Thu | Aug 16, 2018

Red Stripe commissions new export line

Published:Wednesday | December 20, 2017 | 12:00 AMSteven Jackson
Ricardo Nuncio, Managing Director of Red Stripe Jamaica, speaks at the launch of the Production Line 8 and LNG energy plant at the Red Stripe complex, Spanish Town Toad, Kingston on Tuesday, December 19, 2017.

Red Stripe Jamaica on Tuesday launched its new Production Line 8 that will grow the brewery's capacity to one million beers per day, powered by liquefied natural gas.

The new line will nearly triple the plant's capacity, totalled 375,000 bottles a day prior to the expansion. Production is presently at 376,000 bottles per day on average, Red Stripe told Gleaner Business.

Prime Minister Andrew Holness used the occasion to tout the latest LNG initiative by his government, saying Jamaica Urban Transit Company. JUTC, would begin testing the use of LNG to power its fleet of buses. He also hinted at the introduction of hybrid buses.

On Monday, "Cabinet approved the pilot project for buses to use LNG in Jamaica," Holness said at the commissioning ceremony at Red Stripe's complex in Kingston.

He disclosed the information within the context of Red Stripe's boast that the investment in the plant's energy reconfiguration would reduce carbon emissions equivalent to parking over 1,000 cars for a year.

Now you talk about this plant and the equivalent number of cars it will take off the road - well just imagine when we have a fleet of buses powered by LNG, and possibly electricity," Holness added.

Red Stripe's US$18-million investment in the new line is meant to grow distribution of domestic and international volumes for the company that was acquired by international beer giant Heineken in 2015. However, the beers rolling off Line 8 are all designated for Red Stripe's export market. Line 5 produces for domestic consumption.

The new Line 8 means the brewery can produce up to 26,000 cases per day or one million bottles of the Jamaican beer for the domestic and international markets.

"The challenge now is for our sales and marketing team to make it happen," said Ricardo Nuncio, managing director of Red Stripe Jamaica on Tuesday.

The company's top export markets are the United States and Canada, with two million and 700,000 cases in annual shipments, respectively. As at July 2017, the company recorded 15 per cent market growth in the American focus cities of Miami, Tampa, Orlando and Atlanta.

 

ROBUST BRAND BUILDING

 

"In early 2016, Red Stripe entered Australia, Dubai and Brazil and there's robust brand building in those countries. We're also moving to put down our roots in Africa and Russia, following successful testing," Nuncio said in a press release issued at the commissioning ceremony.

The beer plant, built in 2014, recently switched over from propane to LNG as its energy source. The LNG facility was developed for Red Stripe by American company New Fortress Energy. The switch is expected to save Red Stripe more than $110 million in energy costs in the first two years of operation.

"Red Stripe will be the model for the whole region to follow. By using natural gas, Red Stripe will save $43 million in the first year and $73 million afterwards," said Sam Abdalia, vice president project development at New Fortress Energy. Abdalia described the project as the largest of its kind in the Caribbean.

Line 8, which involved infrastructure changes and training for employees, took 12 months to complete. It frees up the existing production line to focus solely on domestic volumes and is designed to produce new Red Stripe Local and Dragon Stout in six-pack cartons.

steven.jackson@gleanerjm.com