Grow more ginger!

BY CAMILO THAME Business Co-ordinator thamec@jamaicaobserver.com

Wednesday, February 22, 2012

SALADA Foods Jamaica Limited is pushing for higher domestic ginger production to get its tea -- which it introduced into the local market last October — overseas.

The manufacturer, which for years was focused on coffee products, started an aggressive push for exports in 2011, which resulted in export volumes increasing by 35 per cent last year — primarily driven by increased sales to Asia and North America.

Salada's general manager, Julian Rodney, said that the amount of ginger available domestically doesn't accom-modate "significant export of the tea", but the company has started work with farmers and the agriculture ministry to increase planting of the condiment to meet Salada's "internal demand for the raw product".

The most recent data from the agriculture ministry showed a reduction in domestic ginger production in the first quarter of 2011 when compared to the same period the year before. Output fell from 272 tonnes in the first three months of 2010 to 238 tonnes in the corresponding period last year.

However, production has grown from 259 tonnes for the 2006 calendar year to 486 tonnes in 2010.

In the meantime, Salada is focusing on its readiness for a more regulated overseas market.

Rodney estimates that by the end of March, Salada's factory will be able to withstand an inspection by the US Food and Drug Administration (FDA) under new rules laid out under the Food Safety Modernisation Act (FSMA).

The FSMA, which was signed into law by President Obama on January 4, 2011, is touted as the most sweeping reform of US food safety laws in more than 70 years.

"It aims to ensure the US food supply is safe by shifting the focus from responding to contamination to preventing it," according to the FDA's website.

Salada plans to go a level above what is required.

"The Hazard Analysis Critical Control Point (HACCP) implementation will take 18 months," according to Rodney, who added that the process started last October. "By the start of 2013/14 (September 2013), we should start going for certification. HACCP is a level above required."

According to Salada's financial statements published last week, "HACCP is a quality management system which will enable the company to meet current and future require-ments for the export market".

The coffee and tea maker said that the HACCP implemen-tation helped increase administrative expenses by 19.8 per cent, from $17.2 million to $20.6 million.

Nevertheless, its net profit increased by 19.3 per cent to $19.2 million.

The increase resulted from price adjustments to align selling prices with increases in input costs during the prior year — sales revenue increased by 8.2 per cent, from $110.8 million to $119.9 million — and improved efficiencies in the production process as well as a $1.3 million, or 19.4 per cent decrease in selling and promotional expenses.