Fear of cheap imports causes egg factory delay.
Crafton Holdings in fear of imports
NEARLY TWO years after serious market inroads for his egg-processing business, Damion Crawford’s Crafton Holdings is in wait-and-see mode, based on the perceived threat of subsidised American poultry imports.
Crawford says his egg production company was about to pull the trigger on kitting out a new factory, but now he’s holding back.
“We were planning another $25 million worth of investments but we stopped at just the machines, and we’re waiting to put in the second factory to see where we’re heading with these overtures from the USA,” Crawford told the Financial Gleaner.
Crawford wants to expand into areas such as egg powder and processed eggs. The main investment, he says, would be new machinery. This would give Crafton Holdings more revenue streams by virtue of offering more than just liquid eggs.
But American interests with full-page ads have been trying to soften up a resistant Jamaican market to US poultry and poultry products, including eggs. Poultry imports face punitive duties ranging between 240 per cent and 260 per cent, but industry experts cite the possibility of a workaround using indirect entry through a CARICOM A member state or by US interests invoking free trade arrangements.
Crawford says he is in no position to issue a warning to the foreign rivals, but points to the potential threat to local business. He is just the latest local investor in the poultry sector to note the encroachment of the Americans and to warn of the potential market upheaval and potential harm to local operators.
“We saw what happened to milk when they were allowed to dump into our market; same thing with beef. It they should make the mistake of allowing those [poultry] products to come in, then some of us will have to review
our options,” he said, adding that it was hard to compete with subsidised imports.
“Remember that America subsidises their feed. That can potentially mean them producing eggs at 60 per cent of what I can produce it for with non-subsidised feed, plus a markup for the feed importer,” Crawford explained.
Crafton Holdings invested in the liquid eggs market after Caribbean Producers Jamaica pulled out of its joint venture partnership with Jamaica Egg Producers Association. CPJ, the operating partner, wanted out after racking up heavy losses at the Montego Bay-based plant.
Crawford acquired the machines, set up shop in Kingston, and has moved production from 27 cases per week in December 2016 to 300-340 cases per week in normal production — that is, the tourism off-season — and to 440 cases in the high season.
He told the Financial Gleaner that the company’s growth was not without challenges since his move to supply the hotel sector means displacing established