Diversification propels JP Group’s recovery
June 23, 2022
Jamaica Producers (JP) Group Limited’s pursuit of geographic and product diversification has paved the way for the conglomerate’s recovery from the economic shock of the novel coronavirus pandemic, evidenced by a strong financial performance in 2021.
“The 2021 performances of Jamaica Producers Group was strong. JP’s overall financial results reflected recovery from the challenges associated with the COVID-19 pandemic. Importantly, the results also demonstrate that the group has emerged from the crisis with an even stronger and more resilient multinational business portfolio,” Group Chairman Charles Johnson stated during the group’s in-person annual general meeting at the Terra Nova All-Suite Hotel in Kingston last Thursday, June 17, 2022.
The group, which has two primary business segments — logistics and infrastructure (L&I) and food and drink (F&D) — improved its profitability in 2021 by 50 per cent after acquiring two new businesses within its F&D portfolio.
On September 1, 2021, JP completed the purchase of a 50 per cent in stake in Spanish juice manufacturer CoBeverage Labs LS and on October 16, 2021, it concluded an investment in the Dominican Republic-based Grupo Alaska SA through its joint venture holding company Grupo Frontera Limited.
With the latter, JP is exploring how to make inroads in the Spanish-speaking Caribbean markets.
In April 2021, the group also acquired Geest Line — a shipping line that has operated services linking the Caribbean and Europe for over 60 years — along with its joint venture partner, Sealines Holdings NV, a member of the Seatrade group of companies. The company generates around US$12 billion in revenue.
“The Geest Line operates five reefer vessels and those refrigerated vessels carry about 9,000 pallets and about 100 containers as well, and they commence their journey at Flushing in the Netherlands, go to Portsmouth, bring in consumer goods, vehicles, project cargo, heavy equipment, you name it and then head on down to the Eastern Caribbean — Barbados, St Lucia, St Vincent, Grenada, Dominica, etc, — and discharge those cargo. And then they go on to Colombia and get fresh fruits and then to the Dominican Republic to get more fresh fruits,” Group CEO Jeffrey Hall shared.
Currently, JP makes 52 per cent of revenues in the Americas and 48 per cent in Europe. In terms of portfolios, the conglomerate’s F&D portfolio accounts for 59 per cent of revenues while L&I brings in the remaining 41 per cent.
Notwithstanding the group’s acquisition in other jurisdictions, the CEO clarified that, “JP is proudly Jamaican, but we are global in our outlook. This is a perspective that is steeped in our history but is never more relevant than today.”
Locally, JP’s farming business is the largest private employer in St Mary, Jamaica. Hall shared at the AGM plans to further develop the group’s land holdings in parish.
“We also recently announced a commitment to development in and around the JP estate in St Mary. JP owns over 3,500 acres of land in St Mary and this project will initially focus on farming and reforestation as well as community support and engagement. In 2023, the project will include select planned low density residential and commercial real estate development.”
JP’s pursuit of product and geographical diversification is premised on acquisition and innovation. In this regard, Hall noted that “by innovation we mean, figuring out how to get into new markets and new products.”
The group’s pursuit of acquisitions continued into 2022 with the purchase of Miami Freight.
“So we acquired Miami Freight in January of this year and Miami Freight does that business from the US, into the Caribbean, into Jamaica, and we believe it’s a growing market, in part, because of e-commerce,” Hall noted.
“We believe that people are going to look online, and not just identify light, small packages but ask themselves, how they can buy a dining table, or how they can buy planting equipment and how can they get it here efficiently and reliably. And that’s a business we think we understand, because we have been doing it in the UK for generations, through JP Shipping. And so during the year, not only did we pursue our acquisition strategy, but we pursued our innovation strategy with JP Shipping, looking at the environment in the UK, expanding its warehousing capabilities, expanding its software and system capabilities so that we can redeploy them elsewhere and of course expanding its trucking capabilities to deal with the well-known shortage of trucking capabilities in that jurisdiction,” he continued.
So far this year, revenues in the first quarter grew by 26 per cent to $6.9 million while net profit jumped 42 per cent year on year to $811 million.
JP has also achieved staff diversification with a complement of over 2,000 employees, half of whom are in Jamaica.
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