THE National Baking Company is ready to spend the dough to execute plans to roll out a new plant in Montego Bay, St James, and to build two new distribution centres – one in St Ann and the other in Manchester – to improve distribution logistics for its products as it prepares for a new phase of growth in the local and export market. The total cost of the expansion will be about US$42 million or about $6.5 billion.

“We’re expanding into the west with a plant in Catherine Hall, St James. The plant is a sizeable infrastructure of 120,000 square feet, Gary “Butch” Hendrickson, chairman and CEO of National Baking Company, told the Jamaica Observer in a recent interview.

Hendrickson said the new Montego Bay location, which will complement production from its current location in Kingston, is a single-line plant. It will produce hard-dough bread and “won’t make all the varieties of products we make in Kingston, but it will also contribute to exports to an extent”, he continued.

The design specifications for Montego Bay is 10,000 pounds per hour of finished products. He added that Montego Bay will have a warehouse for products, unlike the Kingston plant.

“We don’t warehouse products here [in Kingston]. Here we produce the bread [and] move them immediately.” He pointed out that the plant in Kingston cannot store more than one-hour’s worth of production.

“We are so out of space here, there are times we can’t even drive a golf cart through the backyard of the plant. It’s tough, which is why we have to move [to build a new plant in Montego Bay] to take some of the pressure off of this location. It’s just overwhelming,” he said.

Kingston is the only location from which National produces now. The bakery itself covers 270,000 square feet, but National operates on about 12 acres of space across the capital.

“Montego Bay changes the logistical side of things. So you’ll find that you can produce more, obviously for the north coast, and go all the way around to Westmoreland and it could reach as far as St Elizabeth. It depends. You would have to see what the logistics is. We would sell from there into Trelawny, as well. We wouldn’t ship from Kingston anymore. Bread for those areas will come out of Montego Bay,” Hendrickson added.

While he said he is unclear when ground will be broken on the Montego Bay plant, it will take 22 months from the ground-breaking ceremony to completion. The project has already received approval from the St James Municipal Corporation.

“When the project was first envisioned, it was priced at US$25 million, but with inflation, it is now budgeted in the low 30s [US$30 million]” Hendrickson said, while adding that the final price is yet to be determined.

In addition to the new plant in Montego Bay, the National Baking Company CEO said the company will build a new distribution centre in Priory, St Ann and another in Mandeville, Manchester, to serve the surrounding areas of those towns.

With the distribution centre in Priory, he said the company aims to cover areas along the north-east of the island ,while the Mandeville distribution centre will serve central Jamaica.

Both projects are priced at US$12 million (US$6 million each) or about $1.9 billion and each plant will be about 40,000 square feet.

“In the case of Mandeville, we got held up a little bit, but we are out of the ground now,” Hendrickson added.

“I’ve been promised that, not this Easter, but next Easter we will be up and running in Mandeville.” That gives a rough date of about the end of March into early April 2024 for the distribution centre to start operation.

“For Priory, we are looking on the drawings now, but the plan is to break ground this year. We just want to get Mandeville settled in first,” he noted.

Currently, National Bakery runs about 130 units every day on 130 routes from its Kingston location. That excludes 18 trailers which move products across the island, as well. The company is now in discussions to buy electric trucks for the fleet.

“The problem is [we don’t have the space] to hold them anymore, which is why we have to take the pressure off this area,” he said.

Setting up in Montego Bay, “you’re going to bring a fresher product to customers… getting it to them eight or 10 hours earlier,” he added.

He said the company will still ship sliced bread from Kingston – Weekender, Natural Bran and Healthy Start – to the new distribution centres.

“The expansion will also allow us to have some more flexibility in the export market.”

“I am setting up in Catherine Hall because the port is down the road, and if the services are right, we can ship out of there with the bread.”

“We’ve been doing very well in exports. We have our own distribution centre in South London. We have our distribution centre in Brooklyn, New York, and we have a big distributor in Toronto, Ontario, and one growing like a weed in Broward, South Florida.”

The south Florida distributor is “looking to buss out this year and we looking forward to supporting him”, Hendrickson said. He said further, a second distributor sells the HTB branded National Bakery products in New York.

“When I first started exporting to New York, we started with one 20-foot container….in 1994, and last year, we shipped about 450 [all over the world]. We grew 100-fold in 30 years in exporting and the reason we didn’t grow more than that is because we’re too busy doing other things, especially locally, because Jamaica kept growing for us, and we kind of tend to look after home first,” he added.

Still, Hendrickson said the company is on the hunt to grow exports further, but hasn’t decided on new markets as yet. Products are exported frozen. The option is setting up a plant overseas to produce, but Hendrickson said he would rather keep production in Jamaica, highlighting that he’s now 70 years old and so any setting up of plants overseas will have to be done by the next generation of the family who will take over after him.

“I want to employ as many Jamaicans as possible. I have only one expat in my company and he’s been living in Jamaica for 15 years,” he noted.

Now he employs 870 people and said when the expansion is complete, it will add 120 staff members.

Hendrickson told the Business Observer that he is also proud of the role National has played in giving Jamaicans healthier products in the market.

“We going into a healthier option. And I use these words carefully, because you must be frank; there are very few things at National that we make that are totally healthy for you. Something is gonna be bad for you, but some things are better than some. Obviously, our grain bread or bran bread are better for you, if you listen to medical science, than the straight white bread. What’s impressive about that is that from 1994 to now, bran bread went from five per cent of total sales to 50 per cent. You’ll never believe that.”

He said white bread now accounts for about 15 per cent of sales annually, with the rest being bran and multigrain products. “I think if you did a survey, I think you may find that Jamaicans eat more bran and multigrain bread [on a per capita basis] than anywhere else in the world,” he said.

“As we go into the… in 2023, you’re gonna see a lot more of what we refer to as healthier options. We started with granola recently and it’s doing very well. We have fried chickpeas that is high in fibre and very high in protein as a vegetable protein. We also have rice cakes with six calories each as a healthier option. So we are working towards that healthier option for the Jamaican public.

“Jamaicans have showed they care about their diet and that’s why we are going into that line,” he concluded.