Being a homegrown business, Jamaica Producers Group finds its best bet is investing in what could become a key global transshipment port. Unlike most countries in the Caribbean, Jamaica is a known producer of a cornucopia of perishable and food products. Companies like GraceKennedy Ltd., Jamaica Producers Group Ltd, and Gruppo Campari have done well there shipping their products all over the world. Gruppo Campari has grown its collection of spirits to be among the world’s premium brands. Its Appleton Estate Rum, for example, is crafted and produced only in Jamaica and is distributed primarily in North America, but increasingly to Italy, Germany, Japan, Austria, France and Chile. GraceKennedy Ltd. and Jamaica Producers Group are homegrown multi-national companies that now produce global brands. GraceKennedy Ltd. is one of the Caribbean’s largest conglomerates. Speaking at the Jamaica Investment Forum held in Montego Bay in March, CEOs of GraceKenney and Jamaica Producers discussed their challenges and successes of manufacturing and shipping their product from Jamaica. Tough Survivor In particular, CEO Jeffrey Hall of Jamaica Producers Group (JP) revealed the bold steps his firm took after two back-to-back hurricanes nearly destroyed the business in 2004 while, simultaneously, the trade regime that supported the banana industry and gave Jamaica producers access to the European markets collapsed. At the time, JP’s core business was exporting bananas to the United Kingdom. “The hurricanes not only wiped out crops, but created logistical challenges in the food chain,” Hall says. “Half of the cost with exporting bananas to the UK is freight.” Further, the industry was hit with a price war among UK supermarkets due to an excess of bananas on the market, plus the world economy was heading towards the recession of 2008. “The core business of Jamaica Producers was on fire,” Hall says. Consequently, JP executives decided to diversify the business and while also addressing issues concerning the high cost of freight. “Those costs encompassed half the cost of the banana trade in the UK,” Hall remarks. Jamaica Producers Group had already purchased RAM Shipping, a freight forwarding business that operated between the UK and the Caribbean, in 2006, and was operating its JP Shipping Service. That same year, the company also sold its shares in its UK subsidiary, JP Fruit Distributors Ltd., to joint venture partner Dole. In 2008, the company found the food business to be “painful.” “We needed to redefine ourselves in the specialty food space,” Hall recalls. Consequently, Jamaica Producers Group purchased Hoogesteger Fresh Specialist B.V., Holland’s leading fresh juice and smoothie manufacturer. For Jamaica, the acquisitions meant larger scale farming. But to meet European demand, the company also found that it had to become innovative. “We introduced a technology to expand the shelf life of fresh juice,” Hall says. That process, which is undertaken in Holland, involves cold pressing juice. “We were the first company in the world to introduce the technology,” Hall adds. Consequently, its business – United Fruit Co., is now the No. 1 producer of fresh juice in North Europe. In addition, JP acquired specialty foods companies that include Tortuga (rum cake manufactured in the Cayman Islands and distributed worldwide via Miami) and Jablum – Jamaican-made Blue Mountain coffee. Focus on Logistics A major factor in the business is logistics. With JP Shipping Service and RAM Shipping, the company no longer had to worry about filling ships going north and coming south. “This is held together by our less than container load (LCL) business across the Eastern Caribbean,” Hall says. Caribbean nations are highly dependent on products coming south to supply the hospitability industry and general populous. Among the products JP Shipping Services handles are: excavators and plant machinery, project cargo and heavy lifts, boats and caravans, cars and motor vehicles, personal effects, motor vehicle spares, food products, and manufactured and commercial goods. To expand its business, JP recently acquired a 42 percent stake in Kingston Whaves Ltd, which the company sees as positioning Jamaica as an important logistical hub for global shipping – particularly given Jamaica’s Logistics Hub Initiative that the Jamaica government is promoting to capitalize on the trade and business opportunities that will emanate from the expansion of the Panama Canal in 2015-2016. “We believe the potential for business is here in Jamaica,” Hall says. Not only does Hall see Jamaica’s port as competing with the rest of the world on a multinational level, thereby bringing business to Jamaica, he sees Kingston Whaves Ltd as especially benefiting his company. “When we looked at Kingston’s position for handling feeder vessels emanating from the mother ships coming into Jamaica, we felt that activities behind the port in logistic services would be an opportunity for us as well as the multipurpose activities we do, Hall remarks. These activities include the shipment of bulk, break bulk, and automobiles, as well as adding value to containerized freight and/or repackaging shipments. “This is a low capital, high value activity,” he says. “The idea is to have the flexibility to do all of these,” he says. The goal for Kingston Wharves (KW) is to cement its position as the Caribbean’s best multi-purpose port and become a global gateway and leading logistics provider. “Our intention to do two types of things: create warehousing logistics space to allow for this value added process and for this LCL load service process to take place,” Hall says. “We are also going to spend capital on the port to increase traffic volume.” The best news, he adds, is that KW has been given free zone status by the government so that goods coming to the wider port area can receive value added services such as product assembly and labeling, and order picking and packing, without additional tax and tariff charges. “Our designation as a free zone allows us promoter status, which means we can host other company’s activities within the walls of our area,” Hall adds. This includes order fulfillment, postponement services, customized freight transportation and distribution services, warehousing and returns, and inventory management. The logistics complex, which is slated as a 160,000 square foot warehouse, also proposes to transition to a Special Economic Zone. It will be a one-stop shop operating 24 hours daily; 7 days a week. While JP ships most of its products all over the world, Hall points out that today the bulk of its business is regional services. “When we ship out of Kingston, we do full and LCL loads,” he explains. “We consolidate and reconsolidate. We send LCL cargo here, which goes to our warehouse and is redistributed.” Going Forward So what impact does Hall see the Panama Canal having on Jamaica going forward? “We think it will bring volume to the Port of Kingston and will be good for Jamaican businesses,” he tells AJOT. “Key, however, is adding value in the logistics chain.” Regarding the impact US efforts to open relations with Cuba might have on Jamaica, Hall suggest this development creates opportunities for the time being. “While the rules are uncertain, Jamaica can be a place where value is added so transshipment can take place,” he says. “The Port of Kingston focuses on being a multipurpose port and it will remain a multipurpose port, meaning you have a mix of transshipment and domestic cargo, containerized and break bulk cargoes as well as rolling stock. Traffic flows are a function of different economies and cargoes.” He emphasizes that JP’s business weathered two hurricanes, trade challenges and the economic recession of 2008 because it was diverse. He sees the same for Jamaica and its Port of Kingston. “The fact that two of KW’s shareholders are also carriers also brings stability to the business,” he adds.