Following a record year where revenue jumped 25 per cent to $48.71 billion across its manufacturing and distribution segments, Wisynco Group Limited is moving expeditiously to complete its $5-billion expansion to satisfy demand in the local markets.

Wisynco spent $2.37 billion in capital expenditure for its 2023 financial year (FY), with $1.43 billion related to work in progress for a 200,000 square feet (sq ft) factory at Lakespen and White Marl, St Catherine, and another 200,000 sq ft for additional warehouse and factory space for new production. There is another $1.64 billion in deposits on fixed assets to be received in the coming months as well. So far, the company has completed the expansion of its liquefied natural gas (LNG) power-generating plant and is well advanced on its enterprise resource planning (ERP) system.

“Some of the capacity will be installed before the end of this calendar year. In the next few months, we have two new [beverage] lines which will be installed and then about Q3, we’ll have another [beverage] line installed, and then by the end of the financial year, the new factory and warehouse will be operational. The full 100 per cent benefit of all this expansion won’t be seen until 2025 financial year,” said Wisynco Chairman William Mahfood in a call with the Jamaica Observer on Thursday.

The expanded capacity should translate to an extra 40 per cent in manufacturing output and give it the ability to sufficiently meet demand both at home and abroad. Wisynco manufactures brands like Wata, Cran Wata, Bigga and Boom, which the executive noted have seen annualised growth over the last two years of 30 per cent and above. The new factory and overall expansion will allow for new packaging formats, categories and products such as indigenous flavours unique to Jamaica like sorrel.

While Mahfood noted the substantial rebound in tourism and record demand across different segments of the economy contribution to the results, he noted that the expansion will be critical to meet any gaps that exist in its domestic and international markets.

“The [new] factory is actually going up now and construction is quite advanced. All of these new measures which are being put in place are very positive for the future. As you can see, we’re still growing and doing everything possible to try and squeeze out whatever production we can out of the current facilities. I know it’s causing some challenges for our customers; I get the calls every day. Demand is still very, very strong,” Mahfood emphasised as he reiterated the move to meet demand.

Despite the growth in its direct costs, Wisynco still managed to improve its gross profit to $16.86 billion with the gross profit margin moving to 34.61 per cent. Even with expenses rising 28 per cent to $10.95 billion, Wisynco’s operating profit jumped 26 per cent to $6.16 billion. However, a $105.37 million impairment provision and $52.10 million share of loss on its associate JP Snacks Caribbean Limited resulted in profit before tax coming in at $6.31 billion. After accounting for a higher tax bill, Wisynco’s net profit grew 21 per cent to $4.92 billion with earnings per share of $1.31. Its fourth quarter net profit improved 15 per cent to $1.30 billion.

While most of the revenue growth came from Jamaica from $37.30 billion to $46.85 billion, Wisynco’s export sales only grew six per cent from $1.07 billion to $1.14 billion as it focused on satisfying the local market.

“With the expansion in production locally in the next six months, we will have the ability to support those export demands in the midterm. So, I don’t see the need for us to be in production in the US in the next year or two. The expectation is we’ll grow the export business significantly as well as the local market growth that will continue. At that point, we will have no choice but probably either look to more production here or put some of that production overseas,” the chairman explained on the export plans.

Wisynco’s substantial performance saw its war chest of cash surpass $10.13 billion for the 2023 FY. This is against the backdrop of $4.32 billion in operational cash flow, $3.54 billion in capex and investments and $1.69 billion of dividend payments. While some of this cash is related to the $3.19-billion loan it received at a 6.0 per cent interest rate for the expansion, the company’s cash pile has continued to climb higher year after year.

When the Caribbean Business Report asked Mahfood about acquisition opportunities, he replied, “We are looking and are constantly looking at acquisition opportunities. That doesn’t stop. The team is actively looking for any opportunities. We just haven’t found the right one yet, but we’ll find them. A lot of good opportunities out there.”

Mahfood has referenced that the substantial cash balance gives it the ability to consider acquisition opportunities faster than other competitors. Wisynco’s asset base grew 25 per cent to $32.39 billion with its shareholders equity rising 18 per cent to $21.13 billion.

While Mahfood wouldn’t confirm the specifics of the potential distribution arrangements, he did mention that they were in active discussions and that the distribution portfolio is seeing substantial improvements. This includes the Worthy Park, Trade Winds Citrus and JP St Mary’s products.

“It [Trelawny warehouse] improved significantly, the volumes there are growing continuously, and they’ve really made a big impact in the west. We are actually so happy and pleased with what’s happening down there that we’re looking for additional locations on the south coast,” Mahfood explained on the expanded distribution opportunities following the March 2022 opening of its Hague, Trelawny, facility.

Wisynco’s stock price improved two per cent on Wednesday to $17.24 before dropping four per cent to $16.53 on Thursday, which left it down seven per cent year to date with a market capitalisation of $62.17 billion.

“I’m very excited and I think it’s all positive. From a macro standpoint, I think we need to see a reduction in interest rates to stimulate investment. On a national level, we need to put in more development and training capacity for young people to prepare them for the workforce. I think it’s positive from the point of view that we have increased employment, the highest level in the country’s history and that augers well for people in manufacturing and agriculture. We need to develop young people to fill those jobs,” Mahfood closed on his outlook for the 2024 FY and thoughts for Jamaica’s future.