Jamaica Broilers to invest $730m on capital projects, banking on US for growth
The Jamaica Broilers Group (JBG) has budgeted $730 million for capital programmes this year, less than half of its investments last year, but in line with the previous period.
Jamaica Broilers President & CEO Christopher Levy said $250 million was spent this year on a pellet mill in the United States and $480 million on a spiral blast freezer, to be installed by the end of November.
In the previous financial year, the poultry group's capex amounted to $1.97 billion, most of which was spent on acquiring a hatchery in the US - a market that the Jamaican company is focused on to grow its operation.
"You cannot have your cake and eat it too, but let me tell you something, we are responsible to fight for our own. The US is going to fight for their own," Levy declared to shareholders in his address at the JBG annual general meeting held at the McCooks Pen headquarters on Wednesday.
"The US producers are going to say, I want that market; so you have to fight for our market, and we have been doing it for 60 years," he said.
He then called on shareholders to join the campaign to support the local poultry industry.
"You have got to fight for your country and stand up and fight, or you are going to lose it. And we will look back and say, we never fought hard enough," he charged the roughly 150 shareholders at the meeting.
Last year, ending April 2018, Jamaica Broilers increased its turnover by nearly $4 billion to $48.28 billion, but reported a dip in net profit from $2.27 billion to $2.02 billion, due to currency movements and the acquisition costs of purchasing a property and equipment in the US.
In the subsequent quarter ending July, group revenues improved by six per cent to $12.2 billion, while net profit doubled from $212 million to $413 million.
The Jamaica operations reported a strong first quarter of $842 million, which was $392 million, or 87 per cent, above last year's $449-million contribution to group operating profit. But 'Other Caribbean' operations did even better as a block - increasing their share of operating profit from $75 million to $847 million, amid a tripling of assets in that geographic segment to $6 billion.
Levy indicated that the Jamaican market may be peaking.
"Let us face it, the ability for us to grow in Jamaica is limited but that's not the same in the USA," he said. "There is no dream that as shareholders we cannot have in the USA."
The group made $34.3 billion in sales from the Jamaican market, 15.1 billion from the US market, and $2.8 billion from other Caribbean islands in its last financial year.
"We have got to maximise our cash cows. We've got to recognise that Hi-Pro and Best Dressed Chickens are cash engines that are going to help us achieve that growth and opportunities that we see in the USA," Levy said.
Jamaica Broilers hatches some four million birds per week across its five hatcheries in different markets - two in the US, two in Jamaica and one in Haiti. "That's not a small operation," Levy declared.
During the first quarter, the company's US operation avoided hurricane damage, a lucky break for the company in a market where one of its competitors lost one million chickens. JBG lost no birds, said executives.
Levy indicated that the outlook for the group remained positive, with divine prosperity.
"God is an integral part of this company. Don't take it for granted," he said. "We hold true to the tenants of the Lord Jesus Christ. It is a pleasure working here to work in an environment that knows what truth is. Fight for this country, and recognise the Lord Jesus Christ and accept him in your life," he declared.