JAMAICA Producers Group (JP) introduced its profitable Dutch-based drink line into three new European markets during the three months to June 29.

“During the 2014 second quarter, we continued to develop new markets for our juice in Belgium, Germany and Scandinavia,” said JP chairman Charlie Johnston. “We also benefited from a series of cost reduction initiatives that formed part of our ongoing continuous improvement programme.”

The new markets are a big deal as JP earned three-quarters of its June quarterly revenues at $2.39 billion from its JP Europe division–led by its juice business, AL Hoogesteger Fresh Specialist BV (Hoogesteger).

“Hoogesteger continues to lead the Dutch market for freshly squeezed juice”, said Johnston in a statement prefacing the financials posted to the Jamaica Stock Exchange this week.

The market expansion follows the launch of new juices, chips and coffee throughout the group.

The products include an ‘infused water’, which adds a hint of fresh lime, mint and other flavours to pure water. The company also started selling ‘super juices’ which are extracted and blended from a range of vegetables with powerful health properties including kale, spinach, cucumber, carrot, beetroot and pomegranate.

“Our businesses in Europe will continue to benefit from a growing demand for fresh juice, supported by our commitment to innovation and efficiency,” added Johnston. “Moreover, we operate in the context of an increasingly stable economic environment.”

Pre-tax profits from the JP Europe division for the quarter hit $187.7 million or 60 per cent higher year on year.

The company’s Tropical division recorded a $49.7 million loss, which was higher than year-earlier levels.

The improved results of JP Europe also benefited from euro currency movement against the Jamaican dollar, which in turn hurt JP Tropical Foods.

“Our Jamaican fruit business, however, faced challenges due to increased Jamaican dollar costs on imported inputs,” said Johnston regarding the loss incurred by JP Tropical.

Still, after-tax profit for the three months to June 29 totalled $80 million, which was 4.2 per cent higher than the comparative period in 2013.

JP group earned four-fifths of its $7.7 billion in annual revenues in 2013 from outside the island. Euro earnings account for 60 per cent, Jamaican dollar earnings account for 20 per cent, US dollars and Pound Sterling account for roughly 10 per cent each.

During the second quarter, the conglomerate experienced increased costs associated with record payouts to farmers that supply Mavis Bank Coffee Factory of which JP holds a 50 per cent stake.

“Regrettably, the coffee production for the industry as a whole was among the lowest in history,” said Johnston. “As a consequence, prices paid to farmers were among the highest in history and while this adversely impacted our profits during the quarter, we are hopeful that it will lead to a renewed commitment to coffee farming.”

Coffee farmers are paid per box of coffee-cherry delivered to the processors.

The price per box has increased from $3,500 to over $8,000 over the past 12 to 15 months. Some farmers even talk of payments at $10,000.

Production remains low as factors, such as rust disease, destroyed coffee fit for reaping.

In the previous quarter Mavis Bank announced that it would launch a new instant coffee called True Brew.

“During the quarter we advanced plans to diversify our income base by introducing the True Brew brand of instant coffee to the market,” said Johnston. “Sales commenced in the third quarter and we are satisfied that the product meets a growing demand for high quality instant coffee.”

JP also previously announced that it would launch two new snacks for overseas markets.

“Moreover, during the quarter, we launched a new tropical snack brand of plantain and cassava chips for the Dominican Republic market,” said the chairman of JP.

The company’s Four Rivers Mining subsidiary continues to face start-up losses in connection with its new Clarendon-based facility.

“Strong demand from ongoing infrastructure works connected to the North-South Highway link will benefit both our St Mary and Clarendon operations going forward,” reasoned Johnston.