Jamaica Broilers sees spectacular growth in US output
Jamaica Broilers Group, JBG, has revealed that its US operations process about one million birds a month in that market, which represents growth of nearly 40 per cent during the pandemic when compared with a year earlier.
The poultry group earns about one-third of its profit from the US operation.
“We bought that plant in the USA about a year ago. At the time, we were killing about 180,000 birds a week, and now, we are up to 250,000 birds a week,” said Christopher Levy, president of JBG, in a Mayberry Investments Forum held online on Wednesday night. “That’s not only a big investment. It is a big achievement,” he said.
Mayberry CEO Gary Peart assumed the role of forum moderator.
Last September, JBG acquired Gentry’s Poultry in the United States, which marked the group’s entry into chicken production in that market. The price paid for the plant was not disclosed but was described as being less than 10 per cent of the group’s $15 billion in capital at the time.
The bulk of sales and profit still come from Jamaica, where Jamaica Broilers is the market leader, but Levy indicated that the prospects for growth more reside in the American market.
“We feel that the opportunity for Jamaica is just driving those efficiencies,” said Levy. “The growth of the company will come from the USA,” he said.
Jamaica Broilers earned $382.6 million in net profit for its first quarter ending July, up 6.0 per cent year on year. Its revenues dipped to $12.6 billion from $13.3 billion a year earlier. The increased profit came from efficiencies and also a rise in ‘other income’ sources, according to the financials.
Levy explained that early curfews have negatively affected fast-food outlets, restaurants, caterers, and cookshops, leading to lower poultry sales. He said that a 9 p.m. curfew would dramatically increase demand when compared to the existing 8 p.m. curfew. That is because it would allow for dinner purchases.
Executive Chairman of Mayberry Investments Christopher Berry added that an 8 p.m. curfew results in the food and beverage subsector missing out on even the 6 p.m. crowd because they have to release their workers early so that they can beat the curfew.
Levy wants a faster reopening of the tourism sector, which would serve to drive up demand for poultry.
On an annual basis, tourist visits at over four million surpasses Jamaica’s less than three-million population, and, therefore, represent a sizeable market for local businesses, especially those that trade in food.
Levy said that while lockdowns and border closures were necessary in March when the world knew less about the impact of the virus, the size of that knowledge gap is shrinking.
“We have more knowledge and experience now. It is a reality, but we can move on,” he said of the coronavirus.
Berry concurred with Levy: “I do not think curfews are effective, and I would end curfews immediately. It is a waste of time and money. Masks work, and also put in the protocols,” he said.
Berry added that the slow restart to the tourism industry could result in Jamaica losing its competitive edge as other countries are “very aggressive” in their marketing.
“We have to face the music and get the economy moving, and we will be fine,” he asserted.