Wisynco earnings climb to $5b, snacks take a nibble out of profits
Drinks maker Wisynco raked in close to $5 billion in profit for the year ended June, surpassing the prior year’s performance by 21 per cent, on revenues that climbed to a record $48.7 billion. Its solid performance continues to be led by growing...
Drinks maker Wisynco raked in close to $5 billion in profit for the year ended June, surpassing the prior year’s performance by 21 per cent, on revenues that climbed to a record $48.7 billion.
Its solid performance continues to be led by growing demand for its locally manufactured drinks.
Wisynco bottles beverages for Coca-Cola under licence, but it also distributes drink brands it owns or co-owns, namely Wata, Bigga and Tru Juice, as well as multiple non-drink consumer brands.
Still, the financial year was not without challenges as Wisynco continued to manoeuvre around production-capacity constraints in addition to booking losses on its JP Snacks Caribbean Limited holdings, an investment associate in which it has a 30 per cent stake and serves as distributor of its snacks.
At year end, Wisynco’s investment in JP Snacks Caribbean Limited carrying value of $417 million, which is equivalent to just 1.3 per cent of Wisynco’s total assets. The group operation recorded impairment losses of $105 million from the snack operation, but at the company level, the loss was even greater at $169 million.
JP Snacks, the maker of the St Mary’s snack brand, is now ultimately owned by Pan Jamaica Group Limited following the conglomerate’s acquisition of the operations of Jamaica Producers Group on April 1.
Wisynco Chairman William Mahfood, who also sits on the board of JP Snacks, said on Friday that between strategies put in place to improve the performance of JP Snacks and capital projects now under way at Wisynco’s Lakespen, St Catherine home base, he is upbeat about further growth at Wisynco.
Mahfood said JP Snacks has been experiencing challenges with the supply of raw materials, particularly regarding its frozen business line from which it serves Puerto Rico and the Latin America markets.
“It’s a combination of factors that has affected the supply of agricultural inputs, but right now, they are on a new chapter. They have turned the corner, and I think they are headed into a positive direction,” Mahfood said.
In an update on Wisynco’s ongoing expansion project, he said the company was halfway through the budgeted spend of $5 billion. Wisynco already operates 600,000 square feet of space – split among its White Marl, Lakes Pen, and Ferry locations – but is looking to add another 200,000 square feet. The expansion will see the installation of three new plants in the company’s existing facility, along with factory and warehousing space at Lakes Pen.
The upgrades will include a new line for its bottled water, Wata; a new product line; a power generation plant; and new warehousing for raw material and finished goods.
“Construction of the new production facility is now under way, and we expect to have that building ready by early next year. As for the three additional lines, we have started installing one and we hope to start production by around October, the other one closer to the end of the calender year, and the third line around January,” the chairman said.
Overall, the expansion is expected to increase Wisynco’s production capacity at the St Catherine plant by a third, positioning the manufacturing giant to satisfy current demand as well as deepen market share locally and overseas.
“We are very excited about the next six months because this should alleviate some of the challenges that we are having with supplies on the local market and our export business,” Mahfood said.