Mavis Bank to invest US$2.5 million in coffee

BY KARENA BENNETT Business reporter

Tuesday, May 24, 2016

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Processor of Jamaican Blue Mountain Coffee, Mavis Bank Coffee Factory (MBCF) will be investing roughly US$2.5 million in operations over the next four years.

Director of Internal Consulting David Martin, in an interview with the Jamaica Observer, said the company will be using the funds to ensure maximum operation efficiency, development of product lines, and cementing its brand name in regional markets to include Florida.

What’s more, the company — which was some five years ago acquired by Jamaica Producers Limited and joint venture partner Pan Jamaican Investment Trust following a six-month negotiation with the Development Bank of Jamaica — is looking to double its active coffee cultivation to 120 acres on its Andover Blue Mountain Coffee Farm and is also eyeing the acquisition of another farm.

"The investments will be in three pockets. A good chunk of that investment is for building the four Jablum brands — Gold, Classic, Caribbean and True Brew throughout the region, where appropriate.

"We want True Brew to become an everyday coffee to Jamaicans first and foremost, and then secondly we will export to the diaspora in the United States and also the Caribbean markets. Jablum Gold, Classic and Caribbean are very relevant in travel retail channels throughout the region, including the airports, hotels and cruise," Martin told the Business Observer. "So there is a big emphasis on marketing."

The company will also use a portion of the funds to upgrade capital machinery in its roasted coffee factory to support plans the company has for its four Jablum brands.

"For example, we are interested in doing k-cups and sachets that have the pods. So imagine you have a single serve of coffee in a round pouch; we use it not quite like a tea bag but in a machine that can drip one cup of water through the pod to make a cup of coffee. So we have that being used right now at the Courtyard Marriott and we want to do more of that — and we need to invest in the machinery," he said.

Mavis Bank is also seeking investors for efficient converting of its coffee cherries in its green bean coffee factory.

With the 2014/2015 season delivering one of the smallest Jamaica Blue Mountain crops in recent history, Jamaica Producers lamented its challenge in securing its general market position in its 2015 annual report.

Accordingly, MBCF’s cherry- purchasing programmes had to adapt both by directly increasing the prices paid to farmers, which grew on average by around 90 per cent year-on-year, and through expanding investments in farmer extension projects, such as the provision of fertiliser and pest control material, coffee seedlings and the delivery of training in best practices for coffee husbandry.

The strengthened cherry- purchasing programme saw MBCF purchase more than 25 per cent of the available crop.

According to the Jamaica Producer’s report, MBCF was successful in both securing more favourable customer contracts in 2015 as well as structurally reducing its fixed cost base. This allowed the business to achieve a significant turnaround in profitability following losses in 2014.

Up to last year, Blue Mountain coffee production improved from 162,000 boxes to 192,000 year over year. The majority of that is consumed by the Japan market. MBCF, with a production capacity of 150,000 boxes of coffee per year, is hoping to solidify its foothold in new markets such as Taiwan, Korea and parts of China for its green beans.

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