Spur Tree and Exotic Products enter joint venture agreementFriday, May 15, 2015
RICHARD BROWNE Business editor firstname.lastname@example.org
TWO export-driven companies, Spur Tree Spices Jamaica Ltd and Exotic Products (Jamaica) Ltd, have joined forces to drive product development and export sales. The two companies -- both involved in the production of food and seasonings — signed a joint venture on Wednesday.
"A number of benefits will be derived from this agreement," said Spur Tree Spices CEO Albert Bailey. They include increased export growth, greater employment, a maximisation of local inputs, improved productivity, backward integration and greater community outreach.
"Both of us are export-driven companies," Bailey added.
"This partnership is going to do for us many of the things we couldn't do for ourselves," said Exotic Products Director Trevor Blake.
Spur Tree, which was founded in Mandeville in 2006, is best known for its jerk seasonings, marinades and pepper jelly. The company is now housed in a 15,000-sq ft space at the Garmex Complex on Marcus Garvey Drive in Kingston.
Exotic Products, based in Danvers Pen, St Thomas, started in the 1990s with the production of a range of dairy products, but made the switch to focus on the production of canned ackee and callaloo for the export market once it gained FDA approval.
Both companies have existing markets abroad, but it is thought that "new market opportunities" will exist for Exotic Products' lines through Spur Tree's sales and distribution network, Bailey said.
"Our products are listed and doing very well in major chains such as Restaurant Depot/Jetro, Shoprite, Food Bazaar in the United States and Loblaws, Sobeys, No Frills and Freshco in Canada. We also export to the United Kingdom, Cayman and Barbados," Bailey said.
Spur Tree currently makes 84 per cent of its revenue from export sales, which grew by 171 per cent in 2014. Growth this year continues to be strong with exports increasing by 95 per cent between January and April.
Meanwhile, Exotic supplies ackee, callaloo and its own jerk seasoning to markets in the US, United Kingdom and Canada.
The two companies first entered a strategic partnership two years ago, with Exotic producing and packaging a number of Spur Tree products. Exotic also produces and packages for a number of other local and overseas entities under its labels for export to the USA, UK and Canada, including Grace, Bedessee Imports, Carita Jamaica Ltd, Jetco, San Caribbean and Vineyards Food Products. That packaging arrangement will continue.
Meanwhile, employment is expected to increase at both company locations as a result of the joint venture.
Spur Tree currently employs some 35 people, but expects to increase that by another 25 in the next year, Bailey said. "However, the larger employment opportunities will be realised at Danvers Pen, St Thomas where Exotic's factory is located. Over 80 workers who are now employed on a seasonal basis will be offered full employment as new product lines are introduced," Bailey said.
The joint venture also intends to work on backward integration, utilising lands owned by Exotic to grow crops such as pepper to meet the needs of the factory. The company has some 150 acres of land which are now to be farmed.
The agreement was signed at Knutsford Court Hotel in New Kingston, and was supported by Brian Pengelly, president of the Jamaica Manufacturers' Association; Butch Hendrickson, chairman and CEO of National Baking Company; and Howard Mitchell, a director of competitor Walker's Wood, who was representing minister of finance Dr Peter Phillips.
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