CONSOLIDATED Bakeries Jamaica Limited, producer of the Purity and Miss Birdie brands of baked goods, has secured a $600-million, 10-year loan facility from Sagicor Bank Jamaica Limited.

The financing package will be used to refinance existing loans, invest in plant upgrades, and support the company’s working capital needs.

“This facility positions Purity to accelerate our growth strategy while optimising our cost of capital,” said CEO Anthony Chang. “It reflects our ongoing commitment to financial prudence and operational efficiency.”

In a follow-up interview with the Jamaica Observer, Chang elaborated that the company chose debt over equity based on internal cost-benefit considerations.

“There’s a cost of equity and there’s a cost of debt and we have to weigh that strategy going forward. We just thought it’s advantageous to go that route at this time. That’s the bottom line,” he said.

The deal comes as the company continues to roll out new snack products in response to shifting consumer preferences and increased competition in its core bread segment. While traditional breads remain a strong contributor to revenues, Purity has expanded its range to include value-added items such as cinnamon rolls and multigrain snack bars.

Purity has historically relied on loan financing, drawing down new credit facilities to support capital expenditure and operational upgrades. National Commercial Bank Jamaica Limited (NCB) has appeared as its principal banker in audited financial statements dating back to at least 2020. The company has not raised equity capital since its Junior Market listing in 2012.

The new Sagicor facility is expected to improve the company’s balance sheet and liquidity position. In 2024, Purity increased its borrowings to $330 million, up from $253 million the year prior, while cash on hand rose to $53.7 million. A revaluation of its land and building assets in September 2024 more than doubled its equity base to $1.6 billion.

Asked about how the funds will be deployed, Chang said the capex portion of the loan will be focused on reinforcing the company’s existing operational foundations rather than introducing entirely new systems.

“What we want to do is strengthen the platforms we already have. If you look at the trajectory of the organisation, we had to create some platform as we adjusted our business model. So what you want to do is to reinforce those platforms to take us to the next level,” he told the Business Observer.

He added that the move is designed to build capacity and reduce bottlenecks in meeting demand. “Sometimes we’re not able to meet the demand because of those issues. It’s a strategic move…just strengthening where we are so we can drive the business forward.”

The company is also fine-tuning its strategy around production efficiencies and product profitability.

“Purity is a trusted Jamaican brand with significant growth potential. This financing demonstrates our commitment to empowering local companies to achieve their business objectives,” senior vice-president of corporate banking at Sagicor Bank Michael Willacy said in the joint press statement.

In 2024, Purity invested $33.6 million in capital expenditure, down from $106 million in the previous year, following earlier investments in production and its delivery fleet.

For the year ended December 2024, Purity posted a net loss of $12 million, reversing a $13 million profit in 2023, despite revenue climbing to $1.6 billion. Higher distribution, administrative, and depreciation expenses contributed to the downturn. However, the first quarter of 2025 showed signs of recovery, with net income of $20 million on revenues of $494 million.

As of March 2025 Purity maintained a gearing ratio of 16 per cent, down from 26 per cent a year earlier, suggesting the company still has room to take on additional debt without over-stretching its balance sheet.

A pack of Miss Birdie wheat crackers from Purity.