Jamaica Broilers acquires feed mill in the US
Jamaica Broilers Group, JBG, has acquired a feed mill in the United States through a foreign subsidiary that will add US$65 million to its annual turnover, the company said.
The price of the transaction was not disclosed.
JBG Vice-president of Finance Ian Parsard indicated that the acquisition would be accretive, that is, it would grow the company's net earnings.
"As we continue to grow our operations in Jamaica, USA and Haiti, this acquisition is a strategic step for our US operations," said Parsard. "In addition to the strategic benefit, the acquisition of the mill will result in increased revenues and profitability for the company," he said on Wednesday. The US$65 million, which converts to more than $8.9 billion, would grow JBG revenue by about 18 per cent from its current base of $48 billion.
Jamaica Broilers took control of Crystal Farms Mill in the US state of Georgia on Monday. But JBG subsidiary Wincorp Properties Inc is still finalising the execution of an asset-purchase agreement with the former owners, inclusive of the feed mill and associated holdings in Georgia.
The mill produces 5,000 tons of grain per week and employs 30 persons.
"We are adding a feed mill to the existing breeder operations, which produce fertile hatching eggs, and hatchery operations in Iowa and Pennsylvania. The primary synergy is the control over the feed supplies required for our existing breeder operations located in north and south Georgia. The acquisition of the mill gives us more options to expand at a pace under our direct influence," he said.
Jamaica Broilers' American operations represents 30 per cent of the group's sales.
The US makes the second-largest contribution to group sales and profit. But the company said that market is on the rise, both organically through increased sales of its products, as well as through acquisitions.
The US operations made a $1.4-billion profit on $15.1 billion in sales for the April year end 2018 versus $1.3 billion on sales of $13.8 billion a year earlier.