Mon | Oct 26, 2020

JWN exiting short-lived Jamaica Gold partnership - Worthy Park to take full ownership of retail sugar brand

Published:Friday | August 28, 2020 | 12:22 AMNeville Graham - Business Reporter

Gordon Clarke, managing director of Worthy Park Estate Limited.
Gordon Clarke, managing director of Worthy Park Estate Limited.

Jamaica’s oldest sugar estate, Worthy Park, will take full ownership of the rights to the Jamaica Gold brand once the terms are agreed with Appleton Estate, a subsidiary of J. Wray & Nephew Limited, JWN, which is exiting the market.

It ends a partnership in retail sugar distribution that is less than a year old between two estates that have been around for two to three centuries.

The companies purchased the brand from sugar marketer Jamaica Cane Products Sales, JCPS, in 2019, while it was winding up the business after descending into losses, having lost its marketing monopoly for sugar as the sector decentralised.

At the time of the acquisition, Worthy Park Estate already had its own sugar brand on the market under the estate’s name.

“Appleton and Worthy Park purchased the brand Jamaica Gold from Jamaica Cane Products Sales, as the last two beneficiaries of it. At Worthy Park, we’ve not been utilising the brand, but Appleton has been doing so,” Managing Director of Worthy Park Estate, Gordon Clarke, told the Financial Gleaner this week.

The price of the acquisition was never disclosed. JWN and Worthy Park, which were 50:50 partners, also declined this week to disclose the price at which Worthy Park is buying out JWN.

Under the partnership, Worthy Park, which operates from St Catherine, packaged Jamaica Gold using sugar supplied for the purpose by Appleton Estate, whose sugar plant is located in Siloah, St Elizabeth.

JWN Managing Director Jean-Philippe Beyer says the arrangement will continue until Appleton’s stock of sugar is used up.

“When that happens, ownership of the brand will transfer to our partners,” Beyer said, without giving a timeline, except to say it was dependent on market conditions.

Worthy Park began bagging Jamaica Gold sugar for Appleton Estate at the top of the year.

“We bagged sugar in 50kg bags for them. It was only in January that we started packaging; before that it was done by contract packagers,” he said.

Packages of that size are categorised as bulk sugar, but Jamaica Gold is on retail shelves in small packages ranging from one to five pounds in size.

Worthy Park intends to continue retailing sugar under the Jamaica Gold name alongside its Worthy Park sugar. Clarke says the company foresees no problem with the two brands co-existing.

“Since we have the rights, we will be taking over ownership of the Jamaica Gold brand,” he said. “It’s better to have two brands on the shelf rather than just one. Other persons do that,” he added.

Before sugar distribution was decentralised, Jamaica Gold controlled the retail market. Now, a number of brands line the grocery shelves, including Worthy Park, Grace, Hi-Lo store brand, NuPak, Eve, Golden Grove, Delect and others.

Jamaica Gold had also been off the shelves prior to its acquisition by the two old estates, which Clarke says makes it difficult to estimate market share.

For the 2019 crop Appleton produced 10,431 tonnes of sugar, which amounted to 18 per cent of the industry total of 59,025 tonnes reported by Sugar Industry Authority CEO George Callaghan.

Clarke says Worthy Park produced 22,319 tonnes. The only other entity producing sugar is Frome Estate in Westmorland, which is owned by Chinese producer Pan Caribbean Sugar Company.

JWN, whose primary business is rum production, announced the lockdown of the Siloah-based sugar factory in July, resulting in 370 job cuts. The company, which is owned by Campari Group of Italy, said the decision followed reported annual losses of US$12 million on its sugar production operations for over a decade.

For the near term, the sugar cane still in the ground at JWN’s estates in St Elizabeth and at New Yarmouth, Clarendon, plus cane that would have been supplied to the estate by independent farmers, will be distributed to other factories for crushing as the cane is reaped.

“They’ve been crushing as much cane as they could down at Appleton, and now that they’re out, most of it will go to Frome. The cane out of New Yarmouth will probably come to Worthy Park,” Clarke said.

He is expecting about 30,000 tonnes of cane to come from New Yarmouth out of the 2020 crop.

Worthy Park has long held the reputation of being Jamaica’s most efficient sugar producer. Its tonne-cane to tonne-sugar, or TCTS ratio, was 8.7 last year. The lower the ratio, the higher the quantity of sugar that emerges from the factory.

Clarke says he is not expecting similar yields from New Yarmouth, but that a TCTS ratio of 12 from that crop should produce about 2,500 tonnes of sugar.

neville.graham@gleanerjm.com