Jamaica Broilers Group (JBG) has acquired Crystal Farms Mills in Georgia, USA, through its subsidiary Wincorp Properties, Inc, a move that it expects will add $65 million to its revenue.
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Though remaining tight-lipped on the cost of the acquisition, Ian Parsard, group senior vice-president, finance and corporate planning, told the Jamaica Observer the “acquisition is similar in size and importance to the other acquisitions”, and that discussions to purchase the mill began approximately three months ago,Jamaica Obesrvers reports.
“This is a good time given that JBG US operations currently include breeder operations, which produce fertile hatching eggs, as well as hatchery operations in Iowa and Pennsylvania. The feed mill represents an important strategic acquisition by the US operations,” he stated in an e-mailed response.
The acquisition of the Crystal Farms Mill forms part of the group's growth strategy to further expand and vertically integrate its operations in the United States, and according to JBG President, US Operations Stephen Levy, “The acquisition allows our US operations to have greater control over its feed supplies.”
In addition to the mill, JBG will also take over ownership of the company's land and fleet.
JBG's US operations include breeder hatcheries in Arkansas and Georgia — both trading under the International Poultry Breeders brand — as well as in Iowa and Pennsylvania, acquired in March 2016 and October 2017.
Both Parsard and Levy believe the location of the mill will work to the advantage of the group's Georgia operation in terms of logistics. For one, the mill will supply feed to JBG's breeder operations in North and South Georgia.
Secondly, the mill is located near the Norfolk Southern Railroad, which “makes for efficient delivery of grains (raw materials) such as corn and soya bean meal to the mill.
“It is a Class 1 railroad operating 21,500 miles in 22 eastern states of the USA. The efficiency of incoming grain logistics is helpful in cost control,” Parsard told Caribbean Business Report.
As such he anticipates that the acquisition will contribute an approximate 15 per cent increase, or $65 million, to the group's revenue.
For financial year 2017/2018 revenues at JBG increased to $48.3 billion, from $44.4 billion, an increase of nine per cent over the year prior. Net profit decreased by 11 per cent to $2.0 billion.
With a staff complement of 30 people, Crystal Farms will not see any significant changes in staffing, including at the management level. Rather, Parsard pointed out, JBG is focused on “a smooth transition in the operations and then to integrate this latest acquisition into [our] culture and way of doing business”. ■