Broilers going after bigger export market
Published:Friday | June 25, 2010 | 12:00 AM
Jamaica Broilers Group is taking on new markets overseas through distribution deals in several Caribbean countries, but says its new export focus requires no immediate investment in manufacturing capacity here to meet the expected 10-15 per cent growth in volume sales for some targeted export products.
The poultry group is now selling its Reggae Jammin' chicken frankfurter, burgers and rotisserie chicken, plus Content pig's tail and pickled mackerel, and Best Dressed chicken nuggets to several countries in the Caribbean, which includes Dominica, Grand Cayman and St Lucia.
Chris Levy, president and chief executive officer, said Broilers was going after these relatively small markets with the hope of adding incrementally to revenue.
"We are seeing some markets opening up throughout the Caribbean for us. The volumes are very small, but nonetheless it's very encouraging times and we are excited," Levy told the Financial Gleaner. "It is not a huge amount of market, but every mickle meck a muckle."
"When you look on St Lucia, the population is very small, with about 200,000 people, but there are some great opportunities that I think we will be able to capitalise on."
Broilers, in its nine-month results ending January 30, 2010, doubled profits to J$1 billion, but found itself having to drastically cut production costs to gain that profit edge, because of a net J$2.5 billion decline in sales, largely resulting from a J$4-billion drop in ethanol sales.
Last year, the group's nine-month sales rose to J$19.7 billion; this year, it's down to J$17.2 billion.
Animal feed plan
Levy is also working on a plan to distribute animal feed to Haiti, an apparently more complicated arrangement that might require identifying a partner in the French-speaking, underdeveloped country of some nine million people.
In 2009, the company's feed mill operations grew sales by three per cent to Caribbean buyers, primarily for poultry and horse feeds, and has now discovered solid export markets in Suriname and other countries.
Levy, however, did not expound on that development.
He said his company was still conducting due diligence on Haiti, while at the same time seeking to establish relationships and associations in pursuit of any business opportunity.
"It's a very unique time in their history, and the opportunities will be there as transparency returns to the country, and I think it will be a good atmosphere for investments."
No rush to haiti
Conley Salmon, Broilers' vice-president for marketing of feed and agricultural supplies, said the company would not rush the project.
"We are here in Haiti trying to determine an appropriate business model ... we will not just pluck out money on Haiti right away; we go about these things cautiously," he said.
The broader push into exports, he added, includes no joint-venture deals nor investment in production capacity overseas, but the hunt is on for distributors and retailers to whom Broilers, if needed, will provide technical advice.
"Right now, we are using the capacity within our mills. We have excess capacity that we can use; once we have maximised that capacity, we will do some modification to the plant to take us to the next level," Salmon said.
"If it's about baby chicks to be exported, we do have some capacity now; and with the market continuing to grow, we are actually in the process of expanding our hatchery, so that we can meet both local additional demand and some export demand."
Salmon added that feed sales grew about 15 per cent overall last year. Exports grew 10 per cent.
"We expect to see another 10-15 per cent growth this year in export sales, at a minimum, and then we would expect to see that ramped up, as people gain confidence in the product and its availability," he said.
Levy says how successful his company is at deepening its market presence in the region is dependent on how it good it is at forging linkages.
"The markets are very Caribbean and business in the Caribbean is done by establishing relationships; it's not just done on an arm's length, clinical basis - whether you are in St Lucia or Jamaica," he said.
"So you invest time developing those relationships to determine who is going to represent you, and is capable of extending your products into other markets," he added.
The company's last big push in the export trade was in the fish market, an experiment which ended in failure and forced a retreat back to domestic clientele after tens of millions of losses to Broilers.