Wallenford, Mavis Bank combine some operations
The sales and administrative functions of Mavis Bank Coffee Factory, which is based in the rural hills of St Andrew, are now carried out from the complex of sister company Wallenford Coffee in Kingston.
The two companies have also combined their procurement teams to handle the purchase of green beans in the Jamaica Blue Mountains.
The search for synergies in the coffee operations ultimately controlled by Michael Lee-Chin includes the sharing of warehouse space and some staff functions, and aims to cut operating costs and save on energy amid a general decline in market demand for coffee.
Mavis Bank now operates its accounting, sales and e-commerce departments at Wallenford's head office at Marcus Garvey Drive in the industrial belt of Kingston.
The process started just a few weeks ago and continues to evolve, Mavis Bank CEO Norman Grant told the Financial Gleaner.
His operation also utilises Wallenford's warehouse to hold its roasted beans. Grant said that all manufacturing operations will continue at Mavis Bank in the Jamaica Blue Mountains.
Mavis Bank produces some of the largest quantities of Jamaica Blue Mountain coffee. Its green beans carry the factory's name, while its roasted beans are branded as Jablum.
NO PLANS TO MERGE COMPANIES
There are "no plans", at least not currently, to merge both companies or manufacturing operation, Grant said Monday.
The Mavis Bank CEO operates from the company's St Andrew base, but he visits the Wallenford offices on occasion.
"Both companies are operating as separate companies. There are areas of synergies that will not compromise the arms length operations," said Grant. "I can't speak to the future but all I am saying is we had to make redundancies to make the operations leaner. There are some areas of the operations that are overseen by a smaller team," he added, citing procurement as one of those areas.
Wallenford's roasting operations were temporarily relocated to Mavis Bank in September 2016, after flood rains drowned its complex, but Grant said the arrangement ended around six months ago. He said keeping the roasting operations separate was important for distinguishing the Wallenford and Jablum products.
Mark McIntosh, who heads Wallenford, did not respond to requests for comment.
Earlier this month, Grant said some positions were made redundant at Mavis Bank in an effort to rightsize the business in a period of reduced demand from Japan, its main coffee export market, and a fall-off in prices from US$60 a kilo to as low as US$30.
Grant also commented that no conspiracy exists to shutter Mavis Bank, which has been a concern of some workers.
Lee-Chin acquired Wallenford in 2013 and Mavis Bank in 2016. Together they account for just over half of the Jamaica Blue Mountain coffee assets.
In late 2016, Specialty Coffee Investments Company Limited, the vehicle used by Lee-Chin to buy Mavis Bank, sought $1.8 billion from a bond issue to refinance debt and improve the cup quality at the factory acquired from partners PanJam and Jamaica Producers Group. The bond matures December 2019.