May 21, 2021

Jamaica Broilers mulls strategy to cushion price increases

AS the price of chicken and other commodities continue to increase amid global supply and logistic challenges occasioned by the novel coronavirus pandemic, Jamaica Broiler Group Limited (JBG) said it is considering strategies to absorb some of the cost currently being passed to consumers.

Speaking at this week’s Mayberry Investor Forum, Christopher Levy, president and CEO of JBG, said that as the issue of price increases remains a big concern for consumers due to significant run-ups in main feed inputs such as corn and soy, the company was looking at ways to best address growing anxiety from customers. Though at the preliminary stage, he said that discussions are being held to come up with viable solutions.

“I think that there is a very broad challenge facing the world in terms of availability of not only just raw materials, but also logistical capacity to get things done. Right now in terms of the cost of chicken, it’s moving up aggressively but as this year rolls down we’re hoping to see a peaking, a softening in the market. We have not yet figured out a solution to the corn problem just yet but we are working on it,” he said.

The company, which has benefited from the increases along with efficient cost containment fixes, rebounded from the initial fallout of the pandemic, growing net profits by 64 per cent to total $1.8 billion and revenues by two per cent to $41.3 billion at the end of its nine-month period ended in January. Shareholders’ equity during the period also grew to $18.1 billion, with earnings per share of $1.50 and total assets valued at $47 billion.

Eyeing a positive recovery of tourism and an influx of tourists to the island, Levy in his outlook said that he was hopeful for more good results from the company this year.

As to the other two regions in which the group operates, Levy said the company was more intent on going after other acquisitions in the lucrative US market from which it already secured some 38 per cent of its sales. JBG currently operates a poultry processing plant in South Carolina along with a feed mill located in Georgia, which was acquired last year.

“Growth in the US will be needle moving growth for us as opposed to Jamaica which is more focused on cash flow growth, therefore, opportunities [there] will have to be very strategic,” he said.

As for its Haiti operation which recorded a segment loss of $23.3 million during the nine-month period, the president and CEO said that the social and political unrest in that country continues to affect growth as well as the level of investment which could be made in the business. He further noted that the company’s decision to increase shareholdings in that business segment largely stemmed from an existing agreement made with shareholders.

“Haiti is in a very difficult spot right now and as such, I don’t see it as a major needle-mover for us [currently], so it’s more about a containment than expansion strategy there at the moment,” Levy said.

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