Sun | Oct 25, 2020

CPJ expanding retail footprint outside Jamaica - Beverage line, food division upgrades on tap for MoBay

Published:Wednesday | February 20, 2019 | 12:00 AM

Caribbean Producers Jamaica, CPJ, has opened a store in St Lucia, marking the expansion of its retail footprint outside Jamaica for the first time.

And there’s more to come, said CEO David Lowe in an interview with the Financial Gleaner.

The outlet, although relatively small, at 10,000 square feet, represents the company’s attempt to grow revenues outside of supplying goods and services to hotels.

Lowe did not disclose the size of the investment but said the retail outlet in St Lucia would be more akin to a mart than the CPJ Market complex that the company owns at Lady Musgrave Road in Kingston, which holds a mart, offices, a deli, a bar, a café and restaurants.

He said that the CPJ group will focus on growing its retail outlets outside of Jamaica and will focus mostly on distribution in its home market to avoid competing with retail supermarket chains.

Inside Jamaica, a large warehouse project that has now been commissioned is to be followed up with additional investment in the company’s manufacturing operations.

The outlet in St Lucia opened in December and comes as the company recorded slowing sales and lower net profits in its second quarter. CPJ made US$29.4 million in gross revenue, or about US$100,000 less than a year earlier, while after-tax profit plunged to US$165,000, down from about US$1.2 million a year earlier.

Hospitality trade

Currently, the bulk of CPJ’s revenue comes from distributing to the hospitality trade, particularly in Jamaica. But CPJ doesn’t disaggregate its hospitality earnings from its retail or distributive earnings.

Lowe said the slowing sales for the December second quarter came from disruptions to its supply chain due to the write-off of its new Information Technology (IT) platform in the first quarter. The company also had to contend with spoilage from juggling the over 100 containers that CPJ clears from the wharf monthly. Also, during the quarter, protein sales were affected by what CPJ called inequitable competition in the trade from under-invoicing of taxes and duties.

The company wrote off the new IT system, which sputtered at implementation. It was meant to integrate CPJ’s three operational sites in Miami, Florida; Montego Bay, Jamaica; and St Lucia. The US$700,000 hit contributed to its first-quarter net loss of US$1.2 million.

Still, Lowe cited the increased strength of the CPJ balance sheet, at US$38 million in total assets, as evidence of the company’s resilience and long-term defence against the dips in profit.

Last week, CPJ commissioned its new 56,000, square-foot distribution centre in Montego Bay, which cost US$4 million to construct and equip and gives the company the capacity to grow sales.

“It allows for scalability,” said Lowe, who also says he expects one-third savings in energy costs from the facility.


“We will invest, in the next financial year, to upgrade our manufacturing equipment,” he added, saying that that project would include upgrades to both the beverage line, which focuses on concentrate drinks, such as ­daiquiris, and its food division, which sells items such as pork and bacon.

Lowe declined to comment on the capital expenditures for the new projects, saying the CPJ board is yet to approve the plan.

As to whether the company plans to upgrade its legacy system or invest in new software, Lowe said CPJ has landed on a solution, which he would not disclose.

“I’d rather not say because ­competitors are listening,” he said, while noting that the company expects to recover lost ground in the second half of the CPJ’s financial year ending June.