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200 jobs to be created by new beverage distribution venture

Published:Tuesday | January 29, 2013 | 12:00 AM
Richard Byles (left), chairman of Red Stripe, and Cedric Blair, managing director of Red Stripe, in deep conversation following the signing of a deal to form a 50-50 sales and distribution joint venture between Red Stripe, a Diageo company, and Pepsi-Cola Jamaica yesterday at the Red Stripe offices in Kingston. - Errol Crosby/Photographer

Keisha Hill, Gleaner Writer

Two hundred Jamaicans should benefit from additional jobs that will be created through a joint venture between Red Stripe, a Diageo Company, and Pepsi-Cola (owned by Cabcorp) following the signing of a deal to form a 50-50 sales and distribution company.

The new company, Celebration Brands Limited, will be equally owned by the two entities and will sell and distribute all Red Stripe-Diageo and Pepsi brands in Jamaica. The effort makes this venture the single largest beverage distribution company in Jamaica with a portfolio of world-renowned brands.

According to Cedric Blair, managing director of Red Stripe, the joint-venture company comes as part of an accelerated growth strategy and is expected to create economies of scale resulting in efficiencies and safeguarding the sustained growth of both businesses.

"The formation of this new local company is a clear sign of our commitment to the Jamaica economy and to improving our distribution infrastructure by offering enhanced frequency and quality of service to our customers," Blair said.

managing director

Gustavo Flamenco, who has managed Pepsi-Cola Jamaica for the past two years, has been appointed managing director of Celebration Brands Jamaica Limited.

"As a partner for the long term, this strategic alliance is expected to allow for increased capacity and shared expertise, as well as access to greater resources, including specialised staff," Flamenco said.

He said many roles from both companies will be transitioned to the joint venture. However, the development and management of the commercial and promotional strategy, along with production, will remain independently managed and operated by Red Stripe and Pepsi-Cola Jamaica.

Additionally, Celebration Brands Limited will have its own board of directors with three representatives from each partner and will see a phased roll-out of operations between April and September 2013.

Previously, Red Stripe distributed 70 per cent of the demand for Pepsi-Cola Jamaica, with the remaining 30 per cent being outsourced.

According to Richard Byles, chairman of Red Stripe, the joint venture has created a competitive advantage that will include major investments.

"The benefits of the project are that it will take the cost out of our distribution system but still delivering quality service at good and attractive prices in order to maintain our clients," Byles said.

Other projects brewing at Red Stripe

Red Stripe also announced other initiatives that will be implemented throughout the year:

Red Stripe will be investing US$7 million to build its own energy-generating plant. It is currently reviewing bids and should start generating its own electricity by October.

Red Stripe is looking at using cassava to brew its beer. The ambitious target of using the tuber for 20 per cent of its production is being studied for its financial feasibility.

Red Stripe is also looking to consolidate its brewery operations to include new and exciting packaging formats and final approval is expected by early February.