Caribbean Producers (Jamaica) Limited (CPJ) has established Caribbean Producers Jamaica Homeporting Limited as it looks to capitalise on the growing move by some cruise lines to make Jamaica a destination or their homeport for future trips.

Homeporting is when a ship uses a port/marine terminal as its home, regardless of its port of registry. This allows passengers to begin/terminate a cruise in the homeport and positively impacts ground transportation and tours. Passengers may also fly into the island to board vessels. Jamaicans booking cruises on homeported ships will also have the advantage of boarding here as opposed to flying to another location to do so.

Jamaica’s cruise ship ports and associated businesses were decimated by the COVID-19 pandemic which saw no cruises between March 2020 and August 2021. However, since then, there has been a steady rebound for the local sector with June and August cruise visitor numbers surpassing 2019 figures. However, the industry is still trailing pre-COVID-19 visitor arrivals which are down 58.2 per cent from 1.06 million to 443,266 visitors according to tourismanalytics.com.

“This subsidiary was established to service the cruise lines that are visiting and increasingly considering homeporting in Jamaica. CPJ has consistently been asked to quote on procurement by several of these cruise lines. However, our importation for local hotel consumption with its associated duties and taxes prevents the company from competing with ship chandlers mostly located in Florida,” said executive chairman and interim Chief Executive Officer (CEO) Anthony Mark Hart in an e-mail with the Jamaica Observer.

Marella Discovery II made its first call for the winter season at the Port Royal Terminal on November 23 and made the Port of Montego Bay its homeport this season. Jamaica also welcomed the world’s largest cruise ship, The Wonder of The Seas, on December 1 at the Falmouth Pier. The Norwegian Joy was supposed to make the Port of Montego Bay its homeport in May 2021 but cancelled summer sailings shortly after. There are five cruise port facilities in Jamaica with three suited for homeporting.

When asked by Sunday Finance when the subsidiary begin operations, Hart said, “Considering the GOJ’s [Government of Jamaica] policy to develop logistics industries as a major thrust for growth is still in its formative stages, we have formally requested the relevant authorities, including Jamaica Customs Agency, [to] review our standard operating procedures to ensure that the rules governing third-party logistics (3PL) within the JSEZ [Jamaica Special Economic Zone] legislation are clear. Once these operating procedures, which have already been provided to the authorities by the company and its attorneys MF&G, are fully vetted, CPJ Homeporting will start operations.”

CPJ Homeporting was formally registered on June 8, 2021, and is one of CPJ’s three subsidiaries with the other two being St Lucian companies CPJ Investments Limited and CPJ (St Lucia) Limited.

The cruise shipping industry operated under a variation of laws and regulations than businesses with a normalised physical presence on land. This includes flags of convenience and registration of cruise ships in different jurisdictions from where they operate their headquarters. Before the pandemic, almost 30 million persons took a cruise in an industry worth almost US$50 billion.

Hart pointed out that cruise ship industry doesn’t purchase taxed products meant for local consumption. However, more tourism players are pushing for a focus on homeporting to attract more business to the country. In a 2021 forum, executive director of Jamaica Vacations Ltd (JamVac) Joy Roberts said that plans were afoot for the development of a cruise homeporting policy with reference to the fact that Jamaica would benefit in a holistic way from the practice.

CPJ is poised to continue benefiting from the rebound in local tourism with Hart noting that the company has excellent infrastructure to handle another 50 per cent growth locally. The country is expected to see more than 5,000 rooms being added to its roster over the next five years as investment continues to arrive from a growing range of international and local investors.

CPJ’s first quarter revenue for the first quarter (July to September) was up 32 per cent to US$33.06 million ($5.06 billion), but increased expenses saw its consolidated net profit increase by three per cent to US$1.72 million ($263.36 million). Hart attributed these additional expenses to additional staffing to meet continued growth, but the company is currently operating with 20 per cent less manpower than 2019. Net profit attributable to shareholders increased two per cent to US$1.64 million.

CPJ launched its business-to-business platform in May and opened its new Drax Hall store in October as it continues to broaden its reach across the spectrum of customers in Jamaica. This includes the company having 23 per cent of its US$119.96 million in revenue for its 2022 financial year being from its retail channel. Hart wants to grow this business to US$50 million over the next five years. CPJ is currently hunting for a new CEO after Todd Stromme departed on September 5, just a little over three months after his appointment.

In order to avoid disruptions to business from unavailability of goods from supply chain disruptions, CPJ spent an additional US$209,938 on inventory in the first quarter to a record US$40.37 million. CPJ was recently appointed the distributor for Callebaut chocolate and distributes wines, seafood, dairy and meats to hotels and retail locations such as supermarkets and wholesalers.

CPJ’s total assets grew 20 per cent year over year to US$86.48 million which included current assets of US$61.19 million. Its total liabilities rose six per cent to US$58.72 million while equity attributable to shareholders increased 44 per cent to US$24.79 million.

CPJ’s share price climbed to a new all time high of $25.99 on February 1, which was a continuation of its exponential rise after rising by more than 406 per cent in 2021. However, the stock is currently down nine per cent year to date to $11.87 which leaves it with a market capitalisation of $13.06 billion (US$84.24 million).

“CPJ Homeporting Limited aims to leverage parent company CPJ’s buying strength, and furthermore, will have the significant benefit of being able to add locally produced food, beverage, and consumables to the cruise industry’s procurement options,” Hart closed.