CEO of Jamaica Broilers Group Christopher Levy said Guyana could play an outsized role in supplying animal feed to the region if its agricultural sector starts focusing on growing the raw materials necessary to process for feeding animals.
Levy made the comments on the recent Mayberry Investments Investor Forum.
"When you look at the land mass that's in, like, Guyana, for example, Guyana could produce enough grain for the poultry industry in this region. Belize, again, could produce grain. Jamaica doesn't have the land to do it. If we took all of the cane lands and produced corn at the best yields seen in the United States, it would represent three months of corn supply to Jamaica Broilers," Levy said in response to a question from Mayberry Investment Executive Chairman Chris Berry.
Levy added that he's had meetings with government officials in Guyana about the matter, telling them that's the role the country can play in Caricom.
That aside, Levy said his company is seeking to boost exports to the region.
"We're seeing a lot of growth opportunity in our Jamaica business around exports and further processing, and that's quite encouraging because you're spreading out that product line and that brand," Levy said. Jamaica Broilers operates both in Jamaica and the United States. A hatchery which it operated in Haiti was closed last year due to the impact of the political turmoil in that country on its production.
As for exports from Jamaica, Levy continued: "We actually sell all of those local producers, whether it's in Barbados or Trinidad or Guyana, we actually are selling them the fertile eggs. We're selling them a lot of the feed ingredients, the chicken houses, the technology and that's all happening out of our US operation. What we're seeing though is that there is a tremendous demand for our further processed products such as our wings or nuggets, our tenders, those sorts of things. And we probably are exporting roughly about four to five containers a week of that product around the Caribbean, which is pretty good, to be quite frank."
He said Cayman is also a big market for the company.
"In the context of things, it's great for Best Dressed Chicken Jamaica and it will be significant to them and creating opportunities there. But as the overall needle mover, it's one of the things we have to think bigger as an organisation about."
Levy said there are, however, no plans to expand the brand into the region at the moment by setting up another operation in any country.
"I think right now our plate is quite full with our investments and opportunities in the United States and Jamaica. I think the opportunities that we're seeing in both countries are significant enough to keep us focused," he shared.
Jamaica Broilers has experienced more than 30 per cent growth in Jamaica over the last year, but Levy said it has not been enough to bring the company back to pre-COVID levels as yet.
"The challenge in Jamaica is needle-moving investments are hard for where we are as an organisation right now. But when you look at our return on equity running at the end of quarter two at about 14.5 per cent, that's still not back up to pre-COVID levels."
"The cost of grain and the cost of raw materials have doubled and we've had to finance that. So we've literally put more equity into the company in some ways, which has driven the need for us to perform better, because now we have more capital investing," he said.
The more capital he is talking about is the greater investments the company had to make in getting raw materials including feed.
As for the US market, he pointed out it is one which also presents opportunities. The Jamaica Broilers has operations in six US states and sells products in 20 states.
"It's a different make-up than our situation and our culture and that sort of thing. But one thing we've realised up there is that the key to our success is agility. To be able to move into spaces that the larger players take longer to move in. And as the market demand shifts and moves, whether it's moving into a supermarket segment or whether it's moving into a food service segment, the opportunity for us to be flexible and take these quick agile steps allow us to just continually build the brand which is really doing well up there and, um, and broaden on customer base," Levy pointed out.
"There's a lot more consistency in pricing in Jamaica, and whilst the margins in Jamaica at times will be considerably low, at times they'll be higher. So the market ebbs and flows based completely on demand and supply. It's a very pure market in that regard. So we went through a time in the first half of this year where the pricing for products in the US was under a lot of pressure, and the team up there was amazing because of that agility that I mentioned, and the wisdom to enter into various supply contracts that gave us some good price stability.
In the US, Jamaica Broilers is the largest commercial producer of fertile hatching eggs.
"We're producing fertile eggs and selling it to customers around the world. Canada, Latin America, Jamaica, the Caribbean."
The fertile eggs are what hatchlings are grown from and are different from table eggs.
Asked if Jamaica Broilers would get into the table egg market in the US, Levy was adamant. "We don't want to be in that space. It's a different sector altogether. Where we've positioned is that our fertile egg business is the baseline business for Jamaica Broilers, both here and in the United States. But we have been able to move further up the value chain to produce meat, and that's the line that we're taking."
Overall, he said the outlook for Jamaica Broilers is positive.
"First of all, we're very encouraged with the Jamaican economy. We see good fundamentals, we see good tourism, we see good employment, we see a stable dollar, and those things build confidence, and our outlook for our products and opportunities for export out of Jamaica are very encouraging."
"I think the United States, we are just finishing up an expansion. And we do feel very encouraged about that from a product quality standpoint and what I would call the ability to execute to customers because the margin of error for execution in the United States is really zero. Think about it carefully, when you go to the supermarket, you actually don't choose which chicken you see. There might be 10 different brands out there and who chooses what the folks in the supermarket see are people in the meat room, the purchasers, those sorts of folks. And you'll then choose one of the three that they may choose. So you have no margin of error when it comes to being on that shelf. And I think some of the investments that we've made up there have allowed us to execute considerably better, have really driven us deeper into that ability to be agile and move fast and be quick on our feet with our products.
Levy also chided people who continue to call for the opening up of chicken imports.
"Well, I think a country has determined the industries it wants. I think that the leadership and the population make that decision as a nation. Could we import chicken? Absolutely. There's no doubt about that, and folks would love that. However, the poultry industry is the largest agricultural industry in Jamaica.
"It's one that deals with stuff like food security, rural employment. It has some of the greatest technological advancements in the industry right here in Jamaica. The challenge that we face as a nation is that, once we start moving away from local production and the development of agriculture as one leg of our stool, the entire make-up of our economy will change for the worse, and we've seen it in Haiti as a testimony. They had a poultry industry, they had a tremendous agricultural industry exporting mangoes, pears, tomatoes, all of these sorts of things, rice, and that was wiped out. And in five years' time it was done. And now you look at the country that is next-door to us and we need to recognise agriculture plays a very, very significant role in our country.
"That's more than just the price of chicken or the price of lettuce, or the price of pork. It plays a role, that, quite frankly, is probably as critical as any other industry to this nation. Forget the taxes and all of that, but in terms of the role that it plays, the stability that it brings to the country cannot be replaced," Levy stressed.