Tameka Gordon, Business Reporter
Jamaica Broilers Group's acquisition of the American egg company now identified as England Farms Inc has placed its chief rival in an uncomfortable position.
England Farms is a supplier of eggs to Caribbean Broilers Group, which means the acquisition would have turned CB into a customer of the larger poultry group, Jamaica Broilers.
But the CB Group, which is owned by the Hendrickson family, is rebelling, saying it refuses to patronise its competitor.
England Farms, the Arkansas-based producer and broker of broiler-hatching eggs, was acquired by Jamaica Broilers for an undisclosed sum, forcing Caribbean Broilers, which is also a supplier of layers, or pullets, as well as chicken feed, to seek alternate suppliers.
The deal, which was previously announced, closed in August. Jamaica Broilers President and CEO Christopher Levy said it acquired all the operations of England Farm, including its packaging and distribution business. He again declined to disclose the price of the transaction.
"We have literally become a customer of the competition," said CB Corporate Affairs Manager Dr Keith Amiel.
He said, however, that the move has not fazed the company.
"We do not put all our eggs in one basket," Amiel told the Financial Gleaner.
The CB executive said the company has decided to cease its arrangement with England Farms, but declared: "We will have eggs one way or another."
Citing lessons learnt from the damage wreaked by Hurricane Gilbert in 1988, Amiel said the company then began to broaden its sources of hatching egg supplies, which it buys in Arkansas and Georgia.
CB has "firm contracts with other suppliers overseas," he said, and would therefore see no fall-off in broiler egg imports.
Amiel said CB may end up developing a facility to generate its
own breeder flocks, while hinting that the operation will likely be based in the US as a risk-management measure, given the Caribbean's susceptibility to hurricanes.
England Farms is in the business of trading hatching eggs, but it also owns and manages pullet and breeder flocks, grading and packing facilities, and distribution and transport operations.
Before Jamaica Broilers acquired the business its parent was England Packing Company, which is cited as one of the largest US buyers and sellers of broiler-hatching eggs, with nearly 50 years experience in the industry. Its volume output was not disclosed.
Levy said of the volumes normally purchased by CB that his company was able to "relocate and place those eggs with other customers on favourable terms".
The cancellation, he said, happened with "short notice".
"I think what happened is Caribbean Broilers has found other suppliers," Levy said. "They didn't want us to supply them from our England Farm."
Levy says the current acquisition was an expansion of broiler-hatching facilities that his company already owns in both the US and Jamaica.
The expansion overseas would not, he said, affect existing supply arrangements locally.
Caribbean Broilers is substantially in the business of poultry, but it also produces other meats and animal feed. The company currently supplies 150,000 layers annually to the local market, while Jamaica Broilers supplies 350,000 layers.
The CB Group made a serious play for a share of another market segment, local table eggs, with the acquisition of the Chippenham Park egg farm in 2011, and launched a campaign to raise local consumption above the prevailing average of one egg per person weekly.
At the time, Chippenham was producing 600,000 dozen eggs in a market of some 11 million dozens.