Wed | Nov 25, 2020

Trade Winds to jump-start milk business with JBL acquisition

Published:Friday | October 9, 2020 | 12:14 AMKarena Bennett - Business Reporter

Peter McConnell, managing director of Trade Winds Citrus Limited.
Peter McConnell, managing director of Trade Winds Citrus Limited.
Peter McConnell, managing director of Trade Winds Citrus Limited.
Peter McConnell, managing director of Trade Winds Citrus Limited.
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Juice maker Trade Winds Citrus Limited has acquired all the assets of Jamaica Beverages Limited, JBL, giving the company a jump-start on the milk business which it has been after for the past three years.

The initial hold-up surrounded Trade Winds’ preferred cows, on one side, and fears of ‘mad cow disease, on the other.

The company, producer of Tru-Juice beverages, invested in a new production line in 2017 that should have marked its entry into the dairy market, but to date has not put the equipment to use, having failed to secure import permits from the Ministry of Agriculture for a new breed of cows from Costa Rica as the source of the milk for the plant.

Trade Winds favoured the Costa Rican cows because they were reputed to yield more milk, but there were concerns among Jamaica’s agriculture officials that the imported bovines could increase the risk of the local herd, Jamaica Hope, being infected with bovine spongiform encephalopathy, BSE, which is popularly known as ‘mad cow’ disease.

Managing Director of Trade Winds Peter McConnell has since gone ahead with the purchase of 230 local cows, and was awaiting their output to start producing the dairy line. Then came the announcement that the business and assets of rival Jamaica Beverages Limited were up for sale.

The rivals operate from adjoining properties in Bog Walk, St Catherine.

“We have started to develop a dairy farm. The animals are getting pregnant now, so by May/June next year I will have cows giving me fresh milk, which means we needed to make an investment in equipment,” said McConnell.

“This is a nice add-on for this new business we are going into, especially given Jamaica Beverages’ location to our business,” he said.

Jamaica Beverages was placed into bankruptcy after an adverse court award of around US$4.5 million that it could not pay. At the 14-acre complex where it operates from in Bog Walk, the company produces Juciful juices, milk products under the Dairy Farmers brand, as well as Fruta juice drink.

The assets of the company included two chill rooms with over 74,000 cubic feet of capacity, and three cold rooms with over 98,000 cubic feet of capacity.

They were put up for sale last November to pay the court award, which resulted from an April 2000 incident in which an employee was shot and paralysed during a robbery attempt at the company’s property in Montego Bay.

Trade Winds has not disclosed the purchase price for the Jamaica Beverages assets. The trustees previously said they were seeking no less than US$4.5 million, or $560 million, to settle the judgment delivered by the Supreme Court.

Even before the award of damages in May 2017, Jamaica Beverages, a subsidiary of SM Jaleel of Trinidad & Tobago, had been in financial trouble and had scaled back operations in 2016. That process included outsourcing its local distribution to Caribbean Producers Jamaica Limited and shutting down the Naggo Head plant in Portmore, St Catherine.

Under the sale agreement, which is expected to be completed over the next three months, Trade Winds will continue to manufacture the Diary Farmers and Juciful brands.

“We did not buy the company Jamaica Beverages, we only bought the assets, so we won’t be operating under that name. Those assets include land, building equipment and the Diary Farmers trademark,” McConnell said.

Juciful is produced under licence.

Before Jamaica Beverages acquired the assets of Jamaica Citrus Growers Limited in 2013 and the rights to produce the brand, Juciful was made by Jamaica Citrus Growers Limited. Ownership in Jamaica Citrus Growers was held by the Jamaica Citrus Growers Association through a vehicle called Citrus Growers Associate Limited.

Trade Winds was a member of Jamaica Citrus Growers Association, but McConnell said the membership is not current.

“JBL had a trademark licence agreement with Citrus Growers to produce and distribute the Juciful brand and pay them a royalty. What we have done is take over that trademark licence under the same terms and conditions for the Juciful brand,” he said.

McConnell said the assets of Jamaica Beverages will be operated as a satellite of Trade Winds Citrus, with selected staff reporting to Trade Winds executives.

Plans for the new acquisition include new product development, particularly in the milk segment, and continued manufacturing of plain and flavoured milks for local and export markets.

The arrangements that Jamaica Beverages had with its Trinidadian owner is said to have ended before the sale of assets.

karena.bennett@gleanerjm.com