Jamaica Teas to embark on multimillion-dollar factory expansion
Big jump in overall sales last month led by exports up 85%
JAMAICA Teas Group will be embarking on a multimillion-dollar plant expansion at its Bell Road, Kingston 11 headquarters, the details of which will be known in the coming months.
According to the company, a leading manufacturer of local teas and other foods, and which also processes and distributes imported teas, the expansion is to meet growing demand for its products, both in the local and overseas markets, and is also being executed to prepare the company for continued growth.
No more details of the plant expansion were disclosed by directors in the company’s fourth quarter unaudited results for September 2020 released on the weekend. However, the directors trumpeted the overall 47 per cent increase in sales last month, with export sales leading the way, jumping by 85 per cent and a 10 per cent increase in domestic sales.
Chairman John Jackson and Chief Executive Officer
John Mahfood are painting a positive outlook for the upcoming quarter.
“We have good orders in hand for November, and these developments, along with booking of more real estate sales and hopefully improvement in the investment portfolio, should result in a good first quarter for the financial year 2021,” the told shareholders,
They singled out the manufacturing division, which returned the best results for the quarter.
The directors noted that the highlight of the quarter was the strong gain in export sales, which rose 65 per cent over the prior year.
“This was acceleration in the growth rate seen up to our third quarter. Exports accounted for 65 per cent of total sales in the quarter, meeting one of the objectives set at the time the company went public in 2010,” Jackson and Mahfood told shareholders.
Early indications and feedback from overseas customers point to a continuation of the positive trend in exports in 2021. Although exports were dominant, Jamaica Teas stated that domestic sales did well against the background of a slow growing economy that suffered a sharp fall in the second half of the company’s fiscal year.
With strong and continued focus on the domestic market, local manufacturing sales increased 17 per cent compared with the previous year. Overall, sales climbed 44 per cent to $407 million in the final quarter of the year.
Whilst enjoying increasing sales and profit, marking an outstanding 2020 fiscal year, Jamaica Teas said that its investment division did not do so well. However, the directors are positive the group will benefit from plans and strategies implemented earlier this year.
Although the investment division, operated through QWI Investments, returned the poorest performance within the Jamaica Teas Group, the company showed vast improvement during the fourth quarter in September 2020. This is due mainly to the fact that prices on the Jamaica and New York stock exchanges continued to show improvement over the depressed prices in the March quarter.
This resulted in investment gains for QWI Investments of $31 million. The board expects that this trend will continue into the new financial year.
Regarding the real estate division, 2020 was a successful year in which the division completed the development of its Violet’s View Manor — studio units in the upscale Manor Park area of St Andrew and signed agreements for the sale of 17 of the 18 units. The proceeds and profits from 12 of these units are included in the fourth quarter results with the balance to be reflected in the 2021 financial year.
The retail division recorded revenues of $129 million for the fourth quarter and $538 million for the year to date. The directors say this division remains profitable and a critical asset of the group.