as the manufacturing and distribution facilities at the Bybrook factory in Bogwalk, St Catherine.

Separate releases from both companies indicate that approximately 130 persons employed at Bybrook will be offered employment in the new operation with substantially the same terms and conditions.

Meanwhile, Nestlé Jamaica will phase out the Milo repackaging process at Bybrook by the end of 2015, moving to a full importation model for the product. Nestlé says a social plan, including counselling, training courses and financial planning, will be offered to the 10 employees affected in that unit.

The Swiss-owned company says the deal with Musson ends its manufacturing operations in Jamaica but that it would continue to operate locally. Its focus will be on the marketing, sales and distribution of Nestlé's international brands Milo, Maggi, Nescafe, Nesfruty, Coffee-Mate, Nestum, Cerelac, Klim, Carnation and Gloria.

Nestlé Jamaica's head office will move from New Kingston to an industrial complex at Six Miles in Kingston by the end of 2016, which will also serve as its distribution hub.

The company said it has signed a letter of intent "to establish and formalise" the new complex as its operating base.

Musson Jamaica is a privately owned diversified conglomerate with interests in manufacturing, consumer products, telecoms and technology. It has operations in more than 30 countries in the Caribbean, Central America, Europe and the Pacific. Chairman Paul 'PB' Scott took over the reins of the company after the death of his grandfather in 2009.

Since its formation in 1962, Musson has seen growth from its own operations and by acquisition. Its businesses include T. Geddes Grant and Facey Commodity, as well as major stakes in listed companies Seprod Jamaica and General Accident Insurance.

Deputy Chairman and CFO of the Musson Group, Dr Nigel Clarke, emphasised continuity for the dairy acquisition.

"We are very optimistic about the acquisition of such a great business and while we plan for continuity in the operations, we look forward to pursuing the opportunities for product development, growth and expansion," he said.

Musson will be looking outward for opportunities for the acquired brands.

"We believe that the export potential of the brands, beyond Caricom, is significant. Within the seller's international system, these opportunities may not have been considered material for their larger overseas affiliates," Clarke said.

"For us, however, these opportunities are of interest. We therefore intend to leverage our distribution network, inclusive of our networks derived through partnership, to maximise the potential of the brands in non-Caricom markets," he added.

neville.graham@gleanerjm.com