JP Tropical Foods, the trading name for Trinjam Food Processors, has repackaged its snacks for a bolder look. Far left is a sample of the old package, at left the new look.

Jamaica Producers Group, still in the throes of a major overhaul of its operations, says it intends to more than triple revenue from its JP Tropical Foods business over the next six years, transforming it into a US$50 million (J$4.5 billion) a year enterprise.

"By 2015 the snack and fresh produce business is expected to increase to a US$50 million business" said Rolf Simmonds, the division's commercial director.

Snacks and fresh foods now have a turnover of around US$15 million (J$1.3 billion) or more than one-third of group income.

If Simmonds' revenue projection is met, it would mean that, in Jamaica dollar terms, JP would gross 50 per cent more from the manufacture and marketing of products such as banana, plantain, cassava, sweet potato and breadfruit chips than revenue from its entire operation in 2008 when its largest money spinner was placed in receivership.

$3.65b turnover

In 2007, JP was a $13 billion company by revenue; last year its turnover was $3.65 billion.

The marketing of fresh produce, including green and ripe bananas, also falls under this division and accounts for 25 per cent of its revenue.

Last year, the company reported a loss of $2.85 billion, the result primarily of a soft market and high prices for material and the cost of restructuring its UK subsidiaries, including a $1.6 billion impairment from placing the Serious Food Group into administration.

JP, saying it had enough of its plantations being destroyed by hurricanes, also ended the export of bananas from Jamaica. It has been transforming its farms in the east of the island to mixed crop operations, growing fruits for its products.

"The immediate thing for us is to ... backward link the raw material for our snacks," said JP's CEO, Jeffrey Hall, speaking with the Financial Gleaner last Friday at the company's AGM.

The group, Hall said, has already spent $100 million on the reconfiguration of its plantations, even as it develops supply agreements with contract farmers to cover shortfalls in its own production.

Although the group's restructuring is not yet complete, the focus on tropical snacks and the milk and smoothies operation it purchased in Holland last year, appear to be paying off.

During this year's first quarter, JP returned a profit of $45 million, reversing more $312.7 million for the corresponding period in 2008.

And Simmonds is confident thathis division is on course for a pivotal role in in the group's continued recovery.

"We are well positioned for aggressive growth of 30 per cent per year," he said. "We are looking to get there primarily through distribution initiatives and expansion in our product range."

"Capital projects may be developed to support these initiatives, but we are currently very prepared to meet our targets," Simmonds.

Part of the plan, he said, would be to spend around five per cent of the division's revenue annually on marketing and promotion of its products, which, on current sales, would give the marketers a budget of around $70 million to drum-up consumer desire for JP's snacks.

Last year the group spent $90.8 million on marketing, selling and distribution.

As part of this aggressive thrust into the snack business, Simmonds expects this year to lift exports to 20 per cent of overall sales, from eight per cent at present.

And it has just launched a new package for its St Mary's Banana Chips, which will almost double the product's shelf life to six months from the previous three-and-half months.

This should help to enhance the company's ability to export, particularly to markets that require long transit time by ship.

JP spent $7 million on the repackage alone, plus another $6 million on research and development design.

Line extension

The next step, according to Simmonds, is line extension, with new flavours from its banana and cassava chips. Cheese-flavoured chips could come before year end and by August JP expects to launch a plantain chip.

The group is also planning to bring out a breadfruit chip, which, at least initially, would be a seasonal product, and is currently testing a dasheen chip.

Already JP, whose Jamaican manufacturing plant has a capacity of 1.6 million packs of snacks weekly, exports its chips to North America, Britain, the Cayman Islands, Antigua and the US Virgin Islands and The Dominican Republic. But the group expects to expand in these markets as well as add others.

"Jamaica has one of the highest consumption of banana chips in the world, and we want to share our special St Mary's recipe with the rest of the world," said Simmonds.

sabrina.gordon@gleanerjm.com