Editorial

A good move by Jamaica Producers Group

Monday, June 24, 2019

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We are always pleased when we see Jamaican companies excelling, both here and overseas, as that kind of growth and expansion redounds to the benefit of the company, its owners, employees and, ultimately, Jamaica.

In recent years the country has seen a number of such developments, and last week news emerged at the Jamaica Producers Group (JPG) Annual General Meeting (AGM) that the group is expanding its logistics business in the European market.

As reported in the Sunday Observer yesterday, JPG is seeking to build out a logistics hub in London, which is expected to be a multimillion-dollar venture.

Mr Jeffrey Hall, JPG's managing director, reported to shareholders at last Friday's AGM that the search has already started for a second warehouse facility in London to build out a Caribbean logistics facility.

Mr Hall said that a minimum 20,000-square-foot warehouse is needed for this logistics facility by the JPG subsidiary, Jamaica Producers Shipping Services — a leading United Kingdom-based supplier of full-service Caribbean-focused logistics.

As we understand it, JP Shipping serves retail and commercial customers in all aspects of full container load and less than container load logistics from its twin bases in London and Newport in Wales.

According to Mr Hall, Jamaica Producers Shipping Services is seeking to acquire the warehouse space through a lease arrangement or straight purchase from an existing company in the warehousing business in London.

He said that the logistics facility would receive cargo in the United Kingdom for distribution to the Caribbean and, likewise, cargo coming from the Caribbean for distribution in the United Kingdom.

That mechanism holds tremendous potential for the further marketing and sales of Jamaican products overseas, particularly in Europe, which has a consumer market in excess of 500 million.

Mr Hall has told us that JP Shipping continues to be a consistent contributor to the group's earnings, even as it operates in a highly competitive market and, with continued weakness of the British Pound, margin pressures have compressed earnings.

However, he notes that, “The business has strong market position, delivering a high-quality permanent service to customers,” which has allowed it to absorb some of the margin pressures in the short term.

We believe, based on our knowledge of Mr Hall and his business acumen, that he is more than capable of leading the group's expansion charge. Indeed, we recall that in 2017 when he was a Jamaica Observer Business Leader nominee, the Jamaica Producers Group, at December 31, 2016, had assets of $29.86 billion and $10.4 billion in shareholder equity.

Gross revenue for the balance sheet was $12.1 billion and profit $3.9 billion. In fact, that 2016 profit represented an astonishing 37.8 per cent return on equity, 32.5 per cent return on sales, and 13.2 per cent return on assets.

That the group of companies has grown under his leadership is unquestionable. We expect, therefore, that he and his team will utilise their expertise to make a success of the planned expansion.

We wish them well.


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