Today, we publish the second of 15 stories on the nominees for the Jamaica Observer Business Leader Corporate Award. To be considered for nomination, all companies had to be at least 50 years old, or be able to trace their roots to 1962 or before. The award presentation and announcement of the Business Leader Corporate will take place on Sunday, December 2, at the Jamaica Pegasus Hotel in Kingston.

The Jamaica Producers Group is remarkably adept at reinventing itself.

Over its 83-year history, it survived a brush with bankruptcy, weathered inalterable business cycles, and learned to live with unrestrained competition in its once protected markets.

The company thrives today, long after the banana industry that it was created to serve receded in scale and importance to the Jamaican economy.

Though the drive towards corporate makeover has been long in the making, the latest phase, dating back to 2008, has had a renewed sense of urgency.

That year, Producers paid J$950 million for a Dutch juicemaking outfit called Hoogesteger Fresh Specialist BV. The investment had two principal objectives, the first of which was to deepen its income stream.

Importantly, the Dutch smoothies maker also enabled the Jamaicans to break into one of Europe’s largest markets with a brand that already enjoyed fairly wide name recognition.

The acquisition of the Mavis Bank Coffee Factory in October last year is also in line with a corporate outlook that sees agro-processing and shipping as important valueadded endeavours, and areas in which the firm already has significant expertise and marketing know-how.

Producers is a 50 per cent partner with Pan Jamaican Investment Trust in this venture to add Jablum, one of the most iconic brand names within the coffee industry, to its list of products. The purchase price was J$387 million.

In December last year, the Producers Group bought controlling interest in the family-run cake-making firm, Tortuga International. The 62 per cent stake in what is one of the Caribbean’s most respected indigenous brands cost $421 million.

Tortuga Rum Cake earns most of its revenues from visitors to the region. The company has facilities in Barbados, The Cayman Islands, Jamaica and south Florida.

Yet, the ink was hardly dry on the Tortuga deal when JP announced in December last year that it was making a play for an additional 25 per cent of the shares in the publicly listed wharfing company, Kingston Wharves Ltd. The $1.8-billion investment that was consummated in March this year, lifted JP’s shareholding to 30 per cent, and gives it more clout in charting the future direction of the porting company.

Together these four deals are expected to reshape Producers’ future revenue stream, but the shareholders of this dynamic conglomerate will have to wait several months, if not a few years, to know for sure just how judicious these investments were.

Up to a year ago, the company had assets of just over $6 billion and shareholder net value of $4.7 billion. Last year, it generated sales of $6.2 billion and net profit of $963 million.

The Producers Group now boasts nearly two dozen subsidiaries and joint venture operations across three broad industries — from agroprocessing, to shipping services and mining. The firms operate within jurisdictions as far flung as The Netherlands, Costa Rica, and Britain, to The Cayman Islands and Jamaica.

The expanding range of products includes banana chips, juices, condiments, coffee, shipping services and more recently aggregate for the construction industry.

The directors and management are constantly looking for an edge in the markets that their company serve, and nowhere is this more clearly manifested than their approach to research and product development.

The most recent focus of research is on ways to extend the shelf life of the company’s juices that are sold in Europe. A successful outcome would simultaneously extend the marketability and improve the efficiency at which these products can be delivered to customers.

Similarly, if attempts at packaging peeled green bananas, or at finding ways to make it possible for consumers to refrigerate ground provisions are successful, Producers should be able to drive down the cost at which it is able to deliver these items to the market.

As one of the country’s largest agro-processors, Producers has been leading the way in new approaches to cultivate several crops like pineapples — using nurseries to experiment and create the ideal product before launching into fullscale production. This practice has been highly beneficial to small farmers who themselves lack the time and resources for this kind of experimentation.

Last year, the company for the first time diversified away from what has become its core competency when it bought 51 per cent of the Four Rivers Mining Company. But by partnering with the Lydford Mining Company, JP ensured that the requisite expertise was already in place to avoid the kinds of teething pain that typically comes with new ventures.

The mining outfit is one of the island’s largest crushing plants — delivering highquality aggregate to the construction sector.

“Where we lack the knowledge, our approach is to partner with someone with the competence,” says Dr Marshall Hall, in explaining JP’s decision to enter the crush stone market by way of partnership.

Dr Hall served as managing director of the Producers Group from 1979 until his retirement a few years ago, but remains a director and the company’s single largest shareholder.

His son, Jeffrey Hall, is now CEO, while the chairman since 1986, Charles Johnston, is grandson of one of the founders whose name he shares.

In 1929, three Jamaicans — Charles E Johnston, Sir Arthur Farquharson, and Capt D List — brought together 6,500 local banana farmers to create the Jamaica Banana Producers Association. The singular purpose of this organisation was to find a way to provide reliable shipping service to transport the island’s bananas to the UK.

“Johnston realised that the industry was about getting the bananas to the market, and that without reliable shipping service, there was no industry,” notes Hall. “The big shipping lines went to Central America first and would not call on Jamaica if they got a full ship.”

The co-opt as it was then, almost buckled under huge debt, but ultimately survived through government intervention to serve as the primary shippers for the island’s most important export product.

The association, by providing peace of mind to farmers, that reliable shipping was in place to ensure that their bananas would reach the market, enabled the industry to expand. By 1937, Jamaican farmers were producing 360,000 tonnes of bananas, or roughly 50 per cent of the island’s exports — numbers that are unfathomable by today’s anaemic production levels.

An important development came in 1969 when the Producers Group decided that Jamaica ought to retain more of the revenue generated by its banana exports. It entered into a joint partnership with food giant Dole to create a banana ripening and distribution subsidiary — JP Fruit Distributors Ltd — that began to handle the ripening and distribution of the country’s bananas in the UK market.

Yet, the late 1970s and 1980s marked another important stage in Producers Group’s evolution — from shipping and distribution of bananas to an even more central role within the industry.

“We decided to invest in banana cultivation and to modernise the industry,” says Hall.

By the middle of the 1980s, this company was knee-deep in this end of the industry with 5,000 acres of banana under cultivation.

• St Mary Banana Estates Ltd, 1,600 acres,

• Eastern Banana Estates Ltd, 2,000 acres,

• Victoria Banana Estate Ltd, 1,000 acres.

The banana farms were initially started as joint partnerships, with Producers eventually buying out the partners.

Product diversification began in the 1980s with citrus and fruit juice manufacture, and distribution in the UK through JP’s British subsidiary, Sunjuice. It intensified in the 1990s, leading to the corporate rebranding and name-change in 1992, from Jamaica Banana Producers Association, to the Producers Group.

Today, a wide range of products can be found across several markets displaying the JP logo. Among them chips made from traditional crops such as banana, potato and cassava; to coconuts, plantain, ackee, pineapple, and mangoes. The company has also leased over 150 acres of land to small farmers engaged in cash crop production.

Three years ago, the company decided to cease production of bananas for the export market, citing the series of devastating weather conditions between 2004 and 2008 and the constant risk to its crops posed by hurricanes.

But Hall believes that the company’s latest investments in Kingston Wharves can be a game-changer, both for shareholders and potentially for all of Jamaica, with the cash infusion giving the wharfing firm the ability to improve both its capacity and efficiency at handling international cargo.

“We want to maximise the flow of ships that can call here via the expanded Panama Canal,” he notes. “We want to be a part of a big logistics company in Jamaica. We see possibilities for increased movement of goods from East and West.”

Moses Jackson is the founder and convenor of the Jamaica Observer annual Business Leader Award programme. He may be reached at moseshbsjackson@yahoo.com.