Jamaica Beverages upgrades production line - Positions for new business through contracts
Tameka Gordon, Business Reporter
Jamaica Beverages Limited (JBL) has spent a majority of the $1 billion poured into its juice plant at Bog Walk on upgrades and a new filling line.
The company has since introduced three products through the newly installed Sidel line, which now allows it to mix the flavours for its products, blow its own bottles and fill "between 2,000 and 3,000 cases per hour", General Manager Xesus Johnston told Wednesday Business.
"We could easily run 34,000 plus cases a day," Johnston said, but declined comment on the plant's capacity at its acquisition from Development Bank of Jamaica (DBJ).
The plant was owned initially by the Jamaica Citrus Growers Association before it fell into debt to DBJ.
JBL, through its Trinidadian parent, SM Jaleel, acquired the asset in 2012, and cobbled a side deal with the citrus growers for rights to produce under the Juciful brand in return for two per cent of annual sales.
"The acquisition cost wasn't the biggest component of the investment; the biggest component was in the equipment and refurbishing of the actual buildings," Johnston said, noting that some of the original structures were built in the 1960s.
At least $750 million was spent on the filling line as well as infrastructure work to house the new equipment.
"I think the best way to look at the investment is the capital in equipment. The new bottling line has allowed us to put out Cool Runnings water as well as add other products to the line," the general manager said.
The added capacity also positions the company to go after outsourced contracts, which it plans to do more aggressively "We have seen some expressions of interest for us to co-pack for other companies," he said.
JBL has reintroduced its Cool Runnings purified water to the Jamaican market, having bought the brand from its original owner, Horace Peterkin, some 10 years ago. It also launched a new cranberry-flavoured water.
The water products are expected to increase the company's output volumes by about 15 per cent for 2014, Johnston said.
Before the local launch of the product, Cool Runnings was manufactured by SM Jaleel in Trinidad, and marketed primarily to the eastern Caribbean. However, the manufacture and distribution of the brand "has now been brought back home", said Johnston.
JBL has also placed a boxed version of its Fruta line on the market.
"The box Fruta is a continuation. We have always had the brand, but it wasn't manufactured locally so this is the beginning of us manufacturing new brands locally with a formulation that is known to Jamaican consumers," said the JBL manager.
Of JBL's line of 14 products, seven are locally manufactured. The seven are Juciful box drinks and Squash, two bottled water products, box and canned Fruta products, Dairy Farmers chocolate milk and eggnog, and the company's line of premium fruit, Joose.
The Fruta and Juciful lines together have roughly 40 per cent of the box-drink market, Johnston said. Sale of Juciful is up some 30 per cent since the acquisition, he adds.
The Bog Walk plant has the capacity to process 27 million pounds of citrus per year. However, it only gets some nine million pounds from its suppliers, due to low citrus yields.
Johnston ranks the company a "solid two in the market", in terms of market share.
"We have 14 brands, seven of which are made in Jamaica. Our biggest competitor has 110; seven are made in Jamaica. When you look at it in terms of scale, we are more than holding our own."
There are no immediate plans to export the boxed Fruta, however, the company expects to ship its first container of Cool Runnings water to two Caribbean countries by July.