THE Jamaica Producers Group has set its sights on substantial growth in its juice business in Europe, having now upgraded the production facilities to be more efficient in the face of inflationary pressures caused by the war in the Ukraine.

Jeffrey Hall — who has transitioned from being the managing director of Jamaica Producers Group to the CEO of the Pan Jamaica Group in the aftermath of the amalgamation of Jamaica Producers Group and PanJam Investments earlier this year — told the Jamaica Observer that its JP Juice Group subsidiary has identified significant opportunities to profitably grow its trading relationships with major European retailers and food service enterprises.

“We have doubled the size of the juice business over the last five years and see the potential to again double it over the next five years while broadening the range of products that we supply,” Hall highlighted in a telephone interview with the Business Observer on Tuesday as he expounded on the opportunities the company is targeting.

The doubling in the size of its juice business was attained with the March acquisition of a 100 per cent stake in Belgium-based Juicy Group NV and HPP Belgium NV.

“This juice plant has significant expansion capacity and will allow us to grow our strategic relationships with large-scale retailers and food service establishments for fresh juices in northern Europe,” Hall continued. He said the company intends “to stay in this category, which is a high growth premium category in Europe”.

In addition to the Belgium business the Jamaica Producers Group owns A.L. Hoogesteger Fresh Specialist B.V. in the Netherlands and is the major shareholder of Co Beverage Lab S.L. in Barcelona, Spain. The businesses produce freshly squeezed, short shelf life juices and smoothies and serve as co-packers of juice for major supermarket and food service entities in the Netherlands, Belgium, Scandinavia, Switzerland and Italy. All operate under the JP Juice Group that itself is part of the company’s Food and Drink Division, which is the largest contributor to revenues of two operating segments for the Jamaica Producers Group. The other operating segment is the company’s Logistics and Infrastructure Division.

In the first quarter of the current financial year which ended on March 31, the Jamaica Producers Group said its Food and Drink Division’s sales touched $4.2 billion, which was up 2 per cent from the prior year. Profit before finance cost and taxation for the division was $31 million, a reduction relative to the prior year.

The company said revenue growth in its Food and Drink Division was weighed down by the less-than-stellar performance of its Caribbean Food Group, which it labels that division’s “less significant part”. It comprises food production and distribution entities in the Americas.

“Although we experienced revenue and margin growth in a few products and markets, the Caribbean Food Group had a challenging quarter,” the Jamaica Producers said in notes accompanying the release of its financials for the first quarter of the the 2023 financial year.

“This was in part due to seasonally affected commodity prices and sales volumes. We have established turnaround and revenue growth plans for the most challenging parts of the business and expect to see the benefits of these before the end of the year,” it continued.

“We expect to see improved commodity prices during the course of the year,” Hall said when asked to provide further details about what will lead to a turnaround of its Caribbean Food Group subsidiary. He said those commodities he is expecting to see lower prices in this year include bananas, plaintains, breadfruit, cassava and cooking oil — which are used to make its ready-to-eat snacks.

“We are also expecting to see growth in the Latin market. We operate in the Dominican Republic as well as Central America and we expect growth in that market in the snacks business.”

Hall said he expects to see the Caribbean Food Group boosting its sales by at least 15 per cent this year. The company’s products sell in Caricom countries, Panama, the Dominican Republic, Colombia and Curacao. Under its Caribbean Food Group, Jamaica Producers operates several brands including St Mary’s and Snacks Caribbean for ready-to-eat snacks, Tortuga for baked products, and an ice and water company named Grupo Alaska in the Dominican Republic. Its snacks line is produced in the Dominican Republic, where a third of its 2,000 employees are stationed, while the baked goods are produced in Jamaica where close to half of its employees work. The company, which has a history in Jamaica’s banana industry, said the fruit now only contributes three per cent of total revenues.

“We expect some growth in that business but [do] not expect it to be a major part of the enterprise in the next few years.”

Turning to the company’s other operating segment, its logistics and infrastructure business which includes Kingston Wharves, Geest Line, JP Shipping, Miami Freight and Shipping Company, and Capital Infrastructure Group, Hall noted the plans for further growth.

“We believe there is tremendous opportunities in e-commerce and we have rebranded the business to JP Logistics Solutions to begin to clarify for our customers what opportunities we can give to them,” Hall said. Through its logistics solutions subsidiary, Jamaica Producers operates full-service freight consolidation, logistics, and freight forwarding services to support cargo movements between the United States, the United Kingdom, and the Caribbean. The logistics and infrastructure business produced a very strong first-quarter result. It accounts for the major part of the assets of Jamaica Producers and in turn, its profits.

In the first quarter, January to March, the Logistics and Infrastructure Division generated profit before finance cost and taxation of $1.1 billion from revenues of $2.9 billion, an increase of 11 per cent relative to the comparable period in 2022.

“JP’s shipping and logistics business is, in general, delivering attractive returns to shareholders under current economic conditions,” the company said.

During the first quarter of the current financial year Jamaica Producers Group recorded revenues of $7 billion, which is up 2 per cent from the same period a year ago with shareholders’ profit of $439 million up 8 per cent.

The results do not include any sums from PanJam Investments, which Jamaica Producers amalgamated with in April to form the Pan Jamaica Group. Jamaica Producers Group owns 34.5 per cent of Pan Jamaica Group and is the entity’s largest shareholder. The Pan Jamaica Group is an associate company of Jamaica Producers Group. Hall said despite the amalgamation, Jamaica Producers Group will remain listed on the Jamaica Stock Exchange.

Hall affirms, “The completion of our agreement with PanJam has laid the foundation for the formation of the Pan Jamaica Group Limited. We are excited about the enhanced opportunities for diversification, business development, and acquisition-led growth that lie ahead.”

Pan Jamaica Group will hold JP’s existing businesses in food and drink, and logistics and infrastructure, alongside its substantial Jamaican property portfolio and interests in financial services, hotels and other investments.

“Looking forward, the business will form part of the Pan Jamaica Group alongside the PanJam’s Group investments in financial services, and its substantial property portfolio, and other investments,” Hall concluded.